MAY 3, 2012

Welcome to the Bundled Payment Update eNewsletter
This issue is sponsored by Bundled Payment Summit

Bundled Payments for Care Improvement Update
CMS's Center for Medicare & Medicaid Improvement has updated its site announcing new deadlines for the Bundled Payment for Care Improvement initiative. Online applications became available the week of April 30, 2012 and the applications for Models 2 - 4 are now due June 28, 2012. (Center for Medicare & Medicaid Improvement, April 27, 2012)

'Episode-Based Payment' Could Rein in US Oncology Drug Costs
Peter Bach, MD, MAPP of the Memorial Sloan-Kettering Medical Center, keynote speaker at the 2011 Cancer Center Business Summit held in Chicago, Illinois, proposes "episode" payments be developed for oncology. He noted that drug costs are "50% more costly in the United States" due in part to the preference for branded drugs and that the payment system has "...made the doctor a drug dealer; he or she buys from one source and sells the drug to another source and that results in a profit." (OncLive, May 1, 2012)

The Problem with Obamacare's Bundled Payments Initiative
Offering quite the opposite viewpoint from the previous story, Scott Gottlieb, MD, a senior fellow at the American Enterprise Institute, questions the logic of lumping technology costs with physician's services. "[I]f a physician chooses to use newer but pricier drugs to treat a cancer, for example, then the cost of the medicines will come out of the doctors' bottom line." Rather than encouraging physicians to be frugal, Gottlieb fears that such incentives or penalties will lead to degradation in patient care such as what he claims happened the first year the dialysis bundle was in place. (The American, April 18, 2012)

Should Emergency Medicine be Carved Out of Payment Reform?
This blog post by Myles Riner, MD, raises important and vexing questions about the propriety of incentivizing emergency physicians through conventional pay-for-performance and risk-sharing models. In addition to spotlighting the more obvious questions of considering treatment alternatives in a thoughtful, unhurried manner while a life hangs in the balance, Riner also raises the difficult question of the attribution of emergency patients to emergency physicians for accountability purposes (quality measurement and incentive management). More on this topic can be found in Riner's blog. (The Central Line, April 22, 2102.)

Costs of Many Preventive Medical Exams Vary as Much as 700%
This USA Today story highlights the recurring theme of variability. As the amount of information on the sometimes vast differences in the what is charged for similar services increases, pressure will mount from patients and payers for both total prices to be clear and for bundled estimates or price commitments to be available. (USA Today, April 6, 2012)

Internal Medicine Specialists Release Policy Paper: Reforming Medicare in the Age of Deficit Reduction
The American College of Physicians released a policy paper on Medicare reforms and the many delivery system models being explored, including bundled payments, ACOs, etc. The paper offers reasonable recommendations on methods for ensuring Medicare's long-term solvency. This link is to the ACP's release on the Paper and leads to both the ACP's brief on the report and the PDF report itself (37 pages). (American College of Physicians, April, 2012)

Updated Measures Assess Heart Failure Care
The Journal of the American College of Cardiology published on April 23, 2012 a measure set for the treatment of heart failure patients on both an inpatient and outpatient basis. These measures are seen as important tools for managing heart failure patients particularly through the critical transitions of care. (Family Practice News, April 25, 2012)

Case Study in Bundled Payments: The Baptist Health System Experience

Baptist Health System in San Antonio, TX is a participant in the CMS ACE (Acute Care Episode) demonstration pilot which Bundled payments" for aligned payments in select hospitals and physicians certain cardiac and orthopedic diagnosis-related group (DRGs). Baptist's experience is outlined in this publication.

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The Importance of Data & Analytics in a Bundled Payment Approach

Bob Kelley
Senior Vice President, Center for Healthcare Analytics, Thomson Reuters