5 Things About CMS’ Mandatory Bundled Payment Program that will Cut Costs and Improve Service

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December 9th, 2015
Categories: CEO's Blog

CMS is announcing their first mandatory test of shared-risk, outcomes-based payment models and it’s first initiative to make hospitals financially-responsible for patient recovery, up to 90-days after a knee or hip replacement surgery.

This landmark program, Comprehensive Care for Joint Replacement, will go into effect April 1, 2016. Patient engagement and care coordination technologies will be the keys to helping hospitals meet cost containment requirements while improving services.

"It's up to hospitals and health technology vendors to work together to make the Medicare joint replacement program an example of successful care coordination that can lead to lower costs and increased healthcare quality," said Todd Johnson, CEO of HealthLoop, the largest orthopedic patient engagement platform, in a press statement.

Healthcare institutions and leaders should know five items to move forward into the coordinated care initiative:

  1. 789 hospitals will be impacted.CMS selected hospitals from 67 U.S. geographic regions for the first mandatory program pilot. Institutions were chosen from metro areas like New Yok and Los Angeles and smaller regions like Modesto, CA.
  2. 500,000 patients can participate, annually.The most common inpatient surgery for fee-for-service patients is knee and hip replacement; over 400,000 are performed in the U.S. annually and cost $7 billion for just hospitalization.
  3. Quality matters. Hospitals must adhere to strict quality metrics and keep down care costs from admissions to 90 days after discharge. Underperforming hospitals will face severe cost penalties and can lose the ability to participate in savings gains.
  4. Hospitals can donate $1,000 per Medicare beneficiary for patient engagement IT and services.CJR lifted anti-kickback rules, letting hospitals provide physicians up to $1,000 in IT and patient engagement services during the 90-day recovery period; a $400 million opportunity for patient engagement companies. Medicare will also reimburse telemedicine and waive minimum hospital stay rules.
  5. CMS will provide incentives for Patient Reported Outcomes (PRO). Hospitals that volunteer total joint replacement patient-reported outcomes can improve composite quality scores and participate in physician gain sharing; hospitals must share 50 percent of patients' PRO data or at least 50 patients to earn 2 bonus points.

"As a physician, it's hopeful to see policy changes coming into reality that improve patient recovery and the way we practice medicine," said Kavita Patel, MD, a nonresident senior fellow at the Brookings Institution, in a press statement.

"CJR will support surgeons in focusing on the long-term outcome of patient care, not just the delivery of surgery. This is a big step forward for increasing value and cutting costs equally."