What is Being Thrown into Your Healthcare Reimbursement Stew: All with a Goal of Care Improvement

Bundled payments, new models of reimbursement, care transitions, value-based reimbursement, readmission penalties, are all part of the jargon in payer and provider circles today.

And there is no lack of opinions on what new or a combination of all is the answer to quality care, cost savings and outcomes results. All approaches come with some risks to providers and financially to payers.

On the eve of the new year, the Centers for Medicare & Medicaid Services (CMS) released the health care organizations selected to participate in  the Bundled Payments for Care Improvement initiative, an innovative new payment model.

“Under the Bundled Payments for Care Improvement initiative,” organizations will enter into payment arrangements that include financial and performance accountability for episodes of care. These models may lead to higher quality, more coordinated care at a lower cost to Medicare,” CMS said.

The Bundled Payments initiative is comprised of four “broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care,” the agency said.

The Robert Wood Johnson Foundation described bundled payments as the “quest for simplicity in pricing and tying payment to quality.”


“Driving Value-Based Reimbursement with Integrated Care Models” The burgeoning fee-for-value environment is rewarding networks of providers who collaborate and coordinate care, bridging the gap between health systems and physicians and sparking dialog and care compacts between primary care and specialists.


“Though the strategy sounds simple, implementing a different way to pay for care across health systems and communities is a complex undertaking,” RWJF said in a brief from “Aligning Forces for Quality,” a foundation initiative with a goal of improving overall quality of health care in targeted communities.

Think tanks, organizations like RWJF, the Commonwealth Fund, healthcare associations and major consulting firms have all been studying innovative approaches to reforming payment for healthcare mechanisms.

As an example, profiles created for physicians based on the cost of the care they provide can vary widely, depending upon the methods used by insurance companies to create the profiles, a RAND Corp. study found a few years back.

Researchers said the findings add to the concern about the accuracy of physician cost profiles being created by insurance companies aimed at encouraging patients to visit low-cost physicians.

RAND researchers analyzed information from four commercial health plans in Massachusetts that at the time enrolled a total of 1.1 million adults. The findings were published in the Annals of Internal Medicine.

The study found that between 17 percent and 61 percent of physicians would be assigned to a different cost category, depending on the methods used. Cost categories in conjunction with quality scores are used to assign physicians into performance tiers.

For example, “a patient may have to make a $15 co-pay to see a physician assigned to the highest performing tier, but that co-pay might increase to $30 if the physician is in a lower performing tier. If physicians are assigned to a lower performing tier, their patients might leave them and switch to a physician in a higher performing tier,” the researchers said.

RAND researchers also examined the methods that insurance companies use to assign responsibility for the cost of care when a patient sees multiple doctors.

An example: “one rule might assign the cost of care for a patient to the physician who accounts for the highest percentage of patient visits. Another rule could assign the cost of care for a patient to the physician who accounts for the highest percentage of the costs incurred in delivering care.”

No matter what the final ‘solution(s)’ are adopted “an important step for the future is for insurance plans to be more transparent about the methods they use to assign care costs and suggested that insurance plans enlist physicians into efforts to create attribution rules used for cost profiling,” said Dr. Ateev Mehrotra, a RAND researcher and a professor at the University of Pittsburgh School of Medicine, and the study’s lead author.

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