Bundled Payment in Medicare and Private Insurance: Version 2.0
December 12, 2014
Sally Coberly, PhD & William J. Scanlon, PhD, Senior Consultant
Initiatives undertaken by both Medicare and private insurers have focused new attention on bundled payment as a strategy to reduce health care costs through better-coordinated, high-quality care. In some cases, efforts are moving beyond payments for services delivered by a single provider, such as a hospital, to paying for an episode of care delivered by both acute and post-acute providers. The Center for Medicare and Medicaid Innovation's Bundled Payment for Care Improvement (BPCI) initiative, for example, includes a payment model that bundles both hospital and post-acute care services for episodes involving 48 conditions. Private insurers have expanded beyond bundled payment for surgical episodes to include chronic conditions such as asthma and congestive heart failure. But as past experience shows, bundling payment is not without methodological and operational challenges. Among them are defining the episodes of care on which bundles are based, ensuring that the drive toward efficiency does not result in stinting on patient care, and moving beyond retrospective reconciliation of fee-for-service payments against a target price to true prospective payment. This Forum session reviewed Medicare's BPCI initiative and the Arkansas Health Care Payment Improvement Initiative, which includes both Medicaid and private insurers. Speakers also explored how care processes are being redesigned to reduce costs, especially in the post-acute phase of care.
Sally Coberly, PhD, deputy director of the Forum, gave an introductory presentation.
For more information about the BPCI initiative, see the CMS page "Innovation Models."