In coming months, Medicare must lump together payments for some medical care in a nationwide test of bundled payments. The federal insurer to the nation's mushrooming (and ailing) elderly population has limited experience with such efforts, but a recent look at private insurers' long-standing pay bundles for transplants may offer some useful lessons.
The Government Accountability Office, at the request of Rep. Dave Camp, the Michigan Republican who chairs the House Ways and Means Committee, and other congressmen, reviewed private sector efforts to bundle payment among the five largest U.S. insurers.
Medicare first sought to test bundled pay for certain services—cardiac bypass surgery and outpatient cataract surgery—nearly two decades ago, the report said. The five largest insurers have recently begun to plan or pilot for discrete services such as bariatric surgery or cardiac care, but all had well-established bundled organ and bone marrow transplant programs.
One unidentified insurer reported that costs declined 4% on average for transplant centers that contracted for bundled payment. That's compared with a 15% rise in costs for other transplant providers, the GAO said.
Insurers contract for bundled transplant payment based on quality, available services and other criteria, the GAO reported, and they pay providers lower rates on the assumption contracts will increase traffic for designated transplant centers. Roughly half of transplant centers failed to quality for bundled payment contracts.
Private insurers' transplant bundles include payment for care provided during periods that ranged from one month to one year. Insurers paid hospitals, and hospitals paid other providers who treated patients. Nurse case managers proved critical to coordinating care, participants told the GAO. Insurers also offered patients financial motivation to use transplant centers with bundled contracts.
One significant hurdle to widespread use of bundles, based on similar payments by major insurers' for heart, bone marrow and other similar transplants: Bills cannot be electronically processed. Another major catch: Transplant care can be clearly segmented into a bundle of services for which insurers may contract but that's not the case for all conditions, said those interviewed for the report, including some physician societies.
The Medicare pilot for bundled payment, as required by the 2010 Patient Protection and Affordable Care Act, is scheduled to begin in 2013. Policy-makers hope lump payments will eliminate incentives for unnecessary care under a system that pays providers per procedure.
As CMS prepares for the pilot, a bundled payment project under way since 2009 is seeking to address a more efficient means for hospitals and doctors to bundle bill, HHS said in response to the GAO report. Medicare's recent test of bundled payments, launched in 2009 for heart and orthopedic care, will see to develop an electronic bundled payment system, the HHS said.
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