Why Bundle?

WHY BUNDLE?

By April 18th, long term care providers applications to accept bundled payments are due. Why should you consider participating in the Bundled Payment Initiative?

When Congress passed the Affordable Care Act, they also authorized a variety of demonstration projects to test the concepts and to offer providers an opportunity to experiment with this new reimbursement strategy before it is fully implemented. In actuality, the bundled payment initiative is not truly a global payment for the entire care period. It is more accurately a shared savings program. In this scenario, Medicare gets its savings up front when the hospital with the initiating admission gives Medicare a 2% discount off of the usual DRG payment. The hospital receives its portion of the shared savings when the overall costs of providing care over the entire episode beats the index pricing period. The providers who contribute to the success receive a portion of that shared savings from the hospital. Of course, both the hospitals and providers are at risk if costs exceed the index period as well.

SHARED SAVINGS: THE FOUNDATION OF AN ACO

An ACO operates on the same premise of shared savings. The difference is that in the ACO scenario, all DRGs are included-- not just a few select clusters. An organization’s participation in the Bundled Payment