There’s a lot of confusion around bundled payment models.
For health services providers, bundled payment programs are a unique way to attempt to develop a more efficient system of providing services for each episode. Essentially, providers agree to take on more patients and are betting on their capabilities to treat their patients effectively to earn additional income.
The idea is rather simple: take some of the financial responsibility of the payers’ shoulders and shift it to the providers. That’s often easier said than done. Many providers are still concerned with the transition to bundled payment models and how they will affect their financial earnings.
In this article, we’ll talk about some of the most common bundled payment problems and present solutions for each of them.
1. Bundling Processes Are Confusing
Switching to a bundle reimbursement system is a significant transition, one that the healthcare industry doesn’t seem to be ready for at the moment. It lacks the infrastructure, data, and reporting functions needed with this new payment model.
When bundled payments were new, the first models didn’t seem to have a significant impact on medical costs. Thus neither the payer nor the providers were keen on investing in infrastructure to design new payment models. As a matter of fact, most medical services that used bundle payments, couldn’t make the bundles in time for the payments.
Things have changed since then. Now, there are options like buying specialized software or outsourcing direct contract marketing and facilitation to companies like Access HealthNet that offer a turnkey solution that assists providers with managing everything from bundled definitions and pricing to timely payment through automated billing. These services can resolve the confusion that keeps providers away from bundled payment programs.
2. Lack of Accurate Reports
Another problem that providers face when it comes to bundled payments is that the price to implement the change is too high and the patient volume too low. That is why most platforms used at the moment by hospitals and health insurance companies are still not suitable for bundled payment models. They can’t handle the complexity and lack of data.
Providers keep to their skepticism regarding this reimbursement system because there’s not enough proof about what’s in it for them or their patients. Health insurance companies should address this need with in-depth reports that show the potential for outcome quality and cost improvement.
3. Stakeholders Don’t Trust Each Other
There’s a history of mistrust between payers and providers. During early negotiations about making the change from fee-for-service to fee-for-value, the former was looking to reduce healthcare costs, while the latter wanted to keep the same pricing if not even raise it. Now, they are suspicious of each other’s motives and unable to find solutions that cater to their needs.Still, stakeholders believe these issues can be addressed if those who purchase their services would be open to making slight changes in their way of processing bundled payments.
Still, stakeholders believe these issues can be addressed if those who purchase their services would be open to making slight changes in their way of processing bundled payments.
4. Lack of Adequate Case Volume
Case volume needs to be significant for payers and providers to justify investing in their current systems to adapt to bundle payment programs(e.g. clinical redesign, automated payment systems).
The best way to keep patient volume high is to focus on finding common conditions among the patient base and limiting exclusions from the bundle.
5. There Are No Mutually Acceptable Risk Management Methods
One of the most controversial issues is defining how extensive a bundle should be. Due to the risk factors associated with this reimbursement model, payers and providers often can’t agree which patients and what services should be included in the definition to keep risks to a minimum.
Companies want the definition to include as many patients as possible, and make the providers responsible for a broad array of services over an extended period. That involves a great responsibility and risk for the providers, namely hospitals and physicians.
This risk can be lowered through mutually acceptable risk management methods that don’t affect the case volume. Such solutions include risk-adjustment payments, provider reinsurance, and stop-loss provisions.
Furthermore, a simpler definition of the bundled payment program will be of help. Complex ones proved to be too narrow to be viable.
6. The Entire Process Lacks Transparency
As you can see, another challenge both parties must face is the lack of transparency. Fortunately, that can be fixed with the help of companies like Access HealthNet. With the help of its stellar customer support and state-of-the-art technology, Access HealthNet can bring businesses and providers together.
Companies get the best value and have the freedom to design their incentives while providers can enjoy an increase in referrals.
Although the bundling payment system is consumer-centric and provides value to the patient, it also brings clear benefits to the providers.
The shift from fee-for-service to fee-for-episode implies some difficulties, for which, in the end, the best solution long-term is a large patient volume. Providers should offer incentives to the patients to steer them in the direction of physicians under bundle payments models.
Under these circumstances, bundling will become a successful pursuit for everyone.