Some 1,500 medical care providers are moving forward to accept bundled payments from the Medicare health insurance program for the elderly, but that’s just 25% of those that first expressed interest in a voluntary effort, a new analysis by health research firm Avalere Health shows.
The decrease in participation comes as the Obama administration moves away from costly fee-for-service payments to have half of all Medicare dollars paid to doctors and hospitals via “alternative” reimbursement models including bundled payments by the end of 2018. Voluntary demonstrations were created as part of the Affordable Care Act as a way to coax providers away from fee-for-service medicine based on volume, which can lead to unnecessary and often costly treatment.
Known as the Centers for Medicare & Medicaid Services’ Bundled Payments for Care Improvement Initiative, providers agree to take on financial risk that they can provide the necessary quality medical care for one bundled fee, grouping all of the services involved in an episode.
Hospitals, medical groups and post-acute facilities can pick episodes from 48 clinical conditions such as major joint replacements or “simple pneumonia and respiratory infections.” “On average, each participant is testing episodes for nine unique clinical conditions,” Avalere’s analysis shows.
Since it’s a voluntary program, there’s “good news” because it shows “providers’ willingness to test alternative payment models,” Avalere Health senior vice president Josh Seidman says of the firm’s analysis, which looked at participation as of October 15 of this year.
But as providers take on more responsibility, fewer are staying in the program. “The fact that many providers that entered the program decided it’s not currently in their financial interest to accept downside risk may cause CMS to consider additional mandatory programs in the future,” Seidman said.
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After all, bundled payment is only gaining momentum outside of Medicare so it’s unlikely providers will avoid it going forward. Among commercial insurers, bundled payments are becoming more common with the nation’s largest insurers--
“Since carrots have had only partial success in encouraging providers to enter into risk-bearing bundled payments, [the Centers for Medicare & Medicaid Services] likely will increasingly use sticks to achieve its goals around alternative payment models,” Seidman said. “CMS likely will increasingly use mandatory bundles to hold all providers accountable for all costs associated with long-term episodes of care.”
