Three concepts to consider for bundled payment success


The path to bundled payment success can be daunting. Here’s three universal concepts that will promote success under the various CMS models.

Value-based payment models around episodes of care are rapidly growing in both the public and private health insurance sectors. Whether it be the various CMS models-The Bundled Payments for Care Improvement (BPCI) initiative, Comprehensive Care for Joint Replacement (CJR), Oncology Care Model (OCM), or the proposed cardiac care/hip and femur fractures model-state-specific Medicaid or multipayer models, or private payer (insurers and employer groups) bundled payment models, there has been a proliferation of a wide variety of episodes and model constructs over the past few years.

In fact, the most recent annual PWC Strategy& Annual Bundles survey stated that bundled payment adoption is at a “critical turning point,” with 31% of healthcare providers and 20% of employer groups surveyed having adoption episodes of care payment models. If you are a provider organization that furnishes significant services as part of episodes of care in your community, you can no longer afford to be without a comprehensive strategy and plan for your organization to participate in these models.

But where to start? Given the disparities between models (whether it be which provider is the “accountable” provider from a quality, outcomes, and cost perspective; the sometimes divergent clinical and financial models that have been developed by payers; or the significant new infrastructure and capabilities required to manage episodes of care effectively, it can appear to be a very daunting and monumental task to move down the path of bundled payment. However, there are three universal concepts that will promote success under these models:

1.   Build a cross-functional team-but know when you need help

The power of bundled payment is in incentivizing the reduction of the variations in quality, cost, and outcomes across a specific episode of care. These variations are generally due to the fragmented nature of care delivered under the traditional fee-for-service payment environment. Success with bundled payment is contingent on several factors, but it begins with a comprehensive and coordinated approach to providing care for the entire episode. Having a cross-functional team dedicated to providing this comprehensive management is vital to drive success. Whether it is a dedicated care coordinator(s) managing each patient’s care from pre-procedure all the way through to the completion of post-acute care (working with all the providers involved in the episode along the way), after hours staff to triage patient issues and direct them to the appropriate setting of care, data and analytics staff to develop and implement tools and reports to help your organization understand the episode patient populations and identify opportunities for improvement, and leadership involvement to help bring it all together, building such a team is the first step.

However, not every organization will be able to develop such a team immediately. The good news is that there are a number of resources available in this space to help. Many conveners under the BPCI model (intermediary organizations allowed for in this model to hold the contract with CMS and/or provide support services to providers engaged in this model) are also offering expertise and support services for other bundled payment models such as CJR that may be more cost-effective than developing it yourself. Private payers are developing robust analytics, reporting, and clinical support capabilities to help providers understand and manage their populations more effectively. Humana, for example, has developed a suite of provider-facing reports dedicated to its total joint replacement bundled payment program in Ohio and Tennessee. Be sure to thoroughly explore what is available to your organization for the episodes you are considering.

Next: Opportunities for success



2.   Know your opportunities for success

While building the team is a critical first step, actionable data and analytics is the name of the game when it comes to showing that team where to focus their efforts. While the specific drivers will vary amongst different episode types, there are almost always areas where quality can be improved and the delivery of care can be made more efficient. As an example, for total joint replacement there are usually opportunities in reducing readmissions/revisions, reducing complications such as deep vein thrombosis or pulmonary embolism, eliminating duplication of services and testing, and selecting the most efficient facilities for care (both acute and post-acute). Giving data to your team that shows at a detailed level where the variations lie and the options for reducing them will allow them to “move the needle” in the right direction.  

3.   Know and work with your partners (clinical, payers and most important of all, patients)

Unless your organization is a large integrated delivery system that provides most (if not all) of the services in your bundle(s), you will need assistance from the other providers involved in the care of your episode patients. It may be sufficient for your organization to identify the high-quality/most efficient providers in your area and develop stronger relationships with them; referring patients to them when appropriate and having your team establish regular and clear lines of communication. You may find it necessary to develop gain sharing or other incentive arrangements with these providers to drive improvements in the services they provide.

Payers can be an important partner in aiding your organization in the bundled payment space. Aside from holding a great amount of the data for your population (and often also using that data to deliver analytics as previously mentioned), payers may offer clinical resources to help coordinate care. And, payers will usually offer interim and final reporting on quality and cost results so your organization can gauge progress.

Lastly, let us not forget that engaging the patient (and family as well) in the active management of his or her care during the episode is also crucial. Having your team work hand in hand with the patient through all phases of care throughout the episode will promote better adherence and follow through on the care plan, increase patient satisfaction, and ultimately help reduce unnecessary and ineffective care.

Like so many other areas of the healthcare sector, bundled payment can appear to be a complex and risky undertaking. However, focusing on these key concepts will help promote success in these models for your organization.


Chip Howard is vice president and payment innovations leader, Humana Inc. He is responsible for advancing Humana’s Accountable Care Continuum by expanding its Provider Reward Programs and payment models and programs that enable providers to become successful population health managers. 

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