The gradual movement from fee-for-service payments to compensation based on the totality of care provided has been water-cooler conversation for hospital-based physicians since long before the term “hospitalists” existed.
As far back as 1983 —13 years before the birth of HM—Medicare created what was then called an “inpatient prospective payment system,” which essentially let Medicare pay a fixed amount for the entirety of a hospital stay, based on diagnosis. Then in 1991, the Centers for Medicare & Medicaid Services (CMS) introduced one payment for coronary artery bypass graft surgery, and even included 90-day readmission in the check.
Fast forward to the past 10 years when accountable care organizations (ACOs) and value-based purchasing (VBP) have been the focus of HM executives looking to take the lead in how to make bundled payments work for them.
The Bundled Payments for Care Improvement (BPCI) initiative was introduced by CMS’s Center for Medicare & Medicaid Innovation (CMMI) in 2011 and is now compiling its first data sets for the next frontier of payments for episodic care.
For rank-and-file hospitalists who have felt inundated by the regulations and promised payment reforms from ACOs and VBPs, why is this program so important?
“The reason this is so special is that it is one of the few CMS programs that allows providers to be in the driver’s seat,” says Kerry Weiner, MD, chief medical officer of acute and post-acute services at TeamHealth-IPC The Hospitalist Company. “They have the opportunity to be accountable and to actually be the designers of reengineering care. The other programs that you just mentioned, like value-based purchasing, largely originate from health systems or the federal government and dictate the principles and the metrics that as a provider you’re going to be evaluated upon.
“This model, the bundled model, gives us the flexibility, scale and brackets of risk that we want to accept and thereby gives us a lot more control over what physicians and physician groups can manage successfully.”
BPCI might be a game-changer for HM because it’s the first of the bundled-payment initiatives that truly falls direct to the care provided by hospitalists. In short, the plan covers 48 defined episodes of care and would parse out payments for those episodes in a holistic—and some say more appropriate—way. Currently, a hospitalist would get paid for a patient’s stay in the hospital and a primary-care physician (PCP) could be paid for some follow-up. If the patient ends up back in the hospital quickly, the hospitalist could get paid again and, upon discharge, a PCP could, too.
But under BPCI, pay would be determined based on the episode of care. The details of who gets paid what and the rules that apply are all likely to evolve, of course, but it’s hoped the basic premise of bundled payments would lower the overall cost of healthcare.
How It Works
Under the Patient Protection and Affordable Care Act (ACA) of 2009, it was mandated that the government establish a five-year pilot program by 2013 that bundled payments for inpatient care, according to the American Hospital Association.
The program has now ramped up to include more than 650 participating organization, not including thousands of physicians that then partner with those groups, over four models. The initiative covers defined episodes of care, both medical and surgical, that begin at the time of inpatient admission and stretch 30, 60 or 90 days post-discharge.
And hospitalists are poised to take the lead on how payment models, especially bundled payments, are shaped over the next few years, says John Nelson, MD, MHM, a co-founder and past president of SHM and and principal in Nelson Flores Hospital Medicine Consultants in Bellevue, Wash. Nelson says his consulting firm has seen an uptick in calls over the past two years dealing with alternative payment models (APMs).