Mandatory Bundled Payments Are Returning, Says HHS Secretary

WASHINGTON, DC — Bundled payment models are going to be made mandatory again, according Health and Human Services (HHS) Secretary Alex Azar.

Provisions for bundled payments were included in the Affordable Care Act (ACA) and were mandated by the Centers for Medicare and Medicaid Services (CMS) for a number of conditions, including acute myocardial infarction and coronary artery bypass grafting, but were cancelled or scaled back in 2017 by then-HHS Secretary Tom Price, MD.

In a November 8 speech at the Patient-Centered Primary Care Collaborative‘s (PCPCC) Annual Conference, Azar signaled their imminent return.

“Real experimentation with episodic bundles requires a willingness to try mandatory models,” said Azar. “We know they are the most effective way to know whether these bundles can successfully save money and improve quality.”

Bundled payments, also called episode-based payment models, are designed to provide a set amount of compensation to organizations and clinicians for a given episode of care to incentivize better coordinated care that prevents unnecessary or duplicative services.

Voluntary bundled payment trial programs from CMS are ongoing, including Bundled Payments for Care Improvement (BPCI) Advanced, which started on October 1. According to CMS, about 1300 providers have already signed up to BPCI Advanced, which provides episode-based payments for 29 inpatient and three outpatient clinical episodes.

In an interview with | Medscape Cardiology, Karen Joynt Maddox, MD, MPH, Washington University School of Medicine, St. Louis, asserted that making bundled payments mandatory is the way to go.

“I think if we’re serious about trying to rethink how we deliver care in a more coordinated way across settings, this mandatory model is certainly a stronger incentive to start to change things than a voluntary model,” she said.

Potential downsides include imposing alternative payment models that might not be ready for prime time and overwhelming already struggling systems.

“But fundamentally, if we want to think about hospitalizations as part of a continuum of care, as opposed to hospitalizations being disconnected from postacute care, nursing home care, and all that, this is certainly a way to start to put that together and try to spend less but also improve outcomes,” Joynt Maddox said.

Episode-based alternative payment models have received mixed reviews, with studies to date showing good cost savings, only moderate cost savings, and no cost savings.

Joynt Maddox, a cardiologist and health system researcher, was lead author on the study showing no cost savings. She proposed that her research, rather than indicating the models should be abandoned, provides evidence that patience and adjustment will be needed, particularly for hospitals with fewer resources.

“It may be unrealistic to think that hospitals can take on financial risk right away, and may be unrealistic to think that things are going to change right away, but I think we are seeing that the bundled payments approach among hospitals that are participating is really starting to incentivize coordination and cooperation, which is a good thing.”

There is also reasonable evidence that the hospitals that have volunteered to test the bundled payment models are not nationally representative, in that they are primarily larger, higher-volume centers. This could make a large-scale, mandatory roll-out potentially messy, according to the researchers.

“That study is an argument for the mandatory bundles, in that if you really want to incentivize change, it’s going to have to be not only among the willing, but also among a broader group of hospitals or health systems that might not sign up for voluntary change,” said Joynt Maddox.

Azar signaled his clear intent to restart the bundled payment programs as mandatory in prepared comments released to the press before the speech.

“We intend to revisit some of the episodic cardiac models that we pulled back and are actively exploring new and improved episode-based models in other areas, including radiation oncology,” he said.

“We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement model.

These comments were further supported by several tweets from Azar, but when a request was made to CMS for details on how the mandatory model will be rolled out, none were forthcoming.

Joynt Maddox does contract work with the US Department of Health and Human Services.

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