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    Coordinating bundled payments: The first step toward coordinated care

    In the shift away from fee-for-service to coordinated care models, healthcare organizations are reaping benefits by bundling payments for particular episodes of care. While still in the early stages, bundled payments promise to save costs and improve quality, and have already improved communication and collaboration among major players along the continuum of care.

    “Episodes or care [a.k.a. bundles] provide a middle ground between fee-for-service and full capitation that allows for a level of planning, analysis and cross organization comparison that is fair and equitable,” says Graham Hughes, MD, chief medical officer for the SAS Center for Health Analytics and Insights, a provider of analytical software and services headquartered in Cary, North Carolina. “Bundles hold the promise of creating an apples-to-apples comparison for the most common types of care episodes -- and one that allows for competition based on cost and quality standards that can then be compared fairly across institutions.”

    Key to the early success of bundled payment initiatives is the ability to focus on distinct episodes of care, rather than taking on a complete payment system overhaul. The bundled payments for particular episodes of care can be created, in large part, using existing claims data.

    “I once heard episodes of care described as a bite-sized strategy to improve and transform how healthcare is delivered and paid for in the United States,” says Lili Brillstein, director, Episodes of Care, Horizon Blue Cross Blue Shield of New Jersey. “It’s true. You can pick an episode and look at that piece, and begin to understand how one has to transform healthcare to deliver better quality outcomes at a lower cost.”

    The U.S. Centers for Medicare and Medicaid Services’ (CMS) Bundled Payments for Care Improvement initiative (BPCI) defines four financial and performance models for 48 episodes of care. The episodes of care include diagnosis-related groups (DRGs), which allow healthcare organizations to use claims data to estimate a bundled payment. The more distinct the episode of care, the easier it is to correctly estimate a bundled payment.

    While payers have claims data readily available, they may not have the technology infrastructure in place to automatically analyze that data. However, several third-parties can provide that service.
    “If you’re using the best practices in implementing the bundled payment program, including retrospective reconciliations, selecting a ‘quarterback’ for the episode, instituting stop-loss arrangements, using standard definitions of episodes, there are very few challenges,” says Francois de Brantes, MBA, executive director of the Health Care Incentives Improvement Institute in Newtown, Connecticut. “If you’re a payer and want to fully scale a bundled payment program, you need a claims adjudication system that can handle these payments, and that’s a significant challenge for almost all payers.”

    Next: Building the right bundle

    Jamie J. Gooch
    Jamie J. Gooch is an Ohio-based freelance writer. His areas of expertise include several professional industries as well as marketing ...


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