Evidence of bundled payment success is growing. Information released by Medicare’s largest group of participants shows growing rates of cost reduction/savings. Savings to Medicare in the Bundled Payment for Care Improvement initiative (BPCI) already dwarf the level of savings in Medicare’s ACO programs. Encouragingly, these savings are being achieved for both procedural and medical episodes.
How ‘Home-to-Home Time’ Supports the Goals of Bundled Payments
Addressing the tendency of fee-for-service to promote more spending requires changing the metrics that motivate clinician behavior away from volume as a primary focus. The DRG system, an early example of bundled payment, represents an attempt to solve the problem by paying hospitals a set amount for each hospitalization. DRG-based reimbursement incentivizes hospitals to keep costs down by eliminating unnecessary services and by shortening length of stay (LOS). Indeed, in the 30 years following the introduction of the DRG system, average hospital LOS nearly halved, dropping from 10.0 days in 1983 to 5.1 days in 20131,2.
This fix may have had unintended consequences. After adjusting their practices to discharge patients home as soon as it was safe to do so, some hospitals went a step further by transitioning sicker patients to SNFs rather than keeping those patients in-house until they could safely go home. Over the last three decades, the proportion of Medicare patients leaving a hospital who were discharged to a SNF quadrupled from 5% to 20%3,4. This shifting of days from the acute to the post-acute facility setting has several negative consequences: it adds an extra transition, increases the overall time that patients spend in facilities, and increases the cost to Medicare since SNFs are reimbursed by the day whereas hospitals are paid a lump sum for the patient stay. This last point is likely part of the reason that Medicare’s spending per hospital admission on combined inpatient and post-acute facility stays increased by nearly 10% from 2004 to 20115.
Remedy in the News
Remedy continues to be a strong advocate for the BPCI program and using bundled payment models as a path to healthcare transformation.>
CMS proposes changes to CJR: 6 key thoughts on what this means for orthopedic bundled payments
Becker's Spine Review | August 18, 2017
Is HHS’ Proposal to Scale Back Mandatory Bundled Payments a Step Back from Value-Based Care? Many Healthcare Experts Say No
Healthcare Informatics | August 18, 2017
Chris Garcia Named CEO of Remedy Partners
Remedy Partners, the nation’s leading bundled payment company, has named Chris Garcia its chief executive officer, effective July 12, 2017. Remedy is well-positioned for accelerated growth as the healthcare industry continues to adopt bundled payments as a core value-based payment strategy.
According to a Proposed Rule released on August 10, Medicare's next iteration of voluntary bundled payments will be an Advanced APM in 2018, opening the door for robust participation. The Proposed Rule, if implemented in January 2018, would cancel the Mandatory Cardiac Episode Payment Models and make participation voluntary in the Comprehensive Care for Joint Replacement model for half of selected Metropolitan Statistical Areas (MSAs) and for low-volume and rural hospitals.
Reducing avoidable hospital readmissions has been a focus of value-based care. The New England Journal of Medicine found that from 2007 to 2015, risk-adjusted rates of readmission for targeted conditions declined from 21.5% to 17.8%. Given that readmission are stressful for patients and adds significant cost to the healthcare system, providers have been looking for tools that identify when to intervene to attempt to prevent an unnecessary readmission.
Mary Dittrich, Senior Medical Director of Remedy Partners, and Joe Shega, Senior Vice President and National Medical Director of VITAS Healthcare, presented a webinar on July 20 on value-based care near the end of life. In it, they highlighted how palliative care and hospice services improve outcomes and positively impact cost, and they presented practical strategies that providers can use to deliver hospice and palliative care effectively.
Offering Enables Health Plans, TPAs, Self-Funded Plans and State Medicaid Plans to Administer Episode of Care Benefit Plan Designs
White paper co-authored by Shawn Matheson of Remedy Partners and published by Leavitt Partners
Remedy Partners executives will be featured in three sessions during The Seventh National Bundled Payment Summit, a leading forum on healthcare payment reforms, to be held on June 26- 28, 2017 in Arlington, VA.
Remedy Partners latest results show $500 million reduced cost of care and lowered rates of hospital readmission and SNF days
Remedy Partners is proud to be a Bronze sponsor of AHIP - America's Health Insurance Plans Institute & Expo 2017 this year. The event takes place in Austin, Texas on June 7 – 9. AHIP is the premier conference for the health insurance industry.