VOLUME 9 - ISSUE 122
MAY 7, 2019



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



Verma: Trump Administration Mulling Mandatory Payment Models
Centers for Medicare & Medicaid Services Administrator Seema Verma said Thursday that while the Trump administration has focused on voluntary payment models, that is likely to change. During a speech at the National Association of ACOs conference in Baltimore on Thursday, Verma said launching mandatory payment models is crucial to avoid selection effects that can skew data on how well they're working. To date, CMS has launched new voluntary bundled payments, primary care models, updates to accountable care, payment models for drugs and other value-based arrangements. Verma didn't specify in what area the agency was developing new mandatory models. (Fierce Healthcare, April 25, 2019)

Humana Rolls Out Oncology Payment Model

Dive Brief:

  • Humana is launching a national oncology payment model for its Medicare Advantage and commercial customers. Under the new value-based program announced Tuesday, the payer is partnering with physician groups across the U.S. to in an effort to coordinate cost-effective cancer care.
  • The model is Humana's fourth specialty-care payment model. It financially rewards providers for exceeding certain quality benchmarks over a one-year period. Sixteen practices are participating in the inaugural test of the model, which began in January across 11 states.
  • The Louisville, Kentucky-based insurer has sold episode-based MA programs for total hip and knee joint replacements or spinal fusion procedures since 2016 and March 2019, respectively, along with a maternity episode-of-care bundled payment program for commercial members since April 2018.

(Healthcare Dive, April 17, 2019)

UnitedHealthcare Expands MA Bundled Payment Plan Offerings for 2020

Dive Brief:

  • UnitedHealthcare is expanding its bundled payment offerings to providers in its Medicare Advantage plans in more than 30 states, the insurer announced Wednesday. The new program will let providers participate in bundled payments for eight specific procedures, including hip and knee replacements, coronary bypasses and spinal fusions, starting Jan. 1, 2020.
  • The expansion builds on UnitedHealthcare's participation in CMS' Bundled Payments for Care Improvement - Advanced program in traditional fee-for-service Medicare. It will include care management and patient engagement tools, performance analytics and consulting and payment administration services for providers, according to a press release.
  • Of the payer's roughly 5 million enrollees in MA plans, more than 3 million are treated by providers in value-based models. UnitedHealthcare, which contracts directly with more than 1.2 million physicians and 6,500 provider facilities, estimates it will have $75 billion in annual provider reimbursements tied to value-based arrangements by the end of next year.

(Healthcare Dive, April 10, 2019)



CMMI Seeks Feedback on Pay Bundles for Post-Acute Care
The top deputy for the Center for Medicare and Medicaid Innovation told hospital leaders on Monday he is eying a bundled payment model for post-acute care. Innovation Center Director Adam Boehler told the audience at the American Hospital Association's annual meeting that he's seeing a flood of interest from industry, and he called for ideas on how a new approach could save money while improving care. "We've heard a lot of comment there, and I think we are interested in the concept of acute-care bundles," Boehler said. "Now is the time to raise ideas there." After the speech, the CMMI director declined to give a timeline for a prospective model other than there's nothing coming imminently. For now the the agency is in "listen mode," he added. "Post-acute care is an area where we can improve quality and save money," he said. "From that perspective we like it. The devil's in the details on how to set up the models correctly." (Modern Healthcare, April 8, 2019)

Nursing Home Advocates Rally Support for Post-Acute Bundled Payment
Lobbyists for the skilled nursing industry say they're on board as the federal government explores bringing new bundled payment initiatives into post-acute care. A top official with the Center for Medicare and Medicaid Innovation revealed Monday that the agency is taking a hard look at such payment reform -- which would task providers with divvying up a single payment for an entire post-acute episode. Leaders with the two largest skilled care industry trade groups said Tuesday that they're anxious to pursue such payment innovation and are willing to help hash out the details. "LeadingAge not only supports the idea of a post-acute care bundle, we would like to work with CMMI to develop one," Nicole Fallon, VP of health policy and integrated services, told McKnight's. "Potential model leaders should not be limited to hospitals and physicians. Rather, post-acute and other providers of long-term services and supports are well-suited to participate as potential model leaders, and we are eager to design a model that tests our position." "AHCA is a fervent proponent of a thoughtfully crafted, post-acute care-initiated bundle and is actively engaging with CMMI to put forth recommendations for models that reduce cost without compromising quality of care," added Nisha Hammel, senior director of population health management for the American Health Care Association. (McKnight's, April 10, 2019)

Hospital, Doctor Lobbies Support Surprise Billing Protections - But Not Bundled Payments

Dive Brief:

  • UnitedHealthcare is expanding its bundled payment offerings to providers in its Medicare Advantage plans in more than 30 states, the insurer announced Wednesday. The new program will let providers participate in bundled payments for eight specific procedures, including hip and knee replacements, coronary bypasses and spinal fusions, starting Jan. 1, 2020.
  • The expansion builds on UnitedHealthcare's participation in CMS' Bundled Payments for Care Improvement - Advanced program in traditional fee-for-service Medicare. It will include care management and patient engagement tools, performance analytics and consulting and payment administration services for providers, according to a press release.
  • Of the payer's roughly 5 million enrollees in MA plans, more than 3 million are treated by providers in value-based models. UnitedHealthcare, which contracts directly with more than 1.2 million physicians and 6,500 provider facilities, estimates it will have $75 billion in annual provider reimbursements tied to value-based arrangements by the end of next year.

(Healthcare Dive, April 3, 2019)




Excess Administrative Costs Burden the U.S. Health Care System

Anyone interacting with the U.S. health care system is bound to encounter examples of unnecessary administrative complexity -- from filling out duplicative intake forms to transferring medical records between providers to sorting out insurance bills. This administrative complexity, with its associated high costs, is often cited as one reason the United States spends double the amount per capita on health care compared with other high-income countries even though utilization rates are similar. Each year, health care payers and providers in the United States spend about $496 billion on billing and insurance-related (BIR) costs, according to Center for American Progress estimates presented in this issue brief.

As health care costs continue to rise, a logical starting point for potential savings is addressing waste. A 2010 report by the National Academy of Medicine (NAM) estimated that the United States spends about twice as much as necessary on BIR costs. That administrative excess currently amounts to $248 billion annually, according to CAP's calculations. This issue brief provides an overview of administrative expenditures in the U.S. health care system. It first explains the components of administrative costs and then presents estimates of the administrative costs borne by payers and providers. Finally, the issue brief describes how the United States can lower administrative costs through comprehensive reforms and incremental changes to its health care system. Many of the universal health care plans being discussed to expand coverage and lower costs would lower administrative costs through rate regulation, global budgeting, or simplifying the number of payers. Each of these financing changes deserves consideration -- even in the absence of major systemwide reform.

Download this Issue Brief PDF here.

(Center for American Progress, April 8, 2019


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