OCTOBER 17, 2019

Welcome to the Bundled Payment Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
the National Medical Home Summit, and the National MACRA MIPS/APM Summit

Insurers Test New Way To Cut Maternity Care Costs: Bundling
The thrill of delivering newborns helped pull Dr. Jack Feltz into the field of obstetrics and gynecology. More than 30 years later, he still enjoys treating patients, he said. But now, Feltz is also working to change the way doctors are paid for maternity care. Feltz's New Jersey-based practice, Lifeline Medical Associates, recently partnered with the insurer UnitedHealthcare to test a new payment model. The insurer sets a budget with the practice to pay doctors one lump sum for prenatal services, delivery and 60 days of care afterward. If the costs come in below that amount, the medical practice gets to keep some of the savings. (Hospitals aren't a part of this contract; the insurer pays them separately for their services.) "We've always been taught to take care of patients as if they were our mothers and our daughters," said Feltz, who also leads a coalition of obstetricians called the U.S. Women's Health Alliance that advocates for high-quality, affordable care. "But now we have to take care of our patients as if they were our mothers and our daughters, and as if it was our money." This new program, announced in May, is a first step by the insurer to bundle physician payments for maternity care into a single flat fee that covers all care and procedures. A handful of insurers and state Medicaid programs are experimenting with similar models, sometimes incorporating hospitals and other health providers as well. (Kaiser Health News, September 27, 2019)

Validated Risk-Stratification System for Prediction of Early Adverse Events Following Open Reduction and Internal Fixation of Closed Ankle Fractures


Background: As orthopaedic surgery moves toward bundled payments, there is growing interest in identifying patients at high risk of early postoperative adverse events. The purpose of this study was to develop and validate a risk-stratification system for the occurrence of early adverse events among patients treated with open reduction and internal fixation (ORIF) for a closed fracture of the ankle.

Methods: Patients undergoing ORIF for a closed ankle fracture during the period of 2006 to 2017, as documented by the American College of Surgeons National Surgical Quality Improvement Program, were identified. For the 60% of patients randomly selected as the development cohort, multivariate Cox proportional hazards modeling was used to identify factors that were independently associated with the occurrence of adverse events (including events such as reoperation, surgical site infection, and pulmonary embolism). On the basis of these results, a nomogram analysis was used to generate a point-based risk-stratification system. To evaluate the validity of the point-based system, the system was applied to the remaining 40% of patients constituting the validation cohort and tested for its ability to predict adverse events.

Results: Of the 7,582 patients in the development cohort, 455 developed an adverse event (estimated adverse event risk of 6%). On the basis of Cox proportional-hazards regression, patients were assigned points for each of the following significant risk factors: +1 point for age of 40 to 59 years, +3 points for age of 60 to 79 years, +5 points for age of =80 years, +1 point for female sex, +2 points for chronic obstructive pulmonary disease (COPD), +2 points for insulin-dependent diabetes, +3 points for anemia, and +4 points for end-stage renal disease. The validation cohort included 5,263 patients. Among this second cohort, the risk-stratification system predicted the risk of early adverse events (p < 0.001; Harrell C = 0.697).

Conclusions: The occurrence of early adverse events following ORIF for closed ankle fractures was associated with greater age, female sex, COPD, insulin-dependent diabetes, anemia, and end-stage renal disease. We present and validate a simple point-based risk-stratification system to predict the risk of early adverse events.

(The Journal of Bone & Joint Surgery, October 2, 2019)

7 Keys to Engaging Physicians for Success Under BPCI-A
The Centers for Medicare & Medicaid Services (CMS) launched the Bundled Payments for Care Improvement Advanced (BPCI-A) model in October 2018, and the program's second cohort of voluntary participants will start this January. Although it is important to master the details of the new program, finance leaders need to keep their eyes on the basics. To succeed in BPCI-A, participants must heighten efforts to control episode costs, ensure care quality and manage the entire continuum of care, from patients' initial care encounters through post-acute care. Achieving these goals requires physician engagement, fostered by strong physician leaders. Simply put, it requires a clear understanding of physicians' priorities and the design of physician-led management structures. Following are seven strategic steps for cultivating physician engagement in BPCI-A.

