Bundled Payment

Ask the Experts: Bundled Payment Contracts

August 10, 2016 3:09 pm

What are some changes in the way payment and reimbursement professionals should view health plan contracts when moving to bundled payments?

Answer 1: Payment and reimbursement professional should consider the following areas when moving toward bundled payment arrangements.

Risk identification. What are the risk corridors over time? Moving immediately from fee-for-service to bundles should have a ramp-up period that identifies risk/savings and other definitions. Timing and schedules should also be considered.

Provisions for readmissions. If patients are readmitted under a bundled payment model, how will those charges be handled?

Membership attribution rules. Can they be retroactive? If so, what window is available to the provider?

Data review. How are reviews validated and what are the time corridors for reviewing/appeals and any discrepancies? If providers move to bundles where they assume more risk, what is the impact on the diminishing need for extensive preauthorization processes or post-procedure audits? Does more risk assumption translate to less administrative factors?

Potential tiering tool. Does a bundled arrangement become appealing in narrowing networks and does that help an organization’s marketing strategy? Related provisions should be included in the contract.

This question was answered by: Paula Dillon, director of managed care, Illinois Hospital Association, Naperville, Il., and is a member of HFMA’s First Illinois Chapter.

Answer 2: My hospital is still working on defining an episode correctly so that outliers can be defined and handled. As a cancer hospital, we want to appropriately value the up-front diagnosis work from the oncologist, pathologist and radiologist which is so critical for determining the correct disease plan.

In a world of narrowing networks, these value packages or bundles can demonstrate to health plans and employers the outcomes they are paying for and the value of a dedicated cancer center.

This question was answered by: Ruth Landé is vice president, patient revenues, Memorial Sloan-Kettering Cancer Center, New York, N.Y., and a member of HFMA’s New York Metropolitan Chapter.

Answer 3: Clearly define population, what is inside and outside the bundle with outliers or stop loss clauses, and how risks—wins/losses—will be shared between stakeholders. Determine who measures performance, how it is validated and when, and what data sets are used. Also consider who prepares those data sets.

This question was answered by: Matt Levsen, CPA, MBA, FHFMA, associate CFO, University of Missouri Health Care, Columbia, Mo., and is a member of HFMA’s Show-Me of Missouri Chapter.

Answer 4: I believe that insurers should be in the risk business, not providers. However, risk is being shifted to providers, and I don’t think there is a way to stop this trend. It is important to remember that if a particular insurer does not have a strong market position, a provider can take a strong position on some of these difficult issues. However, if an insurer’s position is strong, the challenge for a favorable contract becomes greater.

This question was answered by: Robert J. Ellertsen, FHFMA, is a former hospital CFO with more than 35 years of experience in healthcare finance and a member of HFMA’s Massachusetts-Rhode Island Chapter.

What do you think? Please share your thoughts on this question in the comments section below.  

The information provided through the Forum’s Ask the Expert service does not constitute legal advice, even when the advice is provided by lawyers. You need to obtain your own legal counsel for legal advice, and consider the laws and regulations that govern your state. The content and opinions expressed are those of the Forum experts, and not that of their employers or of HFMA. HFMA does not endorse the material or warrant or guarantee its accuracy. The responses are based only on the specific facts or circumstances provided. Forum experts cannot be held liable for outcomes related to any information provided.

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