Pilot program offers bundled payment models for improving care coordination


A recent New England Journal of Medicine (NEJM) study points to a new pilot program that offers payment models that may encourage hospitals to better coordinate transitions of care, resulting in fewer readmissions.

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In January, the Centers for Medicare & Medicaid Services (CMS) will be rolling out a pilot program offering 100 hospitals bundled Medicare payments for effectively coordinating care across the continuum. The program, called the Bundled Payments for Care Improvement, will link payments for multiple services a patient receives during their episode of care.

“For example, instead of a surgical procedure generating multiple claims from multiple providers, the entire team is compensated with a ‘bundled’ payment that provides incentives to deliver healthcare services more efficiently while maintaining or improving quality of care. Providers will have flexibility to determine which episodes of care and which services would be bundled together,” according to a description published on CMS' website.

According to the NEJM study, the 100 hospitals participating in the pilot will choose between one of four new payment models. “The first model bundles payments for hospital and physician services during a hospitalization. The second model bundles payments for hospitalization and all post-acute care services for up to 180 days after discharge. The third model bundles payments for post-acute care services after hospitalization but doesn't include the hospital stay. The fourth model sets a fixed prospective payment for all services during a hospitalization plus readmissions within 30 days,” according to the study.

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The NEJM study found that Medicare typically spends as much or more in the 90 days after discharge as it spends for an initial hospitalization. “For patients who are admitted for chronic illnesses such as congestive heart failure, post-acute care spending can average twice the cost of the initial hospital stay, and 90-day readmission rates can exceed 40 percent,” according to the study.

Researchers concluded that the CMS pilot initiative has the potential to encourage hospitals to improve their care coordination efforts, therefore decreasing potential readmissions costs in the long run.

“The bundled-payment initiative provides an opportunity for hospitals to gain experience with coordinating care across a continuum of services for discrete clinical conditions. Nonetheless, program managers must be vigilant to ensure that the financial incentives don't cause stinting on care or avoidance of high-risk patients,” according to the study.

In the past, hospitals have not been reimbursed in a way that always promoted a continuum of care. CMS’ pilot program encourages hospitals to take an active role in how patients are cared for following discharge, the NEJM study noted.
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