Risky Business: Teaching Hospitals’ Early Experience With Bundled Reimbursement

Reimbursement: Researchers from the AAMC summarize input from 27 teaching hospitals which were early participants in the US Medicare and Medicaid Bundled Payments for Care Improvement (BCPI) initiative.  Participation has rapidly grown to 21% of all US teaching hospitals, so this experience will be useful to many concerned with graduate and undergraduate education.  Most of the hospitals participated in Model 2 (of 4), in which care episodes are initiated by an index hospitalization and patients are followed to 90 days after discharge.  Medicare calculates a target price for bundled inpatient and post-discharge payment based on the hospital’s historical data.  Over the year or so described in this paper, about half the hospitals experienced gains and half experienced losses.  What were the lessons learned from these experiences? The “primary opportunities for significant total episode cost reductions are in two areas – post-acute care and hospital readmissions,”  with medical episode costs driven by readmissions and surgical episode costs driven by post-acute care, e.g. rehabilitation and skilled nursing facilities.  Certain aspects appeared to this reviewer as potentially-remediable flaws in the program:  inadequate severity adjustment (e.g. lumping major joint replacement for osteoarthritis and pathological fracture) and already-efficient providers having less room for improvement and therefore less ability to absorb the 2-3% planned payment reduction. — Laura Willett, MD

Kivlahan C, Orlowski JM, Pearce J, Walradt J, Baker M, Kirch DG Taking Risk: Early Results From Teaching Hospitals’ Participation in the Center for Medicare and Medicaid Innovation Bundled Payments for Care Improvement Initiative.
Acad Med. 2016 Feb

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