Medical Billing ServicesRevenue Cycle Management (RCM)

Why You Should Understand the Basics Of Bundled Payment In Healthcare?

Bundled payments sooner rather than later, is likely to become a more common thing in the healthcare industry. Bundled payment policies are being leveraged to incentivize improved care coordination, quality, patient safety, and cost proficiency in a system which is badly in need of developments in these areas.

Bundled Payments Is Catching Up With You !!

Bundled payments are rapidly becoming a collective form of medical reimbursement for services given in the American healthcare system. These methodologies are being utilized by the federal government and specifically the Centers for Medicare & Medicaid Services (CMS), and commercial payers alike. All this is aimed towards improved care coordination, along with ensuring that the physicians do not have to face improper revenue generation.

Presently, the phenomenon of bundled payment also refers to episode rates. These rates are budgets created around a variety of care for a specific patient and for a specific condition. “Episode payments” are then further termed as “case rates.” It is referred so as to establish the payment amount, boundaries with regards to time and the type of services to be included.

For instance, one episode of care/procedure around an acute myocardial infarction would include the admission and successive cardiac rehabilitation and other services up until 30 or even 180 days after discharge. For other episode, rates go back and include the diagnostic services that established the condition. For example, episodes in chronic care, like diabetes, congestive heart failure (CHF), or asthma naturally extend for a full year to coincide with annual health insurance premiums.

Difference Between Episode Payment And Bundled Payment

Episode payments or case rates don’t include bundling all the time. A physician group on its own could be reimbursed for its services on a case rate. But, in today’s parlance, episode rates are frequently combined with bundled payments so that the incentives of the parties are associated with the goals of improved quality and efficiency.

Today, most of the bundled payment programs are centered on procedures such as hip and knee replacements. This is mainly because of the delimited conditions and consequently easier to use as a reference point to learn how to manage these new payment and delivery approaches. This will subsequently also tweak the way your practice conducts its medical billing and coding requirements for reimbursement.

Experts on episode rates and bundled payments, however, agree that the real potential for improved value will be discovered in chronic care. Episode and bundled payments will be increasingly important to primary care specialists such as cardiologists, endocrinologists, pulmonologists, and asthma specialists who treat a high number of chronic care patients.

Bundled payments more or less come with numerous contracting pitfalls. And the most critical issues for physicians are clarity with regards to services that are included in the bundle, what initiates a bundle and when the bundle ends. When the bundle includes incongruent providers, such as hospitals and physicians, or physicians with home health agencies and rehabilitation, the predetermined concerns include how differences will be handled, which payment decisions are subject to challenge, and which are not.

No – Bundled Payment Is Not Contrast With Capitation

Many people still confuse bundled payment with capitation. But do remember that Capitation is not a bundled payment model. In fact, it is an actuarially determined payment per covered person who might or might not use the doctor’s services or any other services. Primary care capitation normally pays only for doctors services. The difference between capitation and any of the new models mentioned above is centered on the capitation which pays the same amount, regardless of what the patient needs clinically or receives as services. And when we further decode it, there are broader types of capitation that may include services beyond physician services, such as rehab or pharmacy.

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