Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
November 17, 2015 11:00 PM

How hospitals are prepping for Medicare's mandatory bundled-pay test

Melanie Evans
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Hospitals in dozens of U.S. markets are now cramming for a compulsory test of Medicare payment reform. The hardest part may be that their success relies on the work of partners they aren't used to collaborating with.

    Hospitals in 67 metropolitan areas learned this week they have no choice but to accept a single sum for the cost of care during and 90 days after patients visit the hospital for hip and knee replacement surgery, a strategy known as bundled payments. (See the areas and hospitals included.)

    The mandatory initiative, proposed in June, is widely viewed as evidence of federal officials' impatience with the industry's shift away from charging Medicare for each visit, test and procedure. While many providers have signed up for one or more of several payment reform programs launched under the Affordable Care Act, the Obama administration has expressed an ambition to move much more quickly.

    The new bundled-payment program also clearly signals an expectation by federal officials that hospitals will do more to coordinate care after patients leave, said Robert Mechanic, executive director of the Health Industry Forum at Brandeis University. “It's a push to start to change the culture inside of hospitals,” Mechanic said. “What they do can't stop at the hospital wall.”

    Home-care and post-acute care providers such as skilled-nursing facilities are large expenses for Medicare joint replacement patients, and the cost and quality of that care varies significantly.

    “That's actually where a lot of the significant cost reduction can occur,” said Dr. Michael McKenna, executive vice president and chief medical officer of McLaren Health Care. McLaren's hospital in Flint, Mich., will have to participate in the experiment.

    McLaren and the other hospitals subject to the program will be on the hook to control those costs, and the CMS projects that their efforts in the five-year program will save Medicare $343 million.

    After the CMS unveiled the proposal, hospitals argued that the CMS was making a mistake to make the program mandatory, and that the agency should at least give affected providers another year to prepare for it. The CMS agreed to push the start date back three months to April 1, 2016.

    Hospitals say that still gives them little time to analyze data and coordinate the multiple services related to the joint-replacement surgeries they perform.

    Next month, Catholic Health Initiatives will hold a two-day training session for doctors, managers and other clinical staff from 19 of the system's hospitals that will switch to bundled payments next year, said Tamara Cull, national director of population health for CHI.

    The Englewood, Colo.-based health system has a head start because it already accepts bundled Medicare payments at another dozen of its hospitals that in 2013 volunteered to test the payment model under an earlier CMS initiative called the Bundled Payments for Care Improvement, or BPCI, initiative. Readmissions for joint-replacement patients have dropped by 50% at those hospitals, Cull said.

    For some organizations, the new mandatory bundled-payment initiative has raised questions about how to coordinate planning with existing voluntary efforts such as the BPCI initiative. Some complained it would be unfair to compel them to divide their efforts across multiple incentive programs, but the agency disagreed. The systems already made the business decision to straddle different payment models when they signed up for another program, the CMS said in the final regulations.

    Summa Health System's hospital in Akron, Ohio, which will be among the hospitals in the new mandatory program, already participates in one of Medicare's tests of accountable care, which also rewards participants for cost control and quality performance.

    Summa officials consider accountable care, which includes spending targets for all healthcare services delivered to a group of patients, a more comprehensive strategy than paying for bundles of services related to single procedure, said Ben Sutton, senior vice president of strategy and performance management. Summa considered volunteering for BPCI but instead chose accountable care under the Medicare Shared Savings Program.

    “We view the bundled models as too much akin to the fee-for-service model that we're trying to move away from,” Sutton said. Hospitals continue to be paid for each new hip or knee under bundled payment, but are paid less to for each procedure. That creates an incentive to do more to make up for lost revenue, he said.

    Martha Leclerc, vice president of revenue management for Sanford Health, said the system studied the proposed regulations and is prepared to complete an implementation plan based on the newly published final rule.

    The system's Sanford Medical Center in Bismarck, N.D., will be included in the mandatory test, and Leclerc said the hospital is well-positioned to succeed. “We feel confident our continued work to manage the cost of care and aligning services by building relationships across our community is in sync with what Medicare is trying to achieve.”

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    diversity
    Health equity execs leveraging academic roles to drive long-term change
    Patrick Blair InnovAge
    PACE could expand amid possible nursing home closures: InnovAge CEO
    Most Popular
    1
    Centene to lay off 2,000 workers
    2
    How health systems are battling price-gouging allegations
    3
    Senate advances bill to temporarily aid hospitals, health centers
    4
    Elevance, Blue Cross Louisiana halt $2.5B proposed deal
    5
    Tower Health to sell urgent care centers, close others
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing