Do bundled payments encourage more procedures? New study offers answer

New research aims to determine whether a claim that bundled payments may actually increase costs rather than control them holds any weight.

Becker’s Hospital Review and McKnight’s reported on the study from the Centers for Medicare and Medicaid Services and the Altarum Institute.

At issue was whether bundled payments — also known as episode-based payments — encouraged providers to perform more procedures and therefore drove up the cost of care, rather than working to keep it in check. The claim was made in an editorial published last fall in the Journal of the American Medical Association.

The editorial challenged another study that appeared in the same JAMA issue. That initial study found Medicare payments for knee and hip replacements decreased more in hospitals participating in the Bundled Payments for Care Improvements, or BPCI, initiative than others.

The editorial claimed the number of procedures also increased — significantly — at BPCI participating hospitals compared to other hospitals during the years studied.

Healthcare Finance News reports the new study backs up the original study and negates any claim that the BPCI model encourages additional or unnecessary procedures.

The new study says the editorial author did not consider regional factors like number of Medicare beneficiaries.
The new study also found the first hospitals to enter the BPCI program actually reported a decrease in volume of procedures during one year-to-year comparison and overall reported an increase lower than the national average.

Hospitals that joined later did report an increase in volume of procedures, but the increases could not be tied to the BPCI since the hospitals weren’t enrolled in the program during the years studied.

McKnight’s quoted the Alturam study authors who said their research definitely disproved the claim that BPCI programs resulted in more procedures performed.

“In fact, the opposite is true,” they wrote. “The rate of increase in the volume of procedures was significantly lower than in the rest of the country.”

Of course, bundled payments are just one of a number of innovative new payment models being tested. Questions are arising over how different models overlap.

That’s the subject of a #5in5 interview from Optum Provider.

Jeremiah Reuter, managing director for Optum Network in Population Health Consulting, answers five questions in five minutes. He explains the concerns, gives an example of the potential for problems, and outlines proposals to prioritize payments.

Click here to view the episode.

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