Additional Information on the new
Medicare Plan is Provided Below this article.
Some state health care providers leery of new Medicare pay plan
September 1, 2011
http://www.ctmirror.org/story/13758/bundledpayments
WASHINGTON--Medicare officials in Washington
are trying to woo doctors and hospitals to participate in a strategic new pilot
program they hope will save money, improve care, and become a model for the
future.
The week-old project has
already sparked intense debate among Connecticut
health care providers, although few are rushing their applications to Washington just yet. For
now at least, there's perhaps as much hesitation as there is enthusiasm.
At issue is a wide-ranging demonstration project that aims to dramatically
revamp how providers are paid for health care services. It's part of a broader
effort, envisioned by the federal health reform law, to create a more efficient
health care system that rewards good health care outcomes, rather than lots of
appointments, tests and other services.
"Today, Medicare pays for
care the wrong way," Secretary of Health and Human Services Kathleen Sebelius said in a conference call with reporters last
week. "Payments are based on the quantity of care... not the quality of
that care." She noted that the current system can even "punish the
providers that are most successful in getting and keeping their patients
healthy."
That's because Medicare and
private insurers currently reimburse providers under a
"fee-for-service" system; the more tests, procedures, or appointments
a doctor schedules, the more reimbursements he or she gets.
That rewards volume. And
critics say it also fosters fragmented care, where the primary care doctor
doesn't talk to the specialist, and the pharmacist doesn't talk to the home
care nurse. Each provider works in their own silo, without coordinating the
patient's overall needs, leading to duplicative care or misdiagnoses.
As part of an effort to
streamline the payment system, HHS unveiled its new pilot project last week,
which would pay hospitals and doctors for an entire "episode" of
care. Instead of paying different providers for each separate procedure or
test, Medicare would pay one lump sum for treating a patient's illness from
start to finish.
In Washington jargon, it's been dubbed the
"Bundled Payments Initiative." And it sounds good--in theory at
least.
"Physicians and hospitals
have not always had the most equal relationship. This gives them the
opportunity to come together as true partners, for the benefit of the
patient," said Nancy H. Nielsen, a doctor and past president of the
American Medical Association who is now serving as an HHS advisor on health
reform for Medicare and Medicaid Innovation.
But some Connecticut providers see it a little
differently.
"What Medicare is trying to
come up with is a way to incentivize providers to
provide less care," said Vincent G. Capece Jr.,
president and CEO of Middlesex
Hospital.
"There's a sense that
there's over-utilization in the system, so they're trying to wring out some of
that," he said. "Whether the models being proposed will provide the
right incentives is yet to be seen."
But the gamble for providers is
clear. "They want us to propose a payment that's at least 2 or 3 percent
less than what we get paid right now," Capece
said.
The upshot, ideally, is that
the program "gives us the flexibility to work with physicians to make up
that discount by lowering our costs internally," he said. But there's no
guarantee of finding those savings.
For doctors in particular, the
pilot program looks risky at best, and unworkable at
worst. "The proposed bundling approaches that were outlined really aren't
structured in a way that benefits or allows the majority of Connecticut
physicians the opportunity to participate," said Matthew C. Katz,
executive vice president of the Connecticut State Medical Society.
Because the vast majority of
physicians in the state practice in solo or small offices, "the assumption
of risk, whether it's at the front end or back end, is not something they can
do," said Katz. "And when you don't have the data from an integrated
health system, it's virtually impossible to understand what the total cost for
an episode of care will be."
So Connecticut doctors have
been somewhat frustrated and puzzled by the new initiative, he said, because
they aren't even in a position to figure out how much they should or could get
paid if they coordinate with a hospital, pharmacist, and other providers for an
entire swath of care.
The HHS initiative outlines four models that
providers--whether a hospital, group of doctors, or another organization-can
follow to participate in the demonstration project.
Under the Bundled Payment
Initiative, Medicare would link payments for multiple services that patients
get during an "episode of care," such as a hip replacement or heart
bypass surgery. For example, instead of a surgical procedure that results
in multiple claims from a bevy of different providers, an entire team of
providers would be work to provide care that for one lump payment.
If they do that
efficiently--i.e., at a lower cost than under the fee-for-service--the team
gets to share in the savings with the Medicare program. But if they don't, in at least one of the four models, they could end up
getting stuck for the extra costs.
