MARCH 1, 2019

Welcome to the Bundled Payment Update eNewsletter
Editor: Philip L. Ronning
This issue sponsored by the National Bundled Payment Summit,
the National Population Health Colloquium, and the National MACRA Summit.

New Payment Model Will Redesign Medicare Ambulance Services: Five Takeaways
On February 14, 2019, the Centers for Medicare & Medicaid Services (CMS) announced its latest payment innovation model, "Emergency Triage, Treat and Transport" (ET3), which will incentivize reducing costs for the emergency transport and care of Medicare fee-for-service (FFS) beneficiaries by allowing ambulance suppliers to be paid by Medicare for transport not only to emergency departments but also to alternative sites, such as urgent care centers or primary care providers. ET3 will also pay for care provided onsite or through telehealth by qualified health care professionals. CMS expects this model to save money by providing care in lower cost settings, and to provide care more quickly in emergency situations, where even a few minutes can make a significant difference in patient outcomes. The model may also save significant time for first responders, which could increase access to such providers.

Read on for five key takeaways from CMS's announcement in this article. (National Law Review, February 20, 2019)

Survey: Executives Predict Accelerated Shift to Value-based Payments in 2019
According to a recent Lumeris-sponsored survey, forty-six percent of healthcare executives believe their organization's pace of change toward value-based payment is moving quickly or very quickly, up 14 points from Q2 2018. Additionally, sixty-two percent of health systems indicated that they plan to assume additional risk in the next 12 months.

Of these, ACOs (46%), Medicare Advantage (31%), and bundled payments (23%) were common methods for increased risk assumption. The Lumeris-sponsored survey confirms that fee-for-service payments still account for the majority of care delivery, but payments are increasingly tied to value. (HIT Consultant, February 29, 3019)

Secrets of Best Performers: 5 Actionable Health Care Strategies That Create a Competitive Edge
As 2019 takes hold, companies unsatisfied with their health care spend can look to five effective strategies embraced by 2018's best-performing companies to keep their employees healthy and costs low. The best performers eclipse others when it comes to using best-in-class, cost-effective health care benefit strategies. These companies boast a $3,548 per employee per year (PEPY) health care cost advantage compared with high-cost companies, according to the 23rd annual Best Practices in Health Care Employer Survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. In addition, they excel at managing cost trends and plan efficiency in contrast to high-cost companies, which are those with spend above, and efficiency below, the national average.

"The lessons companies can borrow from the best performers are clear. These employers are effectively evolving their health care benefit strategies to enhance employee health and wellbeing while curbing costs," said Julie Stone, managing director of specialty practices and intellectual capital at Willis Towers Watson. "Plan sponsors should continuously look to advance their health care benefit programs. Start by evaluating your current strategy and make changes to capitalize on cutting-edge benefit delivery innovations." Here are five ways best-performing companies are optimizing the value of their health care plan that all employers can put to use:

  1. Ensure quality of care through value-based designs
  2. Emphasize pharmacy strategies to cut overall costs
  3. Incorporate integrated wellbeing into your company values
  4. Empower employees to make informed benefit decisions
  5. Mine your data to ensure health care strategies work

Our research identified 48 companies that qualify as best performers based on their abilities to manage cost trends and efficiency. Best-performing companies (48 survey respondents) exhibited the following two characteristics:

  • Cost trend: Two-year average trend after plan changes (2016/2017 and 2017/2018) that is below the national norm (4.5% in 2018) and two-year average trend before plan changes (2016/2017 and 2017/2018) that is below the national norm (6.1% in 2018)
  • Efficiency: Efficiency in 2017 that is 5% or greater roughly 60th percentile and above

See the Resource Section below for a graphic of the results and the link to the complete survey.

(Wilson Towers Watson, February 19, 2019)

Global 1's Bundled Payment Program Has Saved MCSIG Members More Than 7 Million Dollars
Municipalities Colleges Schools Insurance Group (MCSIG) recently announced it saved more than $7,000,000 through the Global 1 (G1) bundled payment network for surgical procedures. MCSIG provides a variety of healthcare plans to more than 70 school systems and municipalities in California. From January 2015 through December 2018, MCSIG members that reside on California's Central Coast received 485 surgeries through G1's Ambulatory Surgery Center (ASC) bundled payment network. The total savings to MCSIG during this period was $7,121,250. The all-inclusive bundled payment includes the physicians and facility fees for an episode of care. The cases were performed at five ASCs by more than 70 surgeons. The cases involved a wide variety of surgeries including total joint replacement, spine surgery, complex joint repair, hysterectomy, gall bladder removal, tonsillectomy, thyroidectomy, hernia repair, mastectomy, and breast reconstruction. "While the cost savings have been tremendous, the consistently amazing outcomes our members have received over the last four years working with G1 are even better," explained Michael Larsen, Executive Director of MCS "The quality is exceptional, and pricing is near miraculous from what others are charging along the Central Coast." (MarketWatch, February 27, 2019)

CMS Proposes National Medicare Coverage for CAR-T Therapy
The CMS on Friday proposed nationwide Medicare coverage for a rapidly developing and high-cost cancer therapy that leverages a person's immune cells to fight cancer. The proposed decision promises a financial windfall for hospitals offering the treatment, as the bundled payments for covering the therapy and side effects could climb as high as $1.5 million per patient. The proposal also marks another major milestone for the chimeric antigen receptor, or CAR-T cell therapy, less than two years after the U.S. Food and Drug Administration approved two separate treatments by Novartis and Gilead Sciences. It would change current policy that lets local Medicare administrative contractors decide whether to pay for the therapies. The agency's proposal for national coverage determination would require Medicare to pay for CAR-T treatments given in a CMS-approved registry or clinical study. Patients would need to be monitored for at least two years after receiving the treatment so the CMS can flag the types of patients for whom the therapy is effective, potentially leading to Medicare coverage without a registry or clinical trial. (Modern Healthcare, February 15, 2019)

2 Benefits of Bundled Payments in ASCs
Van Nuys-based Southern California Orthopedic Institute CNO Rashel Campos, RN, BSN, works with the organization's clinics and provides operational oversight of its surgery centers. She told Becker's ASC Review about two ways ASCs can benefit from bundled payment models:

  • Patient convenience. "For us, it has been that the patient's able to make one payment. When you have surgery, you have the facility side, the provider side and the anesthesia side the patients have several bills," she said. "This way, they know upfront what they're going to owe. It's arranged and taken care of by one source, and then the payment's dispersed throughout the bundle."
  • Securing contracts. "Working with Global 1, they're able to get contracts with some of the payers. Sometimes, your anaesthesia isn't in contract or someone's not on the contract. This way, the bundled payment comes from Global 1, and we're able to capture the fee for everybody."

    (Becker's ASC Review, February 18, 2019)

  • How U.S. Employers are Controlling Health Care Costs, Focusing on Wellbeing: Best Practices in Health Care Employer Survey
    As the current economic expansion enters its ninth year, employers are increasingly focused on attracting and retaining employees, making health care benefits an important component of the employee value proposition (EVP). When the Willis Towers Watson 23rd Annual Best Practices in Health Care Employer Survey was conducted between May and July 2018, unemployment ranged from 3.8% to 4.0%, according to the Department of Labor. In this currently competitive environment, employers are not only mindful of employees' ability to continue to afford their health plans but also increasingly focused on ways to improve the employee experience by aligning it with their benefit programs.

    (Willis Tower Watson, January 3, 2019)

    Bundled Payment Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as ACOs, patient safety, pay for performance, comparative effectiveness, readmissions, and Medicaid. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

    Advancing Value-based Care with Payment Reform

    Mark McClellan
    Director, Robert J. Margolis Center for Health Policy and Margolis Professor of Business, Medicine and Health Policy, Duke University