CMS Hospital / Healthcare Bundled Payments
With powerful analytics and predictive modeling, your organization can better manage your patients' total episodic cost for mandatory Medicare bundled payments such as the Comprehensive Care for Joint Replacement (CJR) program.
Your organization will be well positioned to make necessary adjustments with post-acute care (PAC) providers to manage costs against CMS targets in order to earn repayments.
Get started with analytics to support your healthcare bundled payment strategy!
Bundled Episodes of Care: CJR Model
CMS is mandating the Comprehensive Care for Joint Replacement (CJR) Model to support better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements.
This means that hospitals will soon be financially responsible for managing all of CMS expenditures during the episode.
Healthcare providers should prepare now by understanding their market price position by examining benchmark data. PMMC has 100% of the bundled episodic data available that you need to benchmark your organization against CMS targets.
The Impact of Accountable Care Organizations (ACO)
The concept of the Accountable Care Organization (ACO) has become a consistent theme within the healthcare community. Some groups view it as a new means of reimbursement, others view it as a new means of controlling cost, and others view it as a new means of increasing the quality of care. PMMC views it as a combination of the three and a natural extension of its current contract management platform.
Converting Data to Meaningful Information
Early migrators to ACOs must be willing to embrace significant risk management and patient care coordination with top-down and bottom-up commitment from all providers and executives. Coordination and acceptance of standards of care will be critical. Part of the financial risk-management is the recognition that there will be fewer opportunities for cost shifting to other payers; and that hospitals are adding more overhead cost through expanded relationships with physicians. This process begins with upfront modeling / simulations of the proposed contractual reimbursement arrangement and follows with ongoing monitoring of charge/service activity.
Clinical integration will be rewarded if all providers share the same vision of how healthcare services should be delivered. The anticipated shared savings will come from closer management and consistent use of evidence-based processes. In some cases, it will result in not preforming certain items (redundant lab test), preforming new medical related tasks (closer supervision of medications), adhering to standard medical practices (blood infusion protocols, standard implant/prosthetic devices), and socio-economic support services that previously would have been viewed as outside the scope of direct medical care (transportation service for rehab, tighter controls for patient compliance post-discharge). These processes will need to be defined, followed and monitored through a combination of clinical, financial, and patient satisfaction data.
Shared Savings Benchmark Calculations
With many proposed ACO projects, the benchmarks for determining the shared savings are modeled based on a targeted population (i.e. the beneficiaries/patients being retrospectively assigned for savings benchmark modeling purposes). With CMS, the assignment will be based on the total primary care services provided by the primary care physicians in the ACO using total allowed charge data. For a commercial payer, it may be the total charges (hospital and physician) associated with a procedure such as knee replacement. If the total spending (reimbursement for the noted providers and cost for the payer) is less than the shared savings benchmark, then the payer will share the savings with the provider network.
Modeling the Savings
Whether a provider network needs to calculate the target benchmarks for determining when and how much the shared savings will be; it is PMMC’s belief that payers, such as CMS, will provide the aggregate historical patient level data. PMMC’s modeling process is such that it can accept historical data from various sources. Once the modeling process has been completed, spending (cost) associated with the target population must then be tracked for comparison purposes against the agreed upon shared savings benchmark.
Claims & Payment Reconciliation in an ACO World
With the migration to ACOs / bundled payments / shared savings models, PMMC’s Contract Management System is being enhanced to provide several critical components:
- • Modeling historical claims data to determine spending (cost) target levels
- • Account Management (account follow up related to payments accuracy, denials, etc.)
- • Reporting (monitoring billing, expected reimbursement and payments/adjustments)
- • Quantifying and tracking certain quality (cost) measures
- • Calculating spending (cost) as compared to target levels and allocating the shared savings among the ACO participants, providers/suppliers
- • Calculating payment for the ACO provider/supplier claims