"It's clearly the wave of
the future," said Nielsen. "We've really got to, as a nation, drive the cost of health care down. And we have to
do it in such a way that the quality of care delivered to Medicare
beneficiaries is the same or better."
She said that CMS structured
the program with maximum flexibility to make it appealing to different kinds
and sizes of providers. Even if doctors don't apply themselves, she said, they
will be key players if the hospitals where they're admitted to practice opt to
participate.
"The way we envision
doctors participating is being on equal footing with the hospitals where they
practice and working together to try to improve care," she said.
"We know that there are efficiencies to be had in every hospital in the
country, so if people bring their best efforts to the table in partnership--the
hospital, the nurses, the pharmacist and the doctor--we do believe that not
only will patients benefit but" providers will too.
But the doctors and
administrators at Middlesex
Hospital say it's a big
risk. And they should know.
For the last five years,
they've participated in a similar project, in which they have tried to treat
all their Medicare patients in a more efficient, more coordinated way, while
reducing costs. While they've hit all of Medicare's quality targets, they
haven't been able to reach the savings goals--and thus to reap any of the
shared rewards.
"One of the things we
learned in that program is that again how difficult it is to control
costs," said Dr. Arthur V. McDowell, III, vice president of clinical
affairs at Middlesex.
Still, Capese
said he and other Middlesex officials are weighing whether to apply for the new
pilot program. "The advantage would be that you get to learn quickly and
perhaps get a leg up on the industry," he said.
While it might be easier to sit
back and learn from the mistakes of other providers, "I think you learn
quicker and better when you're learning from your own mistakes," he said.
And if this is the payment model of the future, "we're going to have to
learn to do it, sooner or later."
He said that whether a new
bundled payment system replaces the current fee-for-service model remains an
open question. But what's clear is that payments to providers are going to be
slashed, one way or another.
"We're definitely moving
towards programs that are going to pay providers less," he said.
"What CMS is trying to figure out is, what's the
best way to do that, what's the fairest way."
Katz, for his part, said he
fears the CMS pilot program is more focused on saving money than anything else.
"These models don't seem to address quality as much as cost," he
said. "It's hard to see where the quality achievements really are."
And he said so far, he doesn't
know of any doctors groups, even the larger networks, who are gearing up to
apply.
Even if they opted for one of
the models that offers incentives, he said, "there is still a risk because
doctors will how to figure out how to change their billing, how to change their
practice managing systems," and make other adjustments to the fee
structure. "We've been advising physicians to proceed with caution
News Release
FOR IMMEDIATE RELEASE
August 23, 2011
|
Contact: HHS Press Office
(202) 690-6343
|
Affordable Care Act initiative to
lower costs, help doctors and hospitals coordinate care
The U.S.
Department of Health and Human Services (HHS) today announced a new initiative
to help improve care for patients while they are in the hospital and after they
are discharged. Doctors, hospitals, and other health care providers can now
apply to participate in a new program known as the Bundled Payments for Care
Improvement initiative (Bundled Payments initiative). Made possible by the
Affordable Care Act, it will align payments for services delivered across an
episode of care, such as heart bypass or hip replacement, rather than paying
for services separately. Bundled payments will give doctors and hospitals
new incentives to coordinate care, improve the quality of care and save money
for Medicare.
“Patients don’t get care from just one person – it takes a team,
and this initiative will help ensure the team is working together,” said HHS
Secretary Kathleen Sebelius. “The Bundled
Payments initiative will encourage doctors, nurses and specialists to
coordinate care. It is a key part of our efforts to give patients better
health, better care, and lower costs.”
In Medicare currently, hospitals, physicians and other clinicians
who provide care for beneficiaries bill and are paid
separately for their services. This Centers for Medicare & Medicaid
Services (CMS) initiative will bundle care for a package of services patients
receive to treat a specific medical condition during a single hospital stay and/or
recovery from that stay – this is known as an episode of care. By
bundling payment across providers for multiple services, providers will have a
greater incentive to coordinate and ensure continuity of care across settings,
resulting in better care for patients. Better coordinated care can reduce
unnecessary duplication of services, reduce preventable medical errors, help
patients heal without harm, and lower costs.
The Bundled Payments initiative is being launched by the new Center
for Medicare and Medicaid Innovation (Innovation Center), which was created by
the Affordable Care Act to carry out the critical task of finding new and
better ways to provide and pay for health care to a growing population of
Medicare and Medicaid beneficiaries.
