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Fitch sees ‘short-term positives’ in bundled-payment-program cuts


Fitch Ratings says that recent CMS announcements that it will cancel or shrink bundled-payment programs might create “short-term positives” for some healthcare areas.

Last month, CMS published a proposed rule canceling the cardiac bundled-payment program and the episode payment models program as well as reducing the number of mandatory geographic areas for joint bundled programs to 34 from 67.

Fitch said the announcements “will allow for more flexibility in choice of care settings, albeit at the expense of some of the catalysts driving coordination and risk-sharing amongst providers.”

Healthcare Dive commented: “{P}providers and payers intent on fully transitioning to value-based care see the changes as a setback. Hospitals that were participating in the CMS programs also point to the investments they had already made in implementing bundled models.’’

Fitch said CMS’s changes to bundled payments ordered by HHS Secretary Tom Price, M.D., a former orthopedic surgeon, “indicate alternative payment models will not be as meaningful a portion of Medicare payments as the previous administration aspired that they would be.” Dr. Price has indicated his great interest in maintaining and indeed raising the compensation of U.S. physicians, who are the highest paid in the world and who benefit from the still dominant fee-for-service model.

Fitch says that ambulatory surgery centers (ASCs) should see volume rise as a result of the changes. That’s because the moves would tend to reduce volume at general acute-care hospitals, with that business going to ASCs

Still, hospitals will at least get “a reprieve from the compliance and risk-sharing elements of bundles’’.

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Highmark starting bundled payments for cancer care


Highmark’s imposing headquarters in downtown Pittsburgh.

Following some other major insurers, Pittsburgh-based Highmark will start a bundled-payment program aimed at paying for “value” instead of for the number of procedures in cancer care, reports the Pittsburgh Post-Gazette.

The insurer’s new bundled-payment option includes 19 cancers  treated with medication as well as radiation treatment for breast cancer. Instead of requiring physician to obtain pre-authorization for care, Highmark pays them a lump sum that it negotiates individually with each doctor based on past payments to that provider.

“They can treat the patient as they see appropriate because the health plan is stepping out of the middle,” Virginia Calega, Highmark’s vice president of medical management and policy, told the newspaper.

Tom Pellathy, senior vice president of product network and reimbursement at Highmark, said that  more physicians have applied to participate in the bundled-payment initiative than the insurer can now accommodate.

Providers in the program are required to use National Comprehensive Cancer Care Network treatment guidelines, but they can use their discretion in how those guidelines are used, Mr. Pellathy added.

The initiative is a part of a partnership with Allegheny Health Network and Johns Hopkins Kimmel Cancer Center, called the Highmark Cancer Collaborative. Highmark’s regional rival, UPMC Health Plan, wants to start its own bundled-payment cancer-care initiative later this year.


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