The last 30 years & counting — 5 key points on bundled payments

Practice Management

Nearly 30 years ago, Kaiser Permanente, headquartered in Rockville, M.D.,  teamed up with University of California, Los Angeles to launch a bundled payment initiative for kidney transplantation services. Today, commercial payers have also worked with UCLA on its bundled payment initiatives, with healthcare facilities around the nation participating in bundled payments for a variety of specialties.

In Health Affairs, Alan L. Kaplan, MD, Chad Ellimoottil, MD,  and J. Thomas Rosenthal, MD, highlight lessons learned from bundled payments over the past three decades.


Here are five key points:


1. Facilities can utilize bundled payments to enhance care coordination and multidisciplinary care. Because providers share risk in bundled payments, team coordination is of the utmost importance. Failure to work together and provide the optimal care experience may result in reduced reimbursement.


2. Quality improvement will follow bundled payments. In the majority of bundled payments, insurers reimburse providers on quality scores. Facilities are continually striving to improve quality as increased reimbursement will ensue if they meet these requirements.


3. Bundled payment initiatives promote efficient use of healthcare services. Many providers participate in "process mapping," in which they define care pathways, identify waste, and decrease variation in care. They can find ways to limit variation and improve clinical outcomes by getting rid of unnecessary tests.


4. Negotiations may not fare well for bundles. Drs. Kaplan, Ellimoottil and Rosenthal note the duration of a bundle is not as significant as many believe. When looking at the UCLA bundle, bundle pricing was not drastically different for a 60-day bundle versus a 90-day bundle. UCLA and Kaiser Permanente eventually got rid of carve-outs when determining they were not used frequently. When providers are continually negotiating bundles, this could lead to excessive carve-outs and detailed negotiations, thereby limiting the number of eligible patients that make bundle successful.


5. Bundled payments remain an administrative challenge. The transition to value-based care poses an administrative challenge for many providers, who are faced with reporting requirements and complex contracts. Drs. Kaplan, Ellimoottil and Rosenthal note, despite providers using bundles for 30 years, they continue to put an administrative burden on practices.


More articles on practice management:
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Mountain States Medical Group Orthopedics moves to new location in Virginia: 4 points
FDA regulation, insurance coverage: Dr. Raj N. Sureja talks challenges in regenerative medicine

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