Released today, the Innovation
Center’s Request for
Applications (RFA) outlines four broad approaches to bundled payments.
Providers will have flexibility to determine which episodes of care and which
services will be bundled together. By giving providers the flexibility to
determine which model of bundled payments works best for them, it will be
easier for providers of different sizes and readiness to participate in this
initiative.
“This Bundled Payment initiative responds to the overwhelming calls
from the hospital and physician communities for a flexible approach to patient
care improvement,” said CMS Administrator Donald Berwick, M.D. “All
around the country, many of the leading health care institutions have already
implemented these kinds of projects and seen positive results.”
The Bundled Payments initiative is based on research and previous
demonstration projects that suggest this approach has tremendous potential. For
example, a Medicare heart bypass surgery bundled payment demonstration saved
the program $42.3 million, or roughly 10 percent of expected costs, and saved
patients $7.9 million in coinsurance while improving care and lowering hospital
mortality.
“From a patient perspective, bundled payments make sense. You
want your doctors to collaborate more closely with your physical therapist,
your pharmacist and your family caregivers. But that sort of common sense
practice is hard to achieve without a payment system that supports coordination
over fragmentation and fosters the kinds of relationships we expect our health
care providers to have,” said Dr. Berwick.
Organizations interested in applying to the Bundled Payments for
Care Improvement initiative must submit a Letter of Intent (LOI) no later than
September 22, 2011 for Model 1 and November 4, 2011 for Models 2, 3, and 4. For
more information about the various models and the initiative itself, please see
the Bundled Payments for Care Improvement initiative web site at:
http://www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html.
To view a factsheet on the Bundled
Payments for Care Improvement initiative visit http://www.healthcare.gov/news/factsheets/bundling08232011a.html
Interested parties may obtain answers to specific questions by
e-mailing CMS at: BundledPayments@cms.hhs.gov.
This initiative is part of a broader effort by the Obama Administration to improve health, improve care, and
lower costs. A brief summary of other efforts, including those authorized by
the Affordable Care Act, can be found at: www.HealthCare.gov/news/factsheets/deliverysystem07272011a.html
For more information about the CMS Innovation
Center, please visit: http://www.innovations.cms.gov.
Improving Care
Coordination and Lowering Costs by Bundling Payments
The Affordable Care Act provides a number of new tools and
resources to help improve health care and lower costs for all Americans.
Bundling payment for services that patients receive across a single episode of
care, such as heart bypass surgery or a hip replacement, is one way to
encourage doctors, hospitals and other health care providers to work together
to better coordinate care for patients both when they are in the hospital and
after they are discharged. Such initiatives can help improve health, improve
the quality of care, and lower costs.
The Centers for Medicare & Medicaid Services (CMS) is
working in partnership with providers to develop models of bundling payments
through the Bundled Payments initiative. On August 23, 2011, CMS invited
providers to apply to help test and develop four different models of bundling
payments. Through the Bundled Payments initiative, providers have great
flexibility in selecting conditions to bundle, developing the health care
delivery structure, and determining how payments will be allocated among
participating providers.
Reducing
Fragmented Care
Medicare currently makes separate payments to providers for
the services they furnish to beneficiaries for a single illness or course of
treatment, leading to fragmented care with minimal coordination across
providers and health care settings. Payment is based on how much a
provider does, not how well the provider does in treating the patient.
Under the Bundled Payment initiative, CMS would link payments for multiple
services patients receive during an episode of care. For example, instead
of a surgical procedure generating multiple claims from multiple providers, the
entire team is compensated with a “bundled” payment that provides incentives to
deliver health care services more efficiently while maintaining or improving
quality of care. Providers will have flexibility to determine which episodes
of care and which services would be bundled together.
Research has shown that bundled payments can align
incentives for providers – hospitals, post acute care providers, doctors, and
other practitioners– to partner closely across all specialties and settings
that a patient may encounter to improve the patient’s experience of care during
a hospital stay in an acute care hospital, and during post-discharge recovery.
Models of Care
to Bundle Payments
The Bundled Payments initiative is seeking applications for
four broadly defined models of care. Three models involve a retrospective
bundled payment arrangement, and one model would pay providers
prospectively. By giving providers the flexibility to determine which
model of bundled payments works best for them, it will be easier for providers
of different sizes and readiness to participate in this initiative.
