Managing bundled payments: A key component of your value-based strategy

Andrew Schneider headshotCompared to other value-based reimbursement methods, bundled payments for episodic health care are old news. Many payers have been slow to embrace them. However, one major payer that’s looking at bundling to drive down costs is the Centers for Medicare and Medicaid Services (CMS).

In April, CMS launched its Comprehensive Care for Joint Replacement (CJR) model, which requires hospitals, physicians, and post-acute providers in 67 metropolitan areas to bundle payments for hip and joint replacements. Each year, actual provider charges will be compared to target prices. Providers with lower costs will receive an additional payment, while those with higher costs will pay the difference between the target price and the actual charge.

If CJR and other bundled models succeed, providers should expect expansion outside the current metropolitan centers, and for CMS to make them mandatory. Medicare’s focus on driving down costs and shifting financial risk will likely continue to be a fixture in CMS’ cost-control efforts.

Optum experts share how providers can prepare for participation in bundled payments in the Spring/Summer edition of Optum RISKMATTERS. Their recommendations include focusing on:

  • Risk Strategy. Organizations that have an enterprise risk strategy will know when bundled payment participation is best for their organization.
  • Multi-disciplinary governance. Providers need to engage executives from care delivery, IT and data management, financial and risk management, care management and patient engagement to make bundled payment participation successful.
  • Risk assessment/analytics. Data and analytics are basic tools to not only assess overall risk associated with participation in bundled payments, but also categorize and benchmark results.
  • Provider engagement. Organizations should identify physician champions who will rally their peers around the benefits of bundled arrangements. Organizations also need a peer-to-peer process in place to engage doctors who need to improve quality or efficiency under bundled payments contracts.
  • Post-acute strategy. Much of the variation in cost occurs after the patients leave the hospital. It is critical to have a strategy in place to discharge patients to the appropriate level of care.
  • Data-driven network analyses. Providers should identify high-performing, post-acute care providers with whom the bundle owners can partner to help manage the episode.

Learn more about how mandatory bundled payment programs will help prepare providers for value-based care in the current edition of RISKMATTERS. Download the magazine here.


About the Author:
Andrew Schneider

Population Health Management Consulting lead, Optum.

Andrew has 16 years of health care management consulting experience, focused on assessing, designing, implementing, and launching Population Health Management, Quality, and Provider Engagement system and business solutions for payers and providers.

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