More Bundles of Opportunity and Risk—Are You Ready? by Joseph Tomaino
Last month, CMS released proposed rules for expansion of the bundled payment program for Medicare fee-for-service beneficiaries. This expands the current Comprehensive Care for Joint Replacement (CJR) program implemented earlier this summer in 67 Metropolitan Statistical Areas (MSA) across the country. This expansion proposes inclusion of Myocardial Infarction and Bypass surgery in 98 randomly selected MSAs, and the addition of repair of femur neck and hip fractures in the current 67 MSAs in the CJR program. The projected start date is July, 2017.
Payment of a fixed price will cover Medicare expenses in both acute in-patient care and the 90 day post-discharge period for each episode. The price will be a blend of both hospital-specific and regional claims data that will eventually evolve into strictly regional-based pricing by years 4 and 5 of the program. At the end of each performance year, index hospitals that perform below the target price will receive the savings, and those that exceed the price will need to pay Medicare the difference. Quality measures will play an increasingly important part in adjusting how much of the savings the hospitals will receive.
CMS will continue to allow hospitals to enter into financial arrangements with other organizations and medical providers to incentivize performance. This includes nursing homes and home care agencies, as well as the physicians who manage patients in these settings.
Many participating hospitals in the CJR bundles program have dramatically reduced the use of nursing homes to achieve savings against the target price. This strategy will become increasingly risky as more complex conditions are included in the bundles. Any re-hospitalizations during the 90 day post discharge period challenge the index price performance. Hospitals will need to carefully determine which patients at risk for re-hospitalization would be mitigated with a controlled utilization nursing home stay—this requires strategic partnerships and close sharing of data and coordinated care management.
Those in the New York MSA and who participate in the CJR program will be included in the expansion of the femur/hip fracture bundle, and may end up in the randomly selected cardiac bundle. Regardless of whether you end up in the cardiac bundle, now is the time to prepare for inclusion of more complex medically driven DRG clusters. The surgically driven cluster has been easier to manage by driving down care variation on the acute side, and eliminating skilled nursing home usage on the post-acute side. This strategy will not be enough with medically complex clusters like cardiac.
There are three areas of focus when preparing for medically complex clusters:
- Data-driven analysis of current performance and identification of opportunities for improvement
- Development of intensive cross-continuum care coordination models, including development of limited panels of high performing post-acute providers of skilled nursing and home care
- Roll out of evidence-based pharmacology management programs that go beyond cross-continuum adherence and focus also on appropriateness of therapy
Regardless of whether you are selected for the cardiac bundle, now is the time to begin preparing your organization for performance in these more complex bundle clusters. For more information on how to prepare your health organization, contact Joseph Tomaino, Chief Executive Officer of Grassi Healthcare Advisors, LLC, at firstname.lastname@example.org.