Skip to main content

How Bundled Payments Can Affect Your Medical Practice?

December 17, 2015

Bundled payments – an overview

Bundling_and_medical_billing.jpgAccording to the fact sheet prepared by the CMS, the Bundled Payments for Care Initiative (BPCI) consists of four distinct yet broadly-defined care models which result in bundling payments for multiple services for patients incurred during a single care episode, such as a surgery. Organizations, including medical practices, agree to payment arrangements which include outcome performance and financial accountability for that episode. The intended outcome is for improved coordination and therefore a better quality of patient care.The new models differ from traditional fee-for-service separate payments made to multiple providers involved in treatment for a single illness or condition, and which usually resulted in care that was fragmented from poor coordination between providers and settings. The fee-for-service system also rewarded the quantity of care, rather than its quality.  

More payers and complexities seen in bundling

Bundled payments aren’t new, as many surgeons can attest. What is changing, reports Peter Hussey of the RAND Corporation, a non-profit think tank, is the broader inclusion of bundled payments initiatives: larger bundles, as well as expanding to include a longer time period of care. These factors, as well as the increasing number of participating payers all serve to increase the complexity of bundling.

When Vanderbilt University was selected to participate in the CMS initiative, for example, it agreed to participate in the second of the four payment models, which meant that Vanderbilt’s health system would keep any savings accrued from keeping costs below the previously-determined bundle amount by CMS for a care episode, while paying the difference to CMS if it exceeded the pre-set amount. Unlike some organizations, Vanderbilt took responsibility for any owed payments, assuring individual providers that they would not be at increased financial risk if costs went over the CMS amount.

Is bundling riskier for individual medical practices?

For many smaller medical practices, the answer is probably yes, at least for those practices unwilling or unable to manage their care processes. Most small to medium providers aren’t well-equipped to handle bundled claims, nor can they assume any increased risk. For those providers who are able to focus on cost and care controls, there is an opportunity for significant revenue increases.

These providers may want to begin with using shared savings plans among each other while working to improve inter-provider coordination of care sufficiently to move closer to bundled payments.

Consider the examples of some orthopedic surgery practices which have experienced success in bundled payments by utilizing the following protocols:

  • The successful practices used transparency in price, care quality and outcome: this requires the utmost attention to each segment of the entire care process by the surgeon, who acts as a sort of general contractor for the other providers’ services, from the implant to the ambulatory center specialists.
  • Successful providers take advantage of volume aggregation, by participation in Special Group Purchasing Organizations (GPOs) to find the best pricing for hardware and supplies, often with huge discounts through volume purchasing.
  • Partnering with commercial entities, such as GPOs, enables participants to access state-of-the art software for decision-making, negotiating payer agreements as well as profitable management of bundles and pricing advantages on many of the more expensive elements of a case.

How Will Obamacare Affect Reimbursement Rates for Medical Practices

For many smaller practices, attempting to deal with bundled claims can be frustrating and confusing. Smart providers are turning to experienced professional medical claims and billing services such as M-Scribe Technologies for guidance in managing bundled charges and payments to avoid breaks in revenue. A leader in the medical billing and services industry, M-Scribe has helped practices of all sizes with their coding, billing, and compliance needs since 1999. Contact us today for a confidential consultation to learn what our experienced and dedicated staff can do for your practice.


Get the Latest RCM News Delivered

Receive practical tips on medical billing and breaking news on RCM in your inbox.

Get in Touch