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4 Ways to Excel at Bundled Payments

4 Ways To Excel At Bundled Payments

Come April 1, nearly 800 hospitals nationwide will be required by the Centers for Medicare & Medicaid Services (CMS) to test bundled payments under the Comprehensive Care for Joint Replacement program. Bundled payments refers to lumping together services provided by two or more providers during a single episode of care or over a specific period of time. This ground-breaking program, while essentially a experiment, will ideally serve to increase the quality of care by decreasing fragmented care and improving coordination, communication and use of technology among providers. This can be viewed as another landmark step towards implementing value-based care in the United States.

Bundling payments may give you pause. But this mandatory “test drive” of the methodology is signaling to many industry experts that they may no longer be an option in the future; they just may become the standard by which providers bill their patients. If that’s the case, or you’re considering bundling your payments in general, here are a few ways you can incorporate them the right way into your billing process.

#1. Track & Analyze Data

Bundled payments are considered risk-contracting. That is, the healthcare provider will shoulder the responsibility if the costs exceed the bundled payment, i.e. they won’t be reimbursed. Therefore, it is best for both physicians and hospitals to closely measure and track the outcomes and costs of every patient’s course of care. The more accurate and relevant the data, the better your organization’s ability to improve quality of care and costs will be. Consider adopting software that tracks this data or hiring out a vendor to monitor it for you.

#2. Closely Assess Patients

The hospitals that excel at bundling payments are those that pre-operatively assign a risk factor to their patients. For example, by assessing a patient as low, medium or high-risk based on clinical factors that influence the outcome of the operation as well as social or psychological circumstances that influence post-operative care, a hospital can proactively set expectations about discharge and develop the best plan possible for the patient based on their circumstances. Discharging patients to home health care when appropriate can potentially cut significant costs for hospitals. When done correctly, this helps to not only improve patient outcomes and quality of care but also reduce costs.

#3. Understand Virtual vs. Traditional Bundling

Traditional bundling means that each provider bills for a pre-determined part of the single payment. Virtual bundling, on the other hand, means that the payer may pay physicians and providers independently, but adjust each payment according to negotiated, pre-defined rules so that the total payments don’t exceed the total bundled payment amount. It’s crucial that you know in advance if the payer will be paying via traditional or virtual bundling.

#4. Stay Current on Medical Coding Updates

Many issues can crop up with bundled payments, for instance, when commonly bundled procedures are performed separately. It’s therefore important that you have a central resource for medical codes that allows you to use the appropriate modifiers and amend inappropriate EOBs upon receipt. It’s highly recommended that Medicare payers especially refer to the National Correct Coding Initiative (NCCI), which the CMS updates every quarter along with bundled code edits.


Bundling services and payments can be confusing. However, when implemented correctly, they can align your organization on many levels, which will ultimately lead to better care for patients and reduced costs for you.

 

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