Preparing for and Managing Bundled Payments

The world of medicine constantly changes, but recent years have seen huge shifts in the administrative processes and legal requirements that regulate the healthcare industry. Most recently, the Centers for Medicare and Medicaid Services (CMS) have instituted a new payment model called the Comprehensive Care for Joint Replacement (CJR) model, which rolled out April 1, 2016 and means big changes for hospitals and practices.

The model was built around the results of a pilot program called the Bundled Payment for Care Improvement (BPCI) initiative. Several hospitals were utilized as testing grounds for the bundled payment mode, and the statistics proved compelling.

Hospitals involved with the program began receiving bundled payments for joint replacement surgeries up to three years ago. These surgeries, hip and knee replacements, were covered by a single payment for all treatment and care throughout a 90-day period—excluding separate payments for any complications, like infections and readmissions.

NYU Langone, a New York Hospital that participated in the program for three full years, found that “implementing bundled payments for total joint replacements resulted in year-over-year improvements in quality of care and patient outcomes while reducing overall costs,” according to an article published on the NYU Langone Medical Center’s website.

Bundled payments, especially with these stipulations, are big news for healthcare organizations, because the expectation is that the quality of care being provided must be improved if the organization hopes to avoid costs that won’t be paid out by Medicare or Medicaid.

According to one ScienceDaily news release, patients who undergo elective hip and knee joint replacement surgeries in hospitals with inadequate nursing staff and poor work environments are more likely to be re-hospitalized. The most common reason for this re-hospitalization was postoperative infections. As bundled payments would not cover these types of costs, hospitals are getting an extra push to reduce the number of these types of incidents in order to keep their bottom line under control.

NYU Langone found that bundled payments pushed them to make some significant changes, which resulted in some major improvements in overall patient care:

  • Hospital stays decreased from 3.58 days to 2.96 days
  • Average post-op readmission numbers dropped by 2 percent for 30 days, almost 5 percent for 60 days, and over 5 percent for 90 days—which are significant drops considering that roughly 700 patients or more receive this type of surgery every year at NYU Langone.
  • Total average cost, over the 90-day period (an episode of care, according to CMS), dropped from $34,249 to $27,541, from year 1 to year 3 of the program

These results have pushed the CMS to institute a permanent program, after some adjustments based on the pilot program’s results. Bundled payments are now a reality for joint replacement surgeries, but it’s not likely they’ll stop there.

In fact, it’s arguable that CMS and other payers might explore applying bundled payments to other elective/routine surgeries where costs and outcomes have been thoroughly studied overtime. For hospitals and practices: now is the time to start preparing.

Hire, train, and encourage nursing staff

Statistics have shown that a strong nursing staff, with a healthy and positive work environment, is necessary to stave off many post-op issues, particularly infection.

Encourage strong relationships within your practice

This will help bolster a positive working experience for support staff and medical personnel. The bundled payments model relies heavily on good communication between staff members to provide the best care possible for patients.

Evaluate weaknesses in your patient care strategy

Start now and take a close look at your post-op statistics, costs, and results. You might be able to identify a weakness in your overall patient care strategy that can be resolved to work better in the bundled payment model environment—providing better care and preventing your organization from hemorrhaging funds.

Ultimately, all practices and hospitals want the same results: high quality care and efficient spending. The bundled care models are designed to motivate hospitals to adjust their treatment plans—ultimately benefitting both patients and healthcare professionals. Change is hard, but as the hospitals involved in the bundled payment initiative learned, a little motivation can sometimes provide excellent results for patient care outcomes.

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