Bundled Payment

How Providers Should Prepare for New Bundled Payments

June 13, 2017 11:56 am

Mandatory cardiac bundled payment programs are set to begin in 2018 for hospitals in certain markets. Insight from experienced health systems can help organizations get ready.

The Center for Medicare and Medicaid Innovation (CMMI) finalized several new mandatory payment models in December 2016, including three for providers treating cardiac patients.

Bundled payments for cardiac care will hold approximately 1,120 acute care hospitals in 98 markets financially accountable for the cost and quality of all care for a 90-day episode of care for acute myocardial infarction (AMI) and coronary artery bypass graft (CABG). About 1,320 hospitals in 45 geographic areas are expected to participate in a separate model for cardiac rehabilitation.

Originally slated to kick off on July 1, these new models have been delayed until Jan. 1, 2018.

Despite mixed signals on the issue from the Trump administration, Billy Wynne, JD, a managing partner with the Washington, D.C.-based government relations firm TRP Health Policy, expects payment innovation to move forward because it’s a rare issue that has bipartisan support.

“On the government side historically, delivery reform, payment reform, trying to encourage value, trying to incentivize value over volume, have been bipartisan priorities,” he says. “It’s only with the Affordable Care Act and the hyper-partisanship of it that the bipartisanship got lost.”

Preparing for the New Bundles

The delay of the start date for the new models gives providers an opportunity to prepare for what many see as inevitable change in payment approaches. Health systems around the country have found the following elements to be essential for structuring cardiac bundle programs to optimize performance. 

Establish clear and achievable goals. Many providers make the mistake of entering cardiac bundled payments without a clear purpose or defined goal, says Zenobia Brown, MD, medical director of advanced illness management and bundled payments with Long Island-based Northwell Health Solutions.

“There are so many different points of entry on how you can redesign care that those points are going to designate what your outcomes are,” Brown (pictured at right) says. “Without crystal clarity, you end up doing lots of different things, any number of which may or may not be successful.”

For example, is the goal to solve a clinical problem, such as high readmission rates or lengths of stay, or is it to make money? If improving readmission rates is a priority, then a provider may implement systems to achieve that goal and to improve clinical outcomes, which doesn’t guarantee a particular financial outcome, Brown says.

“If the thing that you really were interested in is making money in your bundle, that [approach] is probably not where you’re going to find the funds,” Brown says.

Focus on inpatient costs and reducing care variation. With cardiac bundled payments, in contrast to the Comprehensive Care for Joint Replacement program, most spending is on inpatient care.

“In cardiac bundles, you typically have much lower post-acute spending compared to joint replacement bundles,” says Rocky Edmondson, senior director of bundled payment consulting with XG Health Solutions, a spinoff of Geisinger Health System.

In fact, hospitalization accounts for about half of all spending to treat AMI and about three-quarters to treat CABG.

“Understanding your spending patterns during the inpatient stay is key,” Edmonson says.  

With cardiac bundles, that means focusing on reducing costs and improving quality by reducing readmissions and unnecessary variations in care.

“When you look at a major complication like a stroke or prolonged ventilation, you could be raising potential costs to the delivery system by 90 percent or more,” says Matthew Ducsik, director of cardiovascular clinical program services with Providence Health & Services. “So, being able to engage the providers, the physicians, the nurses, around best practices and evidence-based care quality initiatives also facilitates that strategic purpose of cost reduction.” 

Let data be the guide. Brown advises providers to be very careful about where they focus when evaluating care variability. 

“Very often clinical people will go for the most exciting aspects of care redesign, such as readmissions, which are not necessarily areas that need attention or any care redesign at all,” she says.

“Until you understand whether your performance varies from a benchmark standard, you might think that number [of readmissions] is high, but really, there is no opportunity there to see a savings or see a delta if you’re already performing either at or better than a standard.” 

This analysis requires a robust way of measuring compliance with standards and best practices, along with an honest evaluation of the organization’s ability to build the infrastructure to accurately track data that is needed to understand the relationship between an activity and its outcome.

“Most places make the mistake of thinking they’re going to measure their compliance through their outcome—we have a better readmission rate, so that means that we were compliant with our best-practice protocol,” Brown says. “The two things are true but unrelated. There is a lot of assumed causality in care redesign that many places don’t have the infrastructure set up to know.”

Focus on medication management and compliance. Hannah Berg, product manager with Providence Health & Services’ Heart Institute in Oregon, says much of her work focuses on making sure not only that physicians are prescribing the appropriate medications but also that patients are taking those medications once they go home. 

In Oregon, Providence CABG patients receive a bedside visit from a pharmacist for consultation on their medications, Berg (pictured at right) says. Advanced practice providers, such as physician’s assistants or nurse practitioners, prepare patients before discharge. Patients who have undergone heart surgery get a phone call from a nurse to make sure they’re on track with their medications.

Reorganize to manage post-acute spending. Avoiding readmissions is paramount, which makes a robust care management program essential.

“There are a lot of touch points in a CABG, for example, both internally and externally,” Edmondson says.  

Following patients through their hospital stay is not enough. Someone also must make sure they’re getting to follow-up appointments and that the care they receive at skilled nursing facilities or through home health providers meets the quality standards of the hospital. 

For the subset of patients who are readmitted to the hospital, it’s necessary to understand exactly why and to closely track all skilled nursing and home health discharges, the quality of care that patients receive while being treated by another provider, and their length of stay. 

Establish a strong post-acute provider network.Essential to managing post-acute spending is the ability to establish and rely on a performance network of providers that meet expectations based on quality and length of stay. 

Patients also need immediate access to clinics to avoid unnecessarily seeking care in the emergency department (ED). Are patients heading to the ED, for example, because when they called their doctor’s office for an appointment they were told they’d have to wait two weeks?

“Lack of access is probably the No. 1 driver of readmissions,” Edmondson says. Successful providers, he says, have set up immediate-access clinics that allow same-day appointments for patients who can be treated for follow-up issues by advanced practice providers or physicians. 

Heart failure clinics monitor patients in an office setting before they’re sent home, and mobile paramedics travel to patients’ homes and evaluate them on the spot or direct them to the most appropriate site rather than automatically taking them to the ED. 

Gain stakeholder buy-in. Finally, the best data and most efficient process redesign are unlikely to succeed without the buy-in of clinical staff.

“It has to be provider-driven,” Ducsik says. “We’re very fortunate in the cardiovascular world that we have lots of data, especially around cardiac surgery and interventional cardiology, but I think it really has to go to those clinical caregivers to determine what those areas of opportunity are.” 

Ducsik adds that clinicians should be involved in the design of those interventions. “They’re the ones at the bedside, providing the care.”

Lisa Zamosky is a healthcare journalist who covers health insurance, healthcare policy, the Affordable Care Act, Medicare, Medicaid, and consumer health and finance concerns.

Interviewed for this article: Hannah Berg, product manager, Providence Heart and Vascular Institute, Portland, Ore.; Zenobia Brown, MD, medical director of advanced illness management and bundled payments, Northwell Health Solutions, Long Island, N.Y.; Matthew Ducsik, director of cardiovascular clinical program services, Providence Health & Services, Renton, Wash.; Rocky Edmonson, senior director of bundled payment consulting, XG Health Solutions; Billy Wynne, JD, managing partner, TRP Health Policy.


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