Medicare bundled payment project could guide other payers' strategies

Health Affairs policy brief assesses progress of Bundled Payments for Care Improvement initiative
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Through its bundled payments pilot program, the Medicare program is testing models that it hopes will encourage higher-quality, lower-cost care--and ultimately influence how other payers test their own alternative payment models, according to a policy brief from Health Affairs.

The Bundled Payments for Care Improvement (BPCI) initiative is currently testing four distinct models based on episodes of care that involve an inpatient hospital stay. Recently, the Centers for Medicare & Medicaid Services (CMS) announced that it will add 360 more providers to the program.

In the initiative, models 1 and 4 focus on care provided during an inpatient hospital stay, while models 2 and 3 include some postacute care, according to the brief. Model 1 also includes all hospital-admitted Medicare patients, while the other three allow participants--which can be a single provider or group of providers--to include patients with only certain diagnoses out of a list of 48. The four models also differ in their payment structures.

There have been some criticisms of the BPCI initiative, the brief points out, with concerns that it will lead to unintended consequences such as "cherry-picking" lower-cost patients or avoiding or delaying needed care in order to lower costs. Others have questioned whether bundled payments simply allow large provider networks that provide a full spectrum of care to benefit from their previously integrated delivery systems.

Still, the CMS has seen a "healthy interest" in the initiative, and could in the future expand the use of a successful tested model, according to the brief. It has already rolled out a similar bundled payment initiative in its Comprehensive Care for Joint Replacement model, which it hopes will save Medicare as much as $343 million over five years.

In the private sector, meanwhile, insurance giant UnitedHealth is expanding an initiative that bundles chemotherapy payments to reduce cancer treatment costs. But in order to make such arrangements work, providers must be willing to share risk and hire care coordinators while insurers must use their analytics systems to track savings and quality measures, FierceHealthPayer has reported.

To learn more:
- read the policy brief

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