While the ACA (Obamacare) and the frustrated efforts to repeal it often grab headlines, there is another quiet, healthcare rollback effort being affected by the Trump administration. The rollback of The Bundled Payments for Care Improvement initiative is likely to have a negative effect on both price and quality of healthcare. More important, it is a troubling indicator of the administration’s lack of interest in looking for practical ways to fix our broken healthcare system.
The Bundled Payments for Care Improvement initiative was one of three “alternative payment models” launched by the Centers for Medicare & Medicaid Services (CMS) in 2013. The idea was to move healthcare into a payment system based on value instead of volume. In a bundled payment model, the government reimburses providers a set amount per patient for one episode of care, such as a knee replacement, rather than paying for every individual service rendered as part of that procedure. The idea was to create a financial incentive for providers to better coordinate care and keep costs down.
By 2018, the plan was for 50 percent of traditional Medicare payments to go through alternative payment models. “Bundled payment” is one of those alternative payment models. And the voluntary pilot program has been successful at increasing the quality of care and has been moderately successful in reducing Medicare/Medicaid spending and patient financial risk. A three-year experiment by the CMS, the Acute Care Episode Demonstration, that included 28 cardiac and nine orthopedic procedures, led to savings of $319 per patient.
Hospitals participating in the initiative are held financially accountable not only for the cost and quality of care provided during the inpatient stay, but also for care provided during the 90 days following inpatient discharge. The goal is to improve the quality of care provided to Medicare beneficiaries while reducing spending for the full episode of care.
Better, longer-term care at lower cost…who wouldn’t want that?
Earlier this year, the Trump administration’s CMS delayed its scheduled expansion of all the bundled payment pilots from July 1 to Oct. 1, 2017, and is also weighing whether to push back implementation of all bundled payment initiatives even further, until 2018 or indefinitely. These programs would be mandatory, and that seems to be the problem.
HHS Secretary Tom Price has staunchly opposed the CMS’s mandatory initiatives. When he served in Congress, he criticized the CMS and called on the Center to “cease all current and future planned mandatory initiatives,” including bundles.
One of those initiatives would encourage the use of cardiac rehabilitation. That model would create new financial incentives for hospitals in 45 geographic areas. Hospitals would receive $25 per rehabilitation service, for up to 11 services, for patients receiving care after a heart attack or bypass surgery. The CMS noted that even though rehab has been shown to reduce the risk of a second heart attack or death, a mere 15 percent of heart attack patients receive such care. Unfortunately, that number is not likely to change, even though a change could save lives.
What can you do? You can tell your representatives that expanding programs which simplify and enhance healthcare pricing and quality is critical. Most important, you can be an informed consumer and send an economic signal to providers by looking for hospitals that are part of the voluntary bundled care pilot programs. Ask questions, if you can, before services are provided about how your local hospital handles pricing for immediate and related longer-term services. Price transparency should be non-negotiable. Keep asking, until you get answers.