By 2020, nearly 100 percent of Medicare payments will be made through alternative payment models, according to recent studies.
One of those rising models is based on the bundled payments for care improvement (BPCI) initiative, which links payments for the multiple services that beneficiaries receive during an episode of care. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care, leading to higher quality and more coordinated care at a lower cost to Medicare.
Insurance companies negotiate a single global fee, which includes preoperative care, surgery, anesthesia, facility fee, and postoperative care for a set period of time—and the bundle’s owner distributes payment to each area.
“One thing about the bundled payments is, it’s the one alternative payment model that seems to have the most legs at the moment, or at least the most potential to stick,” says Phil Braun, VP and chief counsel for the nonprofit system Central Florida Health (CFH). “I think it’s the beginning of the end of fee-for-service pushing hospitals, physicians, and even post-acute-care providers to work together. That makes it somewhat interesting to see where it’s going.”
According to Braun, to be truly successful, bundled-payment programs require an effective gainsharing model that rewards high-value care delivery and mitigates performance risk within the inpatient and post-acute care settings.
“Bundled payments is the one alternative payment model that seems to have the most legs at the moment, or at least the most potential to stick.”
“It’s an interesting time for healthcare and the beginning of a pretty big overhaul,” Braun says. “There’s a lot of anticipation and this feeling that we are finally starting down this road of alternative payment models.”
While CFH is involved in mandatory bundle for joints, its orthopedic surgeons are not currently partnered in gainsharing. Its push towards BPCI is mainly an effort by its hospital Leesburg Regional Medical Center to reduce the cost of the episode of care.
“It’s certainly in the early stages, but I think it’s bringing the physicians to the table, and we’ve gotten our orthopedic surgeons to talk more about how it’s going to work, even though they haven’t agreed to it yet,” Braun says. “One of the things we have done early on to prepare not just for bundled payments, but for alternative payment models, is we have co-management companies—cardiologists and oncologists—and that’s one of the ways you can work together on the service line and reduce cost and provide better quality.”
One of the challenges, Braun shares, is that BPCI has been a little rushed—something he also hears regularly from others in the industry who are experiencing similar results of orthopedic physicians not yet taking part in gainsharing.
“The first step is to put together a contract and put together metrics and the care model you’re going to use to help reduce cost, but also achieve quality goals. You have to start there and get a contract they can agree to,” he says. “There’s a trust issue and concern they will do a lot of work, and at the end of the day, there’s no guarantee of payment or savings. Then you have to hit the quality metrics they have in place, which are actually usually dated. There’s an uneasiness for them to say they will sign up to help reduce this total bundle cost, and at end of day may not get anything.”
In his sixteen years in the field, Braun has seen a lot of changes in regards to payments. Another of those changes is in the relationship between payers and the government, with Medicare accounting for 70-80 percent of payments today.
That’s one of the reasons Central Florida Health has started a Physician Hospital Organization (PHO) to enter into some Medicare Advantage for shared savings contracts.
“We recently started a PHO in hopes to build on more of an integrated delivery system model working together under one company. We have a very independent medical staff, we don’t employ a lot of doctors—only a handful based on needed services in the community and shortages,” Braun says. “I think that’s exciting because it becomes the new hospital—not just brick and mortar anymore, but more about managing the health of the population. We can only do that together through some type of integrated delivery system.”
CFH is also currently implementing an electric timekeeper model to help with compliance.
“One of the things when you contract with physicians is you really want to be careful how you pay them,” Braun says. “Some of our contracts, we pay for specific services by the hour, and the way to track that is on specific timesheets and doing it manually.”
“Physicians can download an app on their phone and put in their time, and that goes electronically to the reviewer for approval in the organization, so it’s all automated. You get a better time sheet and a more efficient process than the manual system.”
CFH also plans to expand into the ambulatory space as it continues to try and provide increased care to the community.
Braun’s main goal and role with CFH is to ensure it isn’t violating any rules or regulations. But as one of the longest-tenured executives at the health system, he’s also heavily involved with maintaining strong relationships between the physicians and the community and helping to bring everyone together.
In fact, there’s virtually no corner of the organization that his team doesn’t support in some way.
“Our role in the organization is to provide for our customers and make sure we get work done timely. I don’t like to be the reason the deal isn’t going through because contracts aren’t getting signed,” Braun says. “For me, it’s important we’re not known as deal breakers, but more deal makers, and that we keep things moving along.” AHL