Bundled Payment

Medical Bundles Get Another Look

January 9, 2019 8:18 am

Physician practices that have disfavored medical bundles in the newly launched BPCI-Advanced may be missing out on an opportunity, says one industry adviser.

Jan. 8—Despite concerns that savings and quality improvements are elusive in bundled payment episodes for chronic medical conditions, one of the largest health systems aims to expand its use of such payment models.

San Francisco-based Dignity Health, which is the fifth largest health system in the nation, has taken on both medical and surgical bundled payments as part of Medicare’s Bundled Payments for Care Improvement Advanced (BPCI-Advanced) program. The first performance period for the newest Medicare bundled payment program began Oct. 1 and runs through Dec. 31, 2023. BPCI-Advanced allows physician group practices (PGPs) and hospitals to select from among 29 inpatient and three outpatient clinical episodes, for which they receive bundled payments.

“Medical patients took much more management than the surgical patients, but there was also much more opportunity to do a better job,” said Gary Greensweig, DO, vice president and chief physician executive for physician integration at Dignity, reflecting on the organization’s results in a recently concluded BPCI model.

The strong interest followed a Dignity analysis that found it performed better in medical tracks of the recently concluded model. That performance has given the organization confidence in its ability to perform well in BPCI-Advanced, Greensweig said in an interview.

Dignity also has the advantage of experience, which it plans to build on in BPCI-Advanced.

The journey to positive medical results was not smooth for Dignity. For instance, the 26 Dignity hospitals in BPCI took about a year to correctly train their staff and ensure they were placing patients in the best post-acute care (PAC) setting. For the first couple of years, Dignity was penalized financially because its performance lagged the program’s benchmarks.

The experience of Dignity ran counter to some early research on the effect of bundled payments on chronic medical conditions.

For instance, researchers who published a July study in the New England Journal of Medicine assessed cost and quality for five commonly selected BPCI conditions—congestive heart failure (CHF), pneumonia, chronic obstructive pulmonary disease (COPD), sepsis, and acute myocardial infarction—over an average of seven months of BPCI participation. They found no statistically significant difference in spending decreases between BPCI and non-BPCI hospitals. Additionally, they found no observed differences in readmission rates, mortality, or other quality measures.

Although final program-wide results for BPCI have not been released yet by the Centers for Medicare & Medicaid Services (CMS), some observers have seen positive results for medical bundles similar to the results at Dignity. For instance, naviHealth found significant improvements in both medical and surgical bundles among the 50 hospitals for which it managed BPCI episodes. Average length of stay in skilled nursing facilities (SNFs) declined for patients in medical bundles from 25.4 days to 21.6 days.

That reduction was one of the biggest drivers of savings found among those 50 hospitals, said Jay LaBine, MD, chief medical officer at naviHealth. The average savings for those hospitals was $2,000 for each 90-day episode of care in BPCI.

“Bundled payment, from our perspective, is working,” LaBine said in an interview.

Reasons for Reluctance

In October, CMS announced that 1,299 entities had signed agreements to participate in BPCI-Advanced, including 832 acute care hospitals and 715 physician group practices.

But LaBine is hearing from PGP leaders that they are wary of taking on bundled payments for patients with chronic health conditions because those bundles are viewed as less manageable than preplanned surgical bundles of generally healthy patients.

LaBine said physician leaders ask him, “How are we affecting their care enough in that 90 days to generate savings?”  

That reluctance also was apparent in a recent analysis of hospital and PGP participation in the newly launched bundled payment program. Hospitals consistently comprised large percentages of medical bundle participants, and PGPs were overrepresented among surgical bundles. For instance, acute care hospitals comprised 33 percent of BPCI-Advanced participants in the “major joint replacement of the lower extremity” bundle and 61 percent of the CHF episodes.

Concerns about whether medical bundles are manageable only compound PGP leaders’ fears that they may have to pay back CMS if they fail to reach their benchmarks. The BPCI losses owed by Dignity Health were covered by the health system and not by individual practices, Greensweig said.

Avoiding BPCI-Advanced—which next will accept new entrants in 2020—also could impact physicians’ performance under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Successful physician participants in BPCI-Advanced qualify for the 5 percent annual bonus under MACRA.

Ways to Succeed

LaBine said many concerns of practices stem from a lack of knowledge about ways to succeed in Medicare bundles.

That opportunity for improvement is clear from the finding that baseline 90-day readmission rates for CHF range from 45 percent to 65 percent among naviHealth clients.

“Granted, there are a lot of challenges with managing CHF within that 90 days, but from a clinical perspective that’s a really striking statistic,” LaBine said. “We feel that by doing this, and by getting paid for it, we can really start to design a better care system for CHF and COPD patients, so they don’t get readmitted as much.”

Greensweig said practices need to realize that they will be taking care of patients with chronic medical conditions regardless of their participation in a bundled payment program, and bundled payments offer much more support in addressing the patients’ social determinants of health.

“Most of the providers have felt that they have gotten more help with their patients through the bundled payment program,” Greensweig said.

Clients of naviHealth have found that the keys to success with medical bundles start with the first care transition for such patients.

“Are you as a patient evaluated appropriately to say, ‘Yes, you can go home with home health care, or do you need to go into a SNF?’” LaBine said. “That is a key decision point. And the way we have done it in the past, we have not used good tools or good decision support.”

Other drivers of success include distinguishing whether patients belong in acute care rehabilitation or a lower-cost setting and focusing on driving down readmission rates, LaBine said.

Meanwhile, Dignity Health has found that its BPCI results varied by region, based on its success in building hospital-PAC relationships and other factors.

Another tactic was to quickly drop BPCI episodes of care in which Dignity hospitals were performing poorly. BPCI-Advanced participants will have a similar opportunity in the spring, although hard data on provider performance in the program is unlikely to be available by then, LaBine said.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Email him at [email protected]. Follow Rich on Twitter: @rdalyhealthcare


googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text1' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text2' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text3' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text4' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text5' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text6' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text7' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-leaderboard' ); } );