Blog | Value-Based Payment

Analysis: More options for providers looking to directly contract with employers for episodes of care

Blog | Value-Based Payment

Analysis: More options for providers looking to directly contract with employers for episodes of care

  • Maine and Connecticut have entered into bundled payment arrangements for their state employee health plans for select procedures, according to Modern Healthcare.
  • Patients who use one of Carrum's network providers don't have to pay a deductible or any cost-sharing, according to the article.
  • Select procedures include musculoskeletal, bariatric and cardiovascular.

Modern Healthcare is reporting that Maine and Connecticut have entered into bundled payment arrangements for their state employee health plans for select procedures. “Maine patients initially have access to those services at New England Baptist Hospital in Boston and Connecticut Joint Replacement Institute in Hartford. A Maine health system soon will join the network (Carrum Health),” according to the article. “Patients also can receive services at any center in Carrum's network across the country, including in San Francisco, San Diego, Seattle, Chicago and Columbus, Ohio.

"Patients who use one of Carrum's network providers don't have to pay a deductible or any cost-sharing. In addition, transportation costs for the patient and a caregiver are fully covered by the employer plan. Self-insured employers whose plan enrollees use Carrum's network typically pay 35% less than they would otherwise pay for the service.”

In the article, the bundles are defined “much like CMS's Bundled Payment for Care Improvement Advanced program. "Carrum pays a fixed price for each episode of care, which covers a consultation with the center to assess surgery appropriateness and hospital admission or outpatient procedure, including all facility and professional expenses. Each bundle also comes with a 30-day warranty that covers all readmissions or complications related to the surgical episode. Carrum Health announced  Dec. 3 that Maine has started to offer state employees, early retirees and dependents access to the company's center-of-excellence program, which pairs patients with selected providers for more than 100 musculoskeletal, bariatric and cardiovascular procedures. Connecticut similarly will offer Carrum's network to members of its state employee benefit plan starting sometime next year, the company said.”

Takeaway

One of the challenges hospitals and physicians have faced in expanding their revenue at risk through bundled payments beyond CMS models like BPCI, and now BPCI-A, and CJR is limited receptivity from employers in their local markets. Often local employers  lack both the sophistication to enter into these arrangements and the number of lives to make the administrative costs worthwhile. And this has slowed progressive health system’s transition “from volume to value,” leaving them at risk of referral disruption from health plans with employed/aligned providers or new entrants.

Platforms like Carrum’s, Remedy’s and Premier’s (Contigo), among others, are addressing this market failure by health plans and third party administrators in responding to both the demands of employers for higher value care and the providers who want to meet these demands.

These platforms match employers who lack the sophistication to develop value-based payment arrangements with high-performing health systems and provide a payment model that rewards efficient providers. To the extent the episodes use the same design and definition of those in BPCI-A, it also reduces the administrative burden for providers. This creates an opportunity for providers to retain and grow market share in an increasingly competitive environment. And they present some risk to less innovative plans of disintermediation.  

About the Author

Chad Mulvany

is director, healthcare finance policy, strategy and development, HFMA’s Washington, D.C., office.

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