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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.
With the growth of CMS’s Alternative Payment Models, the moments when physicians directly care for patients - the points of care - are getting vastly more complicated and information-needy. Let’s take a look at why and how this is happening!

The Environment
Recently, CMS set a clear path to creating new risk sharing programs for providers through alternative payment models such as Bundled Payments for Care Improvement (BPCI), which my colleague Tracy outlined well in this terrific post. The broad based BPCI program gave way to more specialty specific programs such as the Oncology Care Management Model, Nephrology’s ESRD Care Model, and Orthopedics’ Comprehensive Care for Joint Replacement model.

Collectively these programs signal a new era where previously disparate episodes of care are financially bound together. The new twist is that the payments, and hence risk, cover multiple providers and multiple sites of care. Now providers in different businesses are wrapped together in common financial risk, where before they operated independently. This new dependence asks more of each patient encounter and as a result, communication and coordination needs are growing exponentially.

These new alternative payment programs have a common general structure. First, each requires a risk period that includes all patient costs over a period ranging from 30 to 90 days. Second, each requires certain quality metrics be met. Third, each requires certain financial outcomes usually obligating an organization to operate at lower than its historical cost over the risk period. The organization can earn bonuses if the cost performance is below historical cost, or they must repay CMS for any costs that run above historical cost.

The first two elements trigger a need to work collaboratively with other caregivers given that most patients receive care from a variety of providers over such time periods. The last element, financial outcomes, acts to incentivize broad engagement since it can reward physicians with bonuses. Organizations can theoretically make up to a 50% bonus on their Medicare reimbursements occurring within the program. Taken together, these elements: risk, quality, and financial performance, require providers to be particularly attentive to the decision-making around patients in these programs. Each decision made at the point of care by an individual provider affects risk, quality, and finances not only for themselves, but also for every provider involved in the program.

On the Ground
Given this new importance of decision making at the point of care, there is a lot of new information to consider. Each risk period starts in the hospital and follows the patient into their post acute outpatient settings, which are typically owned by a different entity than the hospital. Thus, doctors at the point of care need to evaluate information such as:

• What is the site of care best suited for the patient’s condition: a skilled nursing facility, Home Health, inpatient rehab, or acute long term care?
• What site of care promises the best outcomes?
• Which particular provider will do the best job with that particular patient’s diagnosis and needs?
• How do we discuss this with the family and their particular dynamics and medical literacy?
• What quality measures are unmet for that patient?

How to get all of this information to the provider at the point of care - where decisions about the best, most effective care path for the patient must be made - is a growing problem. Further complicating matters are:

• The availability and continuity of the hospital case managers who have a primary responsibility to get patients discharged from the hospital in a timely manner;
• The many physicians who may be on the case with their demanding caseload;
• The frequent uncertainty of who would follow the patient post discharge and the families’ desire to have the patient’s needs fit into their busy lives.

All in all, this is a lot of new information to address at the point of care, and some of it quite complex with many different and diverse audiences. These data points highlight the very real question of who will be consistently available to deliver the information needed.

So therein lies the challenges for success in any of these Alternative Payment Models. There are new outcomes to consider spanning up to 90 days of care across all care settings, many beyond your walls, with a quality scorecard to meet. All of this impacts financial risk if the goals aren’t met. It seems inevitable that technology must rise to the task of delivering this data at the point of care, if alternative payment programs are to ever succeed. However, the challenge for those who seek to enable with technology is how well they can understand this thicket of needs and help you build the right care network, around each patient, extending to all the places you need it to go, and to all the people you need involved. I came to pMD to tackle such complex issues. Here, we love your difficult challenges.
About five years ago, my grandmother, Virginia, was leaving Sunday mass when a pickup truck backing out of its parking spot nudged her off her feet and onto the pavement. What resulted was a minor hip fracture and a very concerned congregation. In true Virginia fashion, her only displeasure was knowing she’d be confined to a bed and missing out on her weekly casino and bingo outings. And so begins the sequence of health care events that eventually lead to a costly recovery.

At that time, in a case like Virginia’s, physicians were reimbursed in a Fee For Service (FFS) model. In FFS, Medicare makes separate payments to each provider who treats a patient across an episode of care. So in my grandmother’s scenario, the ambulance, specialist, hospital, primary care physician, and physical therapist were all paid separately for the services rendered for her fractured hip. How was this a disadvantage to grandma? This type of payment model may have resulted in fragmented care, minimal care coordination across different health care settings, unnecessary tests, and it also seemingly rewarded quantity of service over quality of care. Individual payments may have reinforced individual effort and in turn, left grandma with a multitude of medical bills.

Bundled Payments for Care Improvement (BPCI)

The Center for Medicare and Medicaid Innovation is experimenting with new, innovative payment models that hope to offset the high cost and inefficiencies of the current FFS model. One of the more promising models is BPCI, or Bundled Payments for Care Improvement. The goal is to potentially reduce Medicare and Medicaid expenditures while enhancing quality of care.

Why BPCI?

The “bundle” in Bundled Payments for Care Improvement represents all health care services a patient receives over an entire episode of care. In grandma’s case, it’s all the services she receives during her road to recovery from a fractured hip. While there are various BPCI models currently being assessed, the general foundation of BPCI follows a format such that providers team up across the care continuum to treat a patient. These teams as a whole receive a single, fixed, predetermined payment amount designed to pay all the providers involved in that one episode of care based on historical costs. These teams essentially enter into a payment arrangement that includes financial and performance accountability. If the actual cost of care for that episode falls below the target bundled payment, then the team benefits from a gain sharing bonus. If actual costs exceed the target bundle costs, then teams are dinged financially. The goal of a bundled payment model is to incentivize teamwork and collaboration among providers to provide better care in a more efficient and coordinated manner.

Does it sound too good to be true?

While bundled payment models are intended to encourage the positive outcomes mentioned above, there may be some unintended consequences. For example, predicting the total cost of an episode of care can be difficult. If a provider finds that actual costs for an episode of care might exceed the target costs, there may be less incentive for a provider to provide necessary care in order to keep costs low. Similarly, a provider might feel encouraged to overstate a patient’s illness to negotiate a higher bundle payment. In addition, the many providers involved in a care team may not entirely agree on the distribution of the bundled payment.

One thing that everyone in the health care industry can agree on is that everyone benefits from an increase in the quality of patient care and financial transparency. Whether or not that comes with bundled payment models is an ongoing debate, but the hope is to continue to learn from these new reimbursement models and start moving in the right direction. For now, grandma Virginia is just thankful to be fully healed and able to attend bingo night free from her warp-speed senior scooter.