Bundled Payments: Moving from Mandatory to Optional

by Kyle Salem, Ph.D. on Oct 24, 2017

bundled-payments.jpgLast month, the Centers for Medicare & Medicaid Services (CMS) proposed drastically altering participation requirements for several bundled payment programs. The agency recommended curbing mandatory involvement in the Comprehensive Care for Joint Replacement (CJR) Model—suggesting that only 34 geographic areas be required to participate instead of the previously obligated 67. CMS also submitted that the Episode Payment and Cardiac Rehabilitation Incentive payment models, which were due to begin this coming January, be eliminated.  

CMS’s actions reflect the administration’s concern that compulsory bundled payment participation represents too much of a burden for providers, especially for small and rural physician practices. The administration’s hope is that by easing the requirements, it will actually increase involvement in value-based care because organizations will have some flexibility in how they approach new payment opportunities.

From a provider perspective, the proposed changes could be positive. Organizations are now being given more of a choice in how they pursue value-based payment and are not necessarily locked in to participating in bundled payment. So, organizations can take the time and determine which value-based opportunities make the most sense for their patient populations, current resources and strategic objectives. For example, if they were involved in a bundled payment initiative and it was going well, then they may choose to stay in that program. However, if a practice was losing money or struggling to allocate sufficient resources, they may opt for an alternative arrangement, such as one that better aligns with their patient’s needs.

No matter what type of outcomes-driven program an organization chooses to pursue, it should ensure it can provide integrated and coordinated care across the continuum, because this level of collaboration is necessary for successful program participation. There must be an established infrastructure that enables real-time, interactive communication among all members of a patient’s care team. A side benefit of the relaxed bundled payment requirements is that organizations will have more time and resources to create a care coordination framework and be certain the most appropriate care providers are connected. Technology can help in this regard, especially care coordination solutions that allow different providers, family members and community resources to share information, respond to concerning trends and intervene in a patient’s care when necessary.

Even though CMS took aim at bundled payments, the industry’s emphasis on value-based care is still progressing. By loosening the requirements, the administration is encouraging healthcare providers to take a more customized approach to outcomes-driven programs, and organizations that take advantage of this opportunity could proceed further down the path toward new payment models and do it in a way that works best for them.

Meet the Author

Kyle Salem earned his doctorate in biomedical engineering from Case Western Reserve University and has completed the Kellogg Management Institute at the Kellogg School of Management at Northwestern University. Kyle worked for Siemens Medical Solutions MRI Research & Development division, serving as the primary scientist supporting its second 3 Tesla MRI scanner in the U.S. He also managed U.S. R&D Collaborations for MRI for two years. In 2005, Kyle joined Cassling Diagnostic Imaging, where he held a number of roles from strategic sales executive through vice president of Corporate Strategy and Development. It was during this time that he learned about the considerable challenges of managing health care, and was able to focus on how industry could strengthen community health care by lowering cost and increasing quality and efficiency. Kyle is passionate about the future model of care coordination, payment reform and new technologies in health-care delivery.