Bundled Payments Out-perform Expectations

Bundled Payments Out-perform Expectations

One element of the Affordable Care Act is exceeding even its original advocates’ wildest dreams. Medicare’s bundled payment program for joint replacements—which pay providers a lump sum for the entire procedure and aftercare, rather than paying a provider for each service—has successfully brought down the costs of such procedures and improved outcomes, according to new research.

Researchers at the University of Pennsylvania were surprised to find that the bundled payments and bonuses promised under the program did not result in a higher number of total procedures, which could have eliminated any savings achieved. Hospitals and surgicenters that participated in the opt-in program also did see themselves gain a higher market share of the procedure. Bundled payments and other quality-based methods of lowering costs are part of a billing process that health information management (HIM) professionals have been instrumental in implementing and continuing.

What’s more, investigators did not find a shift in the racial, socioeconomic, or other demographic features of the patients receiving joint replacements with bundled payments—the other main concern for the policy—which indicated hospitals were not discriminating against racial minorities or poorer patients, Vox reported. Investigators are encouraged by the findings, in part, because this method of quality-based reimbursement is being tested for other procedures and conditions such as cardiac stent placement and certain types of cancer care. The Trump administration has embraced this payment model even as it has moved to reverse other Affordable Care Act initiatives.

“I think one way of thinking about this is: After a bunch of years, ACOs save maybe hundreds of dollars per patient. Bundles, you can see savings in thousands of dollars in a year or two,” study co-author Ezekiel J. Emanuel, MD, PhD, told Vox. “It focuses attention in a very productive way, and you do see results relatively quickly.”

Click here to read the full study.

Mary Butler is the associate editor at Journal of AHIMA.