Show Coverage: Lay the groundwork for bundled payments

June 17, 2011

Claims systems must be able to manage bundled payments, David Nace, vice president, medical director, McKesson Health Solutions, told AHIP Institute attendees during his Thursday presentation.

Claims systems must be able to manage bundled payments, David Nace, vice president, medical director, McKesson Health Solutions, told AHIP Institute attendees during his Thursday presentation.

Like many healthcare issues, bundled payments are difficult to define.  Nace outlined eight points that should be considered before adopting a bundled model:

  • What services are included and excluded?

  • What is the trigger point-when does the program kick in?

  • What is the starting point-30 days prior to surgery, for example?

  • What is the stopping point-90 days after the date of surgery?

  • Who is included in the provider network?

  • What are the appropriate clinical guidelines to apply to each patient?

  • What are the clinical status indications?

  • What does the compensation model look like-total bundled payment in a lump sum, partial fee-for-service, incentives?

Simplifying matters, Nace said the road to an effective program requires care management, episode initiation, episode resolution and financial and clinical analytics-all incorporating evidence-based medicine.

Nace recommends that organizations move through three phases to successfully create a bundled payment model.

“Look at how claims are triggered,” he said, “and then ensure that the claims system is on top of it. Finally, if the model is a fully bundled payment, who will receive the lump sum for services rendered?”

Be wary. There are always challenges attached, such as physician and hospital engagement, real-time data sharing, building scalability, quality assessment, price transparency and cost-sharing.

Bundled payments often come out in the same breath as accountable care organizations and patient-centered medical homes–both of which Nace said are compatible with the extended reimbursement system.

Bundled payments have been round since the 1980s. It started with diagnosis related groups covering the care incurred by a hospital and the Heart Bypass Center Demonstration in 1987 that assessed the feasibility and cost effectiveness of a negotiated, all-inclusive bundled payment arrangement for coronary artery bypass graft. That has led to the 2010 Senate Finance Committee’s expanded acute care episode model, including post-operative care, he said.