Healthcare News & Insights

Big changes to bundled payments: What to expect next

The feds have changed their strategy for the implementation of bundled payments, giving facilities much more leeway in participating. While some hospitals may be breathing a sigh of relief, rest assured – they aren’t going away entirely. Neither is the growing shift toward value-based care. 

Last month, the Centers for Medicare and Medicaid Services (CMS) made a big announcement about the future of bundled payments.

At the beginning of 2018, two types of bundled payment models were set to become mandatory: Episode Payment Models and the Cardiac Rehabilitation incentive payment model. The models were designed to boost value and save costs for heart and orthopedic care.

However, in a proposed rule published on the Federal Register, CMS cancelled both programs entirely.

Per a press release about the decision, the agency said it made this move to have “greater flexibility to design and test innovations that will improve quality and care coordination” in health care. CMS also said it wants to reduce the burden on hospitals that such a change may create – and it’s seeking feedback from facilities and other stakeholders on how to proceed going forward.

Along with the cancellation of these new programs, CMS is also scaling back an existing bundled payment program: the Comprehensive Care for Joint Replacement model.

Currently, 67 geographic areas must participate in the program. However, with the proposed rule, CMS wants to cut this back to 34. The remaining 33 areas could still take part in the program on a voluntary basis. And in all areas, any rural or low-volume hospitals could opt out of participation entirely.

CMS is taking comments on its proposed rule until Oct. 16. A final rule will be published shortly after.

Next steps for bundling

Members of the current administration have voiced their displeasure over mandatory bundled payment models in the past. In fact, the Department of Health & Human Services Secretary, Dr. Tom Price, expressed his opposition to forcing facilities to participate in these programs when they were first proposed under former-President Obama.

Despite these major changes, bundled payments will still exist in some form. But CMS wants to emphasize voluntary participation in future payment models. Experts say the agency will likely have new models in place by the end of the year.

According to an article from Healthcare Finance News, although replacement models haven’t been announced just yet, the newest bundled payment models will likely focus on outpatient care.

They may even take inspiration from physician-based initiatives headed by commercial payors, which would change the current care dynamic. If more responsibility for patient outcomes shifts toward physicians, they’ll be more selective about the hospitals they choose to work with – which means facilities will have greater incentive to provide high-value care.

For now, the cancellation of mandatory bundled payment programs gives hospitals longer to shore up their existing value-based care initiatives. Doing so will be essential to preparing for this shift.

Facilities that feel prepared for voluntary bundled payment programs should consider participating once further details are announced – as they’ll likely be rewarded for their efforts with improved patient outcomes and significant cost savings.

Subscribe Today

Get the latest and greatest healthcare news and insights delivered to your inbox.