Home Coding Going all in for bundled payments

Going all in for bundled payments

August 2015

Published in the August 2015 issue of Today’s Hospitalist

JULY 1 THIS SUMMER MARKED A KEY DEADLINE: It was the last start date for participants in the CMS’ bundled payment and care improvement (BPCI) program to initiate at least one bundle for a 90-day episode of care for which they are taking financial risk. Hundreds of providers and hospitals are taking part in the three-year demonstration project, the CMS’ largest.

The CMS has identified 48 bundles that providers can participate in for Medicare fee-for-service patients. If a hospitalist group that’s part of BPCI has opted to participate in the stroke bundle, for instance, the group’s cost of treating Medicare stroke patients for 90 days will be compared to benchmark data from 2009-12. If costs come in lower, the physicians will share some of those savings “or they may have to reimburse Medicare if costs run over.

One group that’s all in is IPC Healthcare Inc., the national group practice management company based in North Hollywood, Calif. IPC Healthcare’s affiliated providers practice in over 400 hospitals and 1,700 post-acute facilities. As Ron Greeno, MD, IPC’s new chief strategy officer explains, just about every IPC site started taking risk for at least a few bundles on July 1. That launch was made possible by IPC’s new alliance with naviHealth Inc., a company that partners with health plans, health systems, ACOs and post-acute providers to manage post-acute care.

Dr. Greeno talked to Today’s Hospitalist about IPC’s entry into the bundled payments program.

The idea behind bundled payments is to deliver higher quality at lower cost. Why is it so important to get the post-acute care right?

About one-third of the dollars in a 90-day episode is historically spent in the acute care hospital, but another 30% to 40% is spent in the post-acute setting. And while hospitalists and others have lowered acute costs, there has been relatively little focus on controlling costs and eliminating waste in post-acute care.

In part, that’s because there has not been much incentive to do so. But these alternative payment methodologies have created those incentives, and we know these costs can be better controlled and that these patients can have better outcomes. If you look at the Medicare Advantage population, it has much lower post-acute costs than traditional Medicare patients.

What is naviHealth’s role?

naviHealth’s historic business was in Medicare Advantage, with a decade of experience. The company has a very large database that allows it to risk stratify patients and offer statistical determinations about where patients should go following discharge, how long they should be there and what treatment they should receive. naviHealth also has call centers and face-to-face interactions with patients during post-acute care stays to make sure they continue to be managed well.

With bundled payments, the CMS created a category of participants called conveners. Their role is to help clinical organizations apply for and participate in bundled payments. Conveners “and naviHealth is one “are the administrative entity that actually contracts with the CMS on behalf of clinical partners. naviHealth will help IPC adjudicate the DRG cost vs. the “target price” of a bundle episode, which will then determine potential gainsharing opportunities for all parties involved.

naviHealth has the big data and the actuarial expertise to help us decide which bundles to participate in, a skill set most hospitals and physician organizations don’t have. In addition, naviHealth can assess individual patients and help us develop care plans for a 90-day care episode.

And what is IPC’s role?

IPC’s role is that of an “episode initiator,” the clinical entity that actually treats patients in a particular bundle. When a patient is covered by a bundle that we’re participating in at a particular IPC site, that bundle is triggered when the patient is admitted to an IPC hospitalist.

How many IPC sites are participating?

Basically all of our acute care sites. You apply and take bundles under a tax ID number. Across our different tax ID numbers, we are participating in a variable number of bundles ranging from low single digits to more than 20.

We based the decision of what bundles to choose on a statistical analysis of performance during BPCI’s benchmark period. Obviously, there is a lot of discussion about how much risk we want to take and what the upside opportunity may be, so a key piece of being successful in this program is making the right initial bundle selection. The program does allow us to opt out of a bundle if we’re not managing it well, so you’re not stuck in that bundle for the entire three years.

How did your hospitalists prepare to participate?

We educated our physicians about the program and what bundles we are participating in at their sites. We also put methodologies in place to identify those patients as soon as they come into the hospital so we can assess them and start planning their longer-term care.

Because hospital stays are paid by DRG, you can’t really move the cost needle very much during the acute stay. But you can do better patient assessment and education and select the right post-discharge setting. IPC’s large post-acute network gives us a robust platform to perform well.

And the biggest financial opportunity is in the post-acute period, because that’s historically where the most variability is. The three best ways to save are making sure the patient goes to the right post-acute setting, optimizing the length of stay in that setting and preventing readmissions. Of course, those are all things we should be doing for patients anyway to make sure they have the best outcomes.

Providers who bring in lower costs will be able to gainshare some savings. How will payments be assessed?

The CMS will look at data by quarter, and it will probably be nine months before any dollars actually start flowing to successful organizations. We will all continue to be paid fee for service for the care provided, and we’ll have to wait about nine months before we know if we’ll be getting any gainshare. I think eventually these programs will be paid with prospective payments, not retrospective look-backs, but that’s down the road.

Will hospitalists have to see fewer patients to be able to do a better job coordinating care?

More coordination will have to take place, but I don’t believe physicians will become less efficient participating in this program. Although they’ll be team leaders, physicians won’t be doing much of the coordination. Instead, there are all kinds of models using case management, care coordinators, telephone support and home care. One thing that will likely emerge from this program will be multiple coordination models.

Are you optimistic?

I am. For the first time, hospitalists “not just the organizations they work with “can take financial risk.

I think the CMS and the CMS Innovation Center have been very thoughtful and aggressive in making this a program providers want to participate in. Now, it’s incumbent on us to make it successful “because if it’s not successful, it will go away and an excellent opportunity will be lost.

Phyllis Maguire is Executive Editor of Today’s Hospitalist.