Hospital and behavioral-health company Universal Health Services may drop out of Medicare's voluntary test of bundled payments “until some of the kinks are worked out,” an executive said Friday.
The King of Prussia, Pa.-based company is weighing whether to pull its 25 acute-care hospitals out of the Bundled Payments for Care Improvement Initiative, which included approximately 2,100 acute-care hospitals, medical groups and other facilities as of last August. The news comes roughly one month before Medicare launches its first mandatory test of bundled payments across 67 markets.
Both efforts are central to the CMS' push to increase the number of Medicare agreements that reward hospitals for quality improvement and better cost control. Under bundles, Medicare will pay one amount for all medical care provided for the treatment of a specific condition, including the full length of a hospital stay and sometimes after the patient leaves. Hospitals, doctors and other providers that hold costs below the bundled payment amount can keep the difference.
The voluntary bundled effort, underway since 2013, is testing the payment arrangement for 48 conditions, including stroke, renal failure, heart attack and diabetes. The mandatory effort, which begins April 1, is limited to hip and knee replacements.
As of this month, there are more than 1,500 participants. The CMS said each of them decides whether to stay in the program based on its own business priorities and concerns.
Universal Health Services' enthusiasm for Medicare payment bundles has faded as the company has struggled to get useful data from federal officials, UHS' Chief Financial Officer Steve Filton said in an interview.
The amount and timeliness of the data has been “somewhat insufficient for us to be able to really participate in this in a meaningful way and make meaningful changes,” Filton told analysts as he announced the company's 2015 financial results.
UHS does see continued growth, however, in new payment models and has readied itself for the changes ahead.
Filton said in an interview that UHS may keep some hospitals in the program to monitor its progress.
The company's hospitals saw growing demand and higher margins last year compared with 2014. Total revenue, which also included behavioral health, reached $9.04 billion in 2015, a year-over-year increase of 10.2%. The company's net income increased 24.8% to $680.5 million.