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A “general contractor” for bundled payments

A new type of company takes on gainsharing risk

June 2014

Published in the June 2014 issue of Today’s Hospitalist

WHEN IT COMES to health care reform, accountable care organizations (ACOs) have so far been the big story. But another major initiative underway has been much more under the radar: the Bundled Payments for Care Improvement (BPCI) initiative.

Launched by the Centers for Medicare and Medicaid Services (CMS), that initiative is a three-to-five-year demonstration project involving hundreds of organizations across the country. It may also be a bigger deal for hospitalists than ACOs.

“Hospitalists have largely been left out of the ACO conversation, but bundled payments are very much an inpatient phenomenon,” says veteran hospitalist Win Whitcomb, MD. “Hospitalists will have a lot to do with the success or failure of bundled-payment programs.”

Such programs are very much on Dr. Whitcomb’s mind because, beginning late last year, he became chief medical officer for the Darien, Conn.-based Remedy Partners. The company has a contract with the CMS to design and implement bundled-payment programs with hospitals, physician groups, skilled nursing facilities and home health agencies.

“We’re like a general contractor between these organizations and the CMS to administer everything related to bundled payments in terms of clinical quality, compliance and financial operations,” Dr. Whitcomb says. Remedy Partners also represents a new type of company, he adds, in part “because we share risk with the programs we work with.”

If one of Remedy’s clients exceeds the price of a bundle, “we bear most of the risk for that,” he points out. “So we bring a very robust analytic capability to align incentives, predict risk and measure physician-level quality.”

Remedy also provides in-person and telephonic resources for care coordination, working with hospital clients to follow patients over a 90-day episode. The company is now implementing bundled-payment programs with 22 hospitals and three home health agencies, mostly in the Northeast. While doctors in these programs don’t share risk, he says, “they can have substantial gainsharing upside.”

Remedy Partners is also working with several other organizations to design programs to launch next year. Part of that design work is helping hospitals and physicians figure out whom to partner with locally and how to align incentives among potential participants.

A major opportunity in terms of incentives is often skilled nursing facilities. “You need to ‘right-size’ post-acute facility utilization to succeed with bundled payments,” Dr. Whitcomb says.

“But skilled facilities get paid on per diem rates. So when you discharge patients sooner, you threaten the facilities’ fee-for-service revenue stream.”

More information is online at remedypartners.com.