Healthcare bundled payments is a payment model that addresses reimbursement between payers and providers per episode of care rather than for a particular medical service, like the ever-popular fee-for-service model. The goal of using this particular payment method is to transition healthcare providers from a fee-for-service model to a value-based medical care model. This reduces some of the financial strain for both patients and providers and helps elevate the quality of care that patients receive.
There are several conditions in which bundled payments may be risky for a provider, such as with high-risk patients with several co-morbidities or complex surgical procedures. Organizations have to recognize the very real pitfalls and limitations of a healthcare bundled payment model, so they may address these concerns and overcome them. However, with knowledge comes the ability to strategize a plan to avoid these potential financial landmines.
What Are the Biggest Challenges Facing Bundled Payments?
One main challenge providers face when considering bundled payments are the factors outside the scope of their control. For instance, additional costs associated with their patient’s treatment could lead to the physician being financially penalized for using a bundled payment system.
Physicians, as much as they may wish otherwise, cannot control their patient’s lifestyle or any risky behaviors that may complicate medical care. Additionally, patients may have various complicating medical conditions that may automatically classify the patient as high risk or complex. Medication adherence, additional medical issues, or new, unexpected side effects are medical situations strictly out of the doctor’s control.
Infrastructure and data reporting issues also complicate a provider’s willingness to fully adopt a bundled payment model. This is a two-fold issue: Outdated payment tools may stand in the way of proper, timely reimbursement and claims submission. Additionally, it may be difficult for organizations to see inefficiencies in reporting and opportunities for growth in patient outcomes without having adequate data reporting tools in place to present this information.
Another challenge is resource underuse. While healthcare overuse is often a pervasive problem among various organizations, especially those using the fee-for-service payment structure, bundled payment models can lead healthcare providers to forego needed treatments or services. There are a few reasons for this concern. Bundled payments are geared towards keeping patients out of the hospital by reducing readmission rates and streamlining treatments. However, lower reimbursement rates for more complex cases can also create a reduction of healthcare access for some patients.
What Solutions Can Payers and Providers Implement?
While the challenges outlined can pose significant problems for providers, there are some very strategic solutions to optimizing bundled payments for better patient outcomes and increased provider revenues. When considering healthcare underuse, it’s important that the bundled payment agreement is designed so that providers can receive an adequate reimbursement while also upholding better patient outcomes as the standard.
By creating the bundle agreement only for evidence-based treatment modalities, providing sufficient compensation for all services and technologies required under those modalities, recognizing and planning for an appropriate clinical time frame and staying abreast to the latest changes in evidence-based treatment, providers can be positioned for success with bundling payments.
It’s vitally important that providers also recognize and plan for clinical outliers to mitigate risk with medically complex patients and procedures. If there are treatments, medications or procedures that are particularly expensive or that will fall out of the logical scope of the bundled payment agreement; it’s a good practice to exclude them from the bundle. Finally, have a plan in place to address high-risk patients and for when the plan of care goes awry. Having a plan in place can help reduce the financial impact of these cases.
How Do Bundled Payments Benefit the Healthcare Industry?
Bundled payments are a benefit to the healthcare industry all around, and most experts agree that the alternative payment model is here to stay. Payers are the ones who truly benefit from a bundled payment model. However, providers can generally experience higher rates of reimbursements and better patient outcomes when they adopt bundled payments.
Bundled payments shift the financial risk from the payer and onto the providers. Providers who adopt the model and work with private and public payers are more likely to see the cost savings. Unnecessary overuse of services may be reduced, and quality of care is likely to improve. Adopting a value-based care environment significantly benefits the quality of patient care and helps relieve some of the more obvious effects of excessive healthcare spending.
While there are several challenges facing providers when it comes to bundled payments, there are also several solutions to common pitfalls of the model. By recognizing the potential danger areas when it comes to alternative payments and creating a well thought out plan for all contingencies, providers can easily position their organizations for success when bundling payments.