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CMS soon to start new voluntary bundled-services plan


The Centers for Medicare & Medicaid Services (CMS) is implementing a new voluntary bundled services payment model for Medicare.

“BPCI [Bundled Payment for Care Improvement] Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value,” CMS administrator Seema Verma said  Tuesday.

But the Trump administration has resisted  mandatory bundled care models. Indeed, last November CMS canceled mandatory bundled care payment models for hip fractures and cardiac care, and reduced the number of regions required to participate in a bundled-care payment system for joint replacement.

Carter Paine is chief operating officer of CBPCI Advanced, a Brentwood, Tenn.-based company that helps manage patients’ transition to post-acute care and has participated in the older model.  He told Med Page Today that the new bundled-care model, to  start in October, is different in important respects from the older one.

For one thing, he told the news service, CMS is, in Med Page’s paraphrase of his remarks, “incentivizing providers to reduce costs by 3 percent for each episode of care, rather than 2 percent as in the old model.”

In addition, “it lasts longer, up to 2023, which we think is a good thing.”

Mr. Paine added that the fact that CMS has fewer episodes of care to choose from may indicate that “of the 48 original [episode types], many of those weren’t being executed on, so probably they just bore down to episodes that actually have real volume.”

“I think BPCI 1.0 has proven to be successful for those participants that have hung in there. On the last go-round, people were sticking their toes in the water, and a lot of people were too nervous to get in — that felt more like a pilot, and this is more of a long-term commitment. Given the success we’ve had in BPCI 1.0 … I think people will participate more in this one, given there’s a game plan in hand.”

To read more, please hit this link.



5 building blocks for successful bundling

“Baby at Play,” by Thomas Eakins (1876).

Win Whitcomb, M.D., writing in Hospitals & Health Networks, presents what he calls five “building blocks of success” in bundled payments. He is chief medical officer at Remedy Partners, in Darien, Conn.; an assistant professor of medicine at the University of Massachusetts Medical School,  and a founder and a past president of the Society of Hospital Medicine.

Here are his building blocks, in abbreviated form:

1. Data

“For the first time, we are able to view cost data over the entire span of an episode, including acute care and the post-acute recovery period… Administrators and clinicians can identify variation in costs or quality, analyze processes underlying the variation and then implement new processes designed to mitigate such variation.”

“In addition, information systems are emerging that provide access to a patient’s location and clinical status over the entire course of an episode (something most electronic health records cannot do).”

2. Incentives

“Bundled payments disrupt the fee-for-service incentive to increase utilization. Medicare’s Bundled Payments for Care Improvement program enables hospitals, physician groups, post-acute facilities and home health agencies to bear first-dollar risk for an episode. The risk-bearing entity’s monetary reward for lowering costs can be invested in human resources (e.g., patient navigators) and technological resources (e.g., performance reporting and patient tracking software) that help the program succeed.”

“Gainsharing, most often offered to physicians, but also possible with hospitals, nursing facilities and other providers, can ensure that the risk-bearing entity and physicians or other providers have the same goal. Gainsharing in these programs can reward either internal cost savings (derived from, for example, bulk purchasing of implantable devices) or the net payment reconciliation amount (derived from, for example, lower post-acute facility utilization or fewer readmissions).”

3. Post-acute performance networks

“Successful risk-bearing entities build networks of post-acute facilities and home health agencies to ensure efficient and high-quality care for patients after an episode. Inclusion in such a network can be based on costs, readmissions or quality — such as star ratings, the availability of on-site providers and disease specialty programs. ”

4. Care redesign

“CMS promotes care redesign, or improving quality while cutting costs, as the defining feature of bundled payments. Successful organizations have redesigned care for specific bundles like joint replacement; others have redesigned care in an across-the-board fashion agnostic to bundle type.”