Retrospective Payment Bundling
In these models, CMS and providers would set a target
payment amount for a defined episode of care. Applicants would propose the
target price, which would be set by applying a discount to total costs for a
similar episode of care as determined from historical data. Participants
in these models would be paid for their services under the Original Medicare
fee-for-service (FFS) system, but at a negotiated discount. After the
conclusion of the episode, the total payments would be compared with the target
price. Participating providers may then be able to share in those
savings.
Providers have the flexibility to choose whether to define
an episode of care as:
·
Hospital services provided to a beneficiary during an acute
inpatient stay, where physicians are partners in improving care (Model 1);
·
Hospital, physician, post-acute provider, and other
Medicare-covered services provided during the inpatient stay as well as during
recovery after discharge to the home or another care setting (Model 2); or
·
Hospital, physician, post-acute provider, and other
Medicare-covered services beginning with the initiation of post-acute care
services after discharge from an acute inpatient stay (Model 3).
In models 2 and 3, components of the bundle may include
clinical laboratory services and durable medical equipment.
Prospective Payment Bundling
Under Model 4, CMS would make a single, prospectively
determined bundled payment to the hospital that would encompass all services
furnished during the inpatient stay by the hospital, physicians and other
practitioners. Physicians and other practitioners would submit “no-pay”
claims to Medicare and would be paid by the hospital out of the bundled
payment.
A side-by-side comparison of key features of the four models
is available here.
For Model 1, letters of intent for the initiative are due on
September 22, 2011 and for Models 2, 3 and 4, they are due on November 4.
The extra time for Models 2, 3, and 4 is to allow potential applicants to
complete request forms for historical Medicare claims data that will aid in
developing episode definitions. The program is expected to start on a rolling
basis in 2012.
Proven Results
with Bundled Payments
Both Medicare and private health care providers have shown
that bundling payments improves care for patients, and leads to better health,
better care and lower costs.
·
During the five-year Heart Bypass Center Demonstration
(started in 1986) Medicare saved $42.5 million – or 10 percent – on Coronary
Artery Bypass Graft surgery at participating hospitals in Atlanta,
Columbus, Ann Arbor (Michigan), and Boston, largely through improved hospital
processes and a reduced need for intensive care. Medicare patients saved
$7.9 million in coinsurance payments.
·
Medicare’s three-year cataract surgery demonstration
(started in 1993) was also successful in reducing Medicare spending by $500,000
for approximately 7,000 procedures at sites in Cleveland, Dallas/Fort Worth,
and Phoenix.
·
The fixed price for Coronary Artery Bypass Grafts (CABG)
under Geisinger’s ProvenCare
reduced costs and improved patient care showing that hospital costs dropped 5
percent, average length of stay fell by 0.5 days, and the 30-day readmission
rate fell 44 percent over 18 months for Pennsylvania hospitals in Geisinger’s network.
Better Health,
Better Care, Lower Costs
Bundled payments are just one part of a wide-ranging effort
by the Obama Administration to improve the quality of
health care and lower costs for all Americans, using important new tools
provided by the Affordable Care Act. Accountable Care Organizations (ACOs) are another way that doctors, hospitals and other
health care providers can work together to better coordinate care for patients,
which can help improve health, improve the quality of care, and lower costs.
The National Quality Strategy provides strategic direction
for ensuring progress toward delivery system reforms that reward quality rather
than the volume of services provided. The recently launched Partnership
for Patients is bringing together hospitals, doctors, nurses, pharmacists,
employers, unions, and State and Federal government to keep patients from
getting injured or sicker in the health care system and to improve transitions
between care settings. CMS intends to invest up to $1 billion to help
drive these changes through the Partnership initiative, which it projects will
save Medicare $50 billion over 10 years. And beginning in FY 2013, for the first
time, the Hospital Value-Based Purchasing program authorized by the Affordable
Care Act will pay hospitals’ inpatient acute care services based partially on
care quality, not just on the quantity of the services they provide.
A brief summary of HHS initiatives to improve care,
including information about new initiatives authorized by the Affordable Care
Act, can be found at:
http://www.healthcare.gov/news/factsheets/deliverysystem07272011a.html
Complete article at
….. http://www.healthcare.gov/news/factsheets/bundling08232011a.html