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Bundled Payments for Care Improvement Initiative? Now that’s a mouthful

We all know from previous posts here, here, and here that BPCI is alive and thriving in the health care world under CMS’ Episode-based Payment Initiatives. We’ve probably talked your ear off by now about what Bundled Payments are… but what’s being done about it and how can you be successful?

To put the concept of bundles into perspective, let’s imagine Medicare has baked you a scrumptious Georgia peach pie. This one pie must be shared amongst your whole family. For example, in the case of BPCI Model 2, which includes acute and post-acute care, we’ll need to split the pie between providers Acute Stay “Anna”, Physician “Phoebe”, and Post-Acute “Polly.” As the biggest players of the group, Acute Stay Anna will take more than half of the pie. Physician Phoebe will then take most of the remaining slice, leaving Post Acute Polly with just a tiny sliver of crumbly crust. How is Polly going to manage?

This situation is synonymous with the dollars distributed per bundle. After so much is spent during the hospital stay, not much is left over for post-acute care. In order to stay below the target bundled price and maximize the gainsharing bonus from Medicare, health care organizations must determine the most cost-friendly, yet still effective way to allocate these final dollars.

Cue: Home Health Care.

Quoting from the medicare.gov website, “Home health care is a wide range of health care services that can be given in your home for an illness or injury. Home health care is usually less expensive, more convenient, and just as effective as care you get in a hospital or skilled nursing facility.

More and more evidence is arising to support the benefits of utilizing home health care within a bundled treatment plan. An example of particular importance is the involvement of home health care in major joint replacements of the lower extremity. Hip and knee replacement is the most common inpatient surgery for Medicare beneficiaries and cost Medicare more than $7 billion for hospitalization alone in 2013. In a study commissioned by the Medicare Payment Advisory Commission, it was found that the cost for joint replacement patients treated at home was approximately $3,500 less than for patients discharged to a skilled nursing facility, and $8,000 less than those sent to inpatient rehabilitation facilities. With those numbers, it’s not surprising that BPCI patients are more often skipping over SNF and instead sent on their merry way home.

Health care systems are going to have to keep up as CMS continues to add more episode-based payment models to the list. On December 20, 2016, four new mandatory models were announced:
1. Acute Myocardial Infarction (AMI) Model;
2. Coronary Artery Bypass Graft (CABG) Model;
3. Surgical Hip and Femur Fracture Treatment (SHFFT) Model; and
4. Cardiac Rehabilitation (CR) Incentive Payment Model.

So more players are being added to the roster, and more rules added to the rulebook. What does this mean for health care professionals?

Collaboration across the entire health care continuum is going to be pivotal now more than ever - our outcomes depend on it! This brings up the issue of how providers Acute Stay Anna, Physician Phoebe, and Post Acute Polly are going to communicate with each other about their mutual patients. It’s time for care teams to improve communication with HIPAA compliant text messaging or care coordination software. And maybe grab a slice of the Georgia peach pie too.
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