“Examples of across-the-board care redesign include deploying an early mobility program, using a decision-support tool to determine an optimal post-discharge location, applying rules to identify candidates for palliative care, having a structured goals-of-care conversation or using protocols to avoid unnecessary acute care transfers of skilled nursing patients. ”

5. Pooling knowledge

“BPCI  supports the role of a ‘convener,’ working with ‘episode initiators’ (providers) to deploy the program. Conveners can provide crucial support for healthcare organizations that aren’t able to go it alone because of a shortage of resources or expertise in data analytics, information technology, care redesign and, in some cases, the assumption of a portion of financial risk.”

To read more, please hit this link.

Dearth of data on bundled payment effects

A Modern Healthcare news analysis finds a dearth of data on the effects of bundled-payment models on  costs and  healthcare quality, a challenge emphasized by the latest government report on Medicare’s voluntary Bundled Payments for Care Improvement (BPCI) initiative.

“In one clinical episode—orthopedic surgery—setting a flat price for all of the care delivered during the episode of care appeared to reduce costs and improve patient outcomes. But for others, there simply wasn’t enough evidence to declare the bundle a success or failure,” the news service concluded.

“It’s hard to draw conclusions either way from this report,” said Dr. Chad Ellimoottil, an assistant professor at the University of Michigan whose research focuses on alternative payment models, including bundled payments.

“The results to me just reinforce what we already know,” said Francois de Brantes, executive director of the Health Care Incentives Improvement Institute, a not-for-profit organization that studies and promotes value-based payment models. “For some of these episodes, like joint replacement, it works fine,” he told Modern Healthcare. “Everything depends on the episode or the condition or the illness you’re looking at.”

Modern Healthcare said that Mr.  de Brantes “was less sanguine about the administration’s full-steam-ahead approach. He questioned several aspects of its bundle design, including that the episodes are triggered by hospitalization rather than encompassing the management of a condition. He also criticized the lack of adjustment for patient severity.”

“Could it be a lot more definitive and improved over time? Of course,” de Brantes said of Medicare’s bundled-payment models. “It’s up to the government to really come to grips with how to design this the right way and how to implement it the right way.”

But Mark Fendrick, a professor at the University of Michigan and director of its Center for Value-Based Insurance Design, said: “The BPCI evaluation adds to the growing body of research that changing provider incentives away from a volume-driven model can produce modest savings without compromising quality of care.”

To read the Modern Healthcare analysis, please hit this link.



Mixed results from CMS’s orthopedic bundle initiative


The CMS has released its second annual evaluation for Models 2-4 of the Bundled Payments for Care Improvement (BPCI) initiative, which details the results from the first year of the initiative, which, for now, involves orthopedic surgery.

Patrick Conway, M.D., CMS’s acting principal deputy administrator and chief medical officer, called the results for orthopedic-surgery bundles encouraging, noting that under Model 2, participating hospitals were shown to have achieved statistically significant savings of $864 per episode while improving quality.

To read Dr. Conway’s remarks, please hit this link.

But, the report also showed that average payments for spinal-surgery episodes rose $3,477 more compared to the increase among nonbundling providers.

HealthcareDIVE commented:

“While the report stresses additional future analyses will be required to estimate any overall savings impact to Medicare, the CMS highlighted its optimism that 11 out of the 15 clinical episode groups that were analyzed did show indicators for potential savings.

“As more data become available over the next year and beyond, upcoming reports will be able to better estimate the BPCI initiative’s impacts on both costs and quality. This report, prepared by The Lewin Group, was the second of five planned annual reports. It looked at the experiences of Phase 2 participants in the first year of the initiative, in which episodes were initiated between October 2013 and September 2014. The report’s qualitative results reflect participants’ experiences through June 2015, the researchers said, noting that participation has continued to grow since, with more providers entering Phase 2 in April and July 2015.’’

To read the HealthcareDIVE analysis, please hit this link.

Meanwhile, CMS is moving ahead developing  additional bundled-payment models. Hit this link to look at one such model — cardiology. 

CMS offers 2-year extension for bundled-payment program


CMS is  offering participants in the Bundled Payments for Care Improvement initiative the option to extend participation an additional two years, says a blog post from Patrick Conway, M.D., CMS’s acting principal deputy administrator and chief medical officer.

Rather than ending the program this fall, participating providers can extend participation through Sept. 30, 2018.

Becker’s Hospital Review says that the agency hopes that “the extension will help it better determine the effectiveness of the program, which aims to incentivize providers to improve care coordination by paying for services patients receive across an episode of care, such as a heart bypass surgery or hip replacement.”

Dr. Conway wrote: “By extending their participation, CMS will be able to provide a more robust and rigorous evaluation of the initiative and determine whether the efforts of bundling payments are successful in providing better care while spending healthcare dollars more wisely”.

The initiative tests four payment models, which vary based on the services in the episode of care and whether payments are made prospectively or retrospectively. BPCI has 1,522 participants, nearly all of which are in Models 2, 3 and 4.

The extension will be available to providers in Models 2, 3 and 4 that began the BPCI initiative in October 2013 or in 2014.

Big successes in a Penn. bundled-payment program

Integrated Patient Relationships for Success with Bundled Payments

Clinician-led Design Incorporates Human Needs Across Episodes of Total-Joint Replacement

CMS is pushing providers to fully integrate care to improve patients’ experience and outcomes, which can also decrease the overall cost of care episodes because of faster recoveries and fewer readmissions.

Cambridge Management Group (CMG), working with colleagues at Pyxera, responded to this imperative in a recently completed year of helping PinnacleHealth and other healthcare providers in central Pennsylvania redesign their total-knee-replacement (TKR) episodes.

The work was initiated within PinnacleHealth’s participation in the CMS Bundled Payment for Care Improvement (BPCI) program as well as within a pilot initiative with a large employer involving total knee replacement. The aim of CMS (and other payers) is to achieve better, more integrated health services while saving money – in the case of CMS, the taxpayers’ money.

Among the outcomes:

  • Identifying and developing physician leaders in context of the TKR design team, a process that can serve as at least a partial template for bundled-payment programs in other service lines.
  • Establishing personal/professional links with clinicians across the care episode – essential for care and cost coordination, empathy and higher morale in the working environment.
  • Demonstrating advanced market methods important in attracting a large commercial payer.

The work was suggested by CMG and sponsored by Dr. George Beauregard, chief clinical officer at PinnacleHealth. Dr. Beauregard saw an opportunity to demonstrate a safe, early-learning collaboration with the Orthopedic Institute of Pennsylvania (OIP); Arlington Orthopedics; perioperative orthopedic staff at Pinnacle, and selected post-acute-care providers.

Dr. Beauregard, other Pinnacle leaders, OIP and Arlington saw the potential of redesigning certain aspects of care delivery within the TKR arc of care to improve the patient experience and outcomes, gain additional process efficiencies, improve communication between all stakeholders involved in a TKR episode and reduce costs. The BCPI program was a laboratory for peer-to-peer learning and innovation for use with all TKR payer groups and, eventually, other bundled episodes of health services. (Dr. Beauregard recently became the chief physician executive at St. Luke’s Health Partners in Boise.)

The work was led by Dr. Jack Frankeny, CEO of OIP. Dr. Frankeny saw an opportunity to demonstrate clinician-led design across the episode to re-calibrate the TKR value-proposition (high quality and easy access) to consistently incorporate human-centered features. At the outset, the TKR service was a well-regarded and busy regional service navigated by resourceful patients and families. The objective was to integrate siloed services within the program for a seamless experience preferred by patients, families and providers.

The lens for focusing the work, evidence-based-design (EBD) methods, was provided by Tad Simons, Ph.D., and Don Westwood, founders and partners in Pyxera, in collaboration with CMG. They have nationally recognized expertise in designing systems, bringing evidence-based design to healthcare networks as their staffs learn to manage interactions across newly integrated services. EBD is one pathway to embed skills/values for adaptive, empathetic care coordination — the essential competence to win with bundled payment.

Participants called the experience very successful, and see it as offering guidance for bundled payments in other service lines, such as hip replacements and heart-bypass surgery.

The work first required interviewing clinicians across the continuum of health services to understand the interactions between them. At Pinnacle and most other systems, individual clinicians have tended to have remarkably incomplete knowledge of the identities and work of colleagues in other parts of a patients’ care. The lack of integration has hurt outcomes in some cases, undermined collaboration between clinicians and between clinicians, patients and family caregivers and led to expensive inefficiencies, including duplication of services.

Dr. Simons led interviews of key players across the course of a patient’s care that provided information, insights and, occasionally, inspiration for designing a human-centered experience enhancing the effectiveness, efficiency and low cost already present in the TKR service.

The basic sequence in the project was:

  • Assessing patients’ pre-op readiness for surgery to reduce complications and prepare well ahead of time for the discharge to home.
  • Working with patients and the hospital’s primary-care network to improve patients’ readiness for surgery.
  • Visiting patients’ homes to ascertain social factors, especially the capacity of family caregivers, to help streamline discharge.
  • Preparing patients for productive post-op physical therapy by connecting early to the physical-therapy team.
  • Coordinating in-hospital plans of the surgeon, anesthesiologist and unit staff to enable discharge after 36 hours.
  • Coordinating and enhancing care between multiple providers preceding the first surgical follow-up visit.
  • Coordinating care between multiple providers and improving outcomes during rehabilitative therapy through the end of care.

The project’s leaders are enthusiastic about the experience. Dr. Simons listed the pilot’s key achievements as:

  • “Better coordination and planning with services outside the hospital — for example, physical therapy, occupational therapy and home visits.’’
  • “A deeper recognition of the importance of patient selection and preparation.’’
  • “Spawning excitement among clinical staff about using design thinking for new process development.’’

Dr. Frankeny, the Orthopedic Institute CEO, called the bundling project a “crash course in value-based care for our orthopedic surgeons who were born and raised in the fee-for-service model. They also learned how important collaboration is with all caregivers throughout the health-service episode. It’s the only way to win in the bundled environment.’’

Dr. Frankeny lauded the Pinnacle administration’s transparency about costs, saying that it helped build trust among surgeons and other clinicians.

He noted, as did Dr. Beauregard, the initial strong opposition of some surgeons, who tend to be “Type A individuals who want to win.’’

But, he said, “Confront difficult docs with evidence {about cost and medical outcomes} and they will listen. And they have come to understand they will have to learn to live with a risk-and-value-based system because it will have a direct impact on their income and in how they run their practices. They must do something or something will be done to them. They understand that the data will compel change in any case.’’

And as part of the brave new value-based world, Dr. Frankeny noted, there’s a new imperative to go with the cheapest procedure if there’s no evidence that it produces worse medical outcomes.

Everyone in the project came to understand more than ever before the importance of the interactions between clinicians and other caregivers along all steps of a patient’s care.

Dr. Beauregard, the former Pinnacle chief clinical officer, noted the project’s victory over skepticism and outright opposition. The first reaction of one surgeon leader was “over my dead body,’’ he halfway joked. But physicians changed their minds as Dr. Simons demonstrated the strengths of the design process in improving outcomes, efficiency and collaboration, even as the doctors were reminded of the inevitability that the CMS — armed with more precise medical-outcome and cost data – would make bundled payments mandatory in multiple service lines.

And, in any event, “fixed price points will be beaten down in the commoditization’’ as CMS caps the prices of many procedures.

Dr. Beauregard said of the bundled-payment project: “Change is mandatory. We’re facing reality.’’

If the Pinnacle pilot program is any indication, that reality will be more than tolerable.

To elaborate on the success factors noted at the top of this article:

  • Executive and physician sponsors have used credibility and energy to enlist previously unconnected hospital executives, physicians and other patient-facing staff and a wide-range of other provider-partners.
  • Physician leaders with clinical and organizational gravitas have helped guide busy colleagues (across the episode) as they transform daily work while rebalancing operations and finances.
  • A process (lens) useful now and in the future to enlist and focus the deep and diverse competencies of the full range of providers, patients and families and to inform and inspire the clinician-led design team.


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