Healthcare News & Insights

Bundled payments: How they’re doing & how to prepare

The Centers for Medicare & Medicaid Services (CMS) will soon require many hospitals to receive bundled payments for total joint replacement surgery. New data from its pilot program shows why this trend will likely continue and expand to other procedures. 

Stethoscope on MoneyCertain hospitals were selected to participate in the Bundled Payment for Care Improvement (BPCI) pilot initiative to test the effectiveness of bundled payments for joint replacement.

The facilities received one payment to cover all care and treatment related to patients’ hip and knee replacements for 90 days. CMS wouldn’t pay extra for treating any complications, including infections and readmissions.

One New York hospital, NYU Langone Medical Center, took part in the BPCI initiative for three years. And according to a recent news release, it’s experienced significant benefits.

Particularly, there were decreases in patients’ overall length of stay in the hospital, lower rates of admission to follow-up care facilities after surgery, and lower readmissions for 30-, 60- and 90-days post surgery.

The average cost for each episode of care for joint replacement surgery went from $34,249 to $27,541 during the pilot program’s three-year duration. Much of the cost decrease was attributed to a reduction in inpatient rehab costs – they went down by an average of over $5,000.

Expanding bundled payments to other patients and procedures may not be far off.

The next step for NYU Langone is to examine how using bundled payments to create a risk factor modification program to avoid surgeries in high-risk patients could affect patient outcomes and the care they receive. Risk factors that may be examined include uncontrolled diabetes, cardiovascular and stroke complications, and neurocognitive and dependency issues, among others.

Getting ready

Because bundled payments are growing more popular, hospitals need to start preparing now so they’ll be ready to provide efficient, cost-effective care for patients.

One way facilities can improve their care of patients who have joint replacement surgery is by increasing the number of nurses they have on staff.

According to a separate study from the University of Pennsylvania School of Nursing’s Center for Health Outcomes and Policy Research, described in a news release from ScienceDaily, patients who receive elective hip and knee surgeries have much better outcomes in hospitals with high staffing levels and positive work environments for nurses.

The study looked at over 112,000 Medicare patients in hospitals across the country. Researchers found that for every additional patient a nurse had to care for, it became 8% more likely that patients would be readmitted within 30 days of surgery.

The most common complication bringing patients back to the hospital was post-surgical infection – a condition that won’t be separately reimbursed with bundled payments.

In addition, patients were 12% less likely to be readmitted after joint replacement surgery if the procedure was performed at a hospital where nurses said they worked in a supportive environment where they had collegial relationships with doctors and had autonomy with their clinical practice.

Working to foster and preserve this type of environment in your hospital now can go a long way toward preventing readmissions and improving the outcomes of patients who receive joint replacement surgery.

And because reimbursement will soon be directly tied to the quality of care your facility provides in this area, it’s important to get the ball rolling ASAP.

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