  1. Seize new physician incentive opportunities
  2. Involve physicians at key levels of program governance
  3. Provide physicians with valid, actionable data
  4. Empower physicians to select or design clinical protocols
  5. Ensure physicians understand the importance of accurate documentation
  6. Use physician scorecards to root out variation
  7. Let physicians manage physicians

The common denominator of all the strategic steps described here is involvement. At all levels of decision-making for BPCI-A, there is no problem too small or too complicated to justify not involving physicians. The ability to vote, be a part of the process and own the results will build tremendous satisfaction among physicians involved in a BPCI-A initiative. It also will create an environment of transparency that fosters trust and collegiality between physicians and administrative leaders. In short, involving physicians deeply in program leadership is the best way to ensure they are fully engaged in efforts to improve quality, costs and patient outcomes. (hfm, October 1, 2019)

RWJBarnabas Health CFO Focuses on Strategy in Industry Under 'Economic Siege'
Robert Wood Johnson Health System and Barnabas Health merged in 2016 to create RWJBarnabas Health, the largest healthcare system in New Jersey. In 2020, Executive Vice President and CFO John Doll will continue to focus on executing a strategy to transform the organization. Mr. Doll said RWJBarnabas Health has several big projects in the works for next year: kicking off the move to the Epic IT platform, integrating its medical group and building out its population health infrastructure -- to name just a few. In 2020 and beyond, Mr. Doll and his team will also be focused on ways to offset pressures health systems across the nation are facing, including increases in costs from labor shortages and escalating medical supply and pharmaceutical costs. Here, Mr. Doll shares his top priorities for the year head, discusses industry headwinds and shares his top piece of advice for other health system CFOs. (Becker's Hospital CFO Report, October 8, 2019)

New Medicare Rule Is a Step Forward on Price Transparency, But More Is Needed
In July, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to implement President Trump's executive order aimed at creating meaningful medical price transparency. The public comment period on the CMS rule ended in September. Unlike the disclosure requirement that took effect on Jan. 1, 2019, this new requirement promises to be useful to consumers because it requires hospitals to disclose their negotiated (real) prices for bundled procedure-based services with plain English descriptions. By contrast, the rule that took effect in January required hospitals to disclose their largely fictitious charge description masters, or CDMs, which contain grossly excessive prices that are worthless for determining the real price of care because they are paid by fewer than 5 percent of patients. Moreover, CDMs are not organized by procedures; they contain a long list of every individual good and service identified with medical billing codes. CDMs are useless to patients. The disclosure of negotiated prices, however, can be very useful to patients -- especially when disclosed for clearly identified bundles of care related to common procedures. Negotiated prices are the prices that hospitals agree to accept as full payment from commercial insurers in their network. In other words, these are real prices, the amounts hospitals actually are paid for their services. (The Hill, October 3, 2019)

Oncology Centers Say CMS Payment Model Would Discourage Use of New Technology
Oncology centers say a Trump administration proposal to bundle Medicare payments for radiation therapy will discourage providers from using new technology. Comments on the proposed five-year model from the Centers for Medicare & Medicaid Services (CMS) ended Monday. Several organizations said the proposed model would severely cut payments for a new type of radiation treatment. The proposed payment model would pay a physician or radiation therapy center for select services over a 90-day period. The payment wouldn't cover the total cost of all care provided to the beneficiary, but rather cover only select services such as dose planning, CT simulations and treatment aids. The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go. The goal of the mandatory model is to address perverse incentives for providers to select a treatment plan for a patient that includes a high volume of services, even if they are not medically necessary, according to the proposed rule released in July. This structure may incentivize providers and suppliers to furnish longer courses of (radiation therapy) because they are paid more for furnishing more services," the rule said. "Importantly, however, the latest clinical evidence suggests that shorter courses of (radiation therapy) for certain types of cancer would be equally effective and could improve the patient experience, potentially reduce costs for the Medicare program and lead to reductions in beneficiary cost-sharing." (FierceHealthcare, September 16, 2019)

The Future of Value-Based Care: 2019 Survey Results

The U.S. healthcare industry continues to inch toward value-based care and away from fee-from-service. Over the past eight years, the number of U.S. states and territories that have implemented VBC programs has spiked - rising from three states in 2011 to 48 as of 2018.

To stay abreast of this movement, in the month of August, Definitive Healthcare polled 1,090 healthcare leaders across the provider, biotech, financial services, staffing, life sciences, IT, and consulting verticals to determine predictions for the future of the value-based care landscape in 2019 and beyond. With 791 total responses, these healthcare leaders helped identify:

  1. The biggest barriers when moving toward a value-based care system
  2. Factors accelerating the adoption of value-based programs
  3. Benefits of value-based care programs
  4. How the value-based care landscape will shift in 2020

Read on to learn more about the results of Definitive Healthcare's first-annual value-based care trends survey: https://blog.definitivehc.com/value-based-care-2019-survey-results.

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CMS/CMMI Accountable Care, Primary Care, CPC-Plus and Other Primary Care Models Keynote Address

Pauline Lapin, MHS
Director, Seamless Care Models Group, Center for Medicare and Medicaid Innovation, Centers for Medicare and Medicaid Services, Baltimore, MD