Bundled Payments: WHAT You Do Today Will Determine HOW You Do Tomorrow

Key takeaways:

• Bundled payment programs are expected to continue in the future and are likely to transition to mandatory tests of change. But participation doesn’t have to be daunting.
• With a commitment to early adoption, scaled learnings, use of data and management of a portfolio of episodes, providers can set themselves up for success across a range of risk-based value arrangements.

For more on this topic:

• Bundled Payment Strategies that Pay Off Big details key strategies to earn more per episode of care.

Since the enactment of the Affordable Care Act (ACA) 12 years ago, attempts to scale value-based payment, innovation and change have been uneven and unpredictable. Despite this, there are some constants and lessons learned across programs that will apply regardless of what the future holds.

Below are four truths that should guide health systems in their considerations around participating in bundled payment programs.

Truth #1: Bundled payment models are evolving and destined to continue.

In recent months, the Centers for Medicare & Medicaid Services (CMS) has commented on the nature of the voluntary versus mandatory models, noting that voluntary models are subject to a “self-selection” bias. At this point, CMS is interested in moving the programs away from self-selection and toward more expansive tests of change to determine the model’s effectiveness at improving care while generating savings. Based on these and other comments, PINC AI™ consultants strongly believe that future bundled payment models will be mandatory. While there are no guarantees, participation in a current model may provide protection from mandatory participation, similar to how participation in the original Bundled Payments for Care Improvement (BPCI) program protected some from participation in the Comprehensive Care for Joint Replacement (CJR) model. That said, it may be worthwhile to consider the next model, since it’s well known that the best financial opportunity exists at the beginning of any program, creating strong incentives to "get-in/stay-in."

Truth #2: Lessons learned in bundles can turbocharge other value-based care efforts.

Some of the lessons learned within bundled payment programs can apply to a range of value-based care models. For instance, bundles’ focus on optimizing settings of care, shortening the hospital length of stay, and preventing readmissions via comprehensive discharge planning and care coordination are effective at reducing costs in a range of programs. Similarly, bundles have been very effective at optimizing post-acute care, ensuring the right patient, is placed in the right setting, at the right time, with preferred partners that offer the most value. Across the board, these savings could also optimize performance in an accountable care organization (ACO) or another value-based arrangement.

Truth #3: Participation provides the best opportunity to learn and change.

PINC AI™ consultants often advise clients to focus more on the “learning journey” versus the “reconciliation destination." Participation is probably the best way to learn the infrastructure, cultural, technical, skillset and other changes needed across the health network to deliver the highest quality of care at the lowest cost. In addition, participation gives unparalleled access to data that’s not available anywhere else. We often recommend using bundled payment data to identify gaps and leakage, where it happens and why to create a strategy to maintain and strengthen your market share. These lessons are invaluable for developing a future-proof network that can compete with new entrants. We often advise clients to think of participation and potential payment adjustments to be a tuition payment for an advanced degree in future success.

Truth #4: Portfolio management.

In the case of BPCI Advanced, Model Year 4 changes involved the introduction of individual Clinical Episode Service Line Groups (CESLGs). As a reminder, each CESLG reorganized individual episodes into CESLGs; each CESLG represents as few as three and as many as eight individual episodes of care. As a result of this change, success was predicated on management of the episodes overall, as a portfolio. By managing the portfolio's overall performance, participants can identify what over-performed, what under-performed and why.

The path to care transformation is a challenging one, and twists and turns should be expected along the way. As providers move through the journey, we often encourage them to resist returning to the familiar way of doing things. Most of all, it’s important to recognize that WHAT you do today will impact HOW you do tomorrow.

Stay the course and you’ll be ready when the next model is released!

The insights you need to stay ahead in healthcare: Subscribe to Premier’s Power Rankings newsletter and get our experts’ original content delivered to your inbox once a month.