Basics of Bundled Payments in Healthcare

Bundled payments represent one form of alternative payment models (APMs) that are designed to move toward value-based care by incentivizing providers to advance coordination and efficiency of care while also improving quality and outcomes at lower costs. Bundled payments, also known as episode payment models (EPMs), require participant providers to assume risk, as they must cover costs that go above the target price for an episode of care including those that arise from complications and hospital readmissions.

Challenges associated with bundled payments

1. Managing Healthcare Costs Beyond The Provider’s Control

The major challenge with bundled payments is managing costs for a patient’s treatment that may be out of the provider’s control, such as medication adherence or other patient behaviors that could lead to adverse events.

2. Leveraging Post-Acute Care Partnerships To Control Costs

With revenue on the line for 90 days or more after a procedure or diagnosis, post-acute care quality and costs may impact bundled payments success. Partnering with low-value post-acute care facilities could jeopardize potential cost savings under the alternative payment model.

3. Providers Succeed In the Bundled Payments Model

One of the keys to success with the bundled payment model is increasing provider communication. Providers must execute efficient care coordination strategies to ensure that patients are being treated optimally at every level of the episode to avoid expensive adverse events.

4. Medicare Bundled Payments 2018: CMS BPCI Advanced

At the end of November last year, the Trump administration canceled hip fracture and cardiac care bundles that were mandatory under the Obama administration. To reduce the burden on rural hospitals, they also significantly decreased the number of geographic locations from 67 to 34 where participation in the Comprehensive Care for Joint Replacement (CJR) payment bundle was required.

5. Bundled Payments: A Permanent Fixture in Health Care

With the promise of the early BPCI bundles, the government’s recently renewed commitment to these APMs, and the collective knowledge gained from early pilots, more and more health care leaders are exploring bundled payments’ potential for reward.

To avoid challenges associated with bundled payments and to boost your practice cash flow connect with our billing manager.

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