New Research Reveals Bundled Payment Program Success

June 13, 2013

A recent study published by Bailit Health Purchasing, has revealed that bundled payment programs are an effective option for organizations interested in an alternative to fee-for-service reimbursement for providers. Bundled payment differs from fee-for-service reimbursement by compensating a provider for all of the services a patient receives during a single hospital stay or during recovery from that stay on the basis of expected costs for an episode of care. Bundled payment initiatives seek to give providers greater incentive to better coordinate care with other providers, thereby reducing unnecessary duplication of services, reducing medical errors, improving patient health, and lowering costs.

Bailit Health Purchasing was commissioned by the Health Care Incentives Improvement Institute to research the viability of 19 active programs that have piloted bundled payment initiatives. Bailit released an initial report in May 2012. Bailit's most recent study, published on May 30, 2013, provides a status update on the 19 active programs and highlights early adopters that have been successful in making bundled payment part of their permanent reimbursement strategy.

Bailit's study, shared on Tuesday at the National Bundled Payment Summit in Washington, DC, highlights two successful case studies that have moved a bundled payment program from a pilot stage to a permanent reimbursement strategy: Blue Cross Blue Shield of North Carolina (BCBSNC) and Horizon Healthcare Services, Inc. (Horizon). The case studies reveal factors that have helped carry BCBSNC and Horizon to successful application of bundled payment.

Proven factors for success in implementing a bundled payment initiative include support from engaged and committed leadership, adequate resources, transparent data sharing, internal capabilities for complex data analysis, and an open mind to new ideas. These concepts and strategies will likely prove useful to other organizations seeking an alternative payment model.

Thoughtful payment reform is key to CMS' Bundled Payments for Care Improvement initiative, CMS' initiative begins this upcoming fall on October 1, 2013. CMS has selected 450 organizations to participate in this initiative, which aims to reward quality and reduce waste, ultimately lowering costs to Medicare. As Bailit's study exposes, bundled payment is a viable alternative to fee-for-service payment.

If you need assistance understanding or negotiating the terms of health care reform initiatives such as bundled payments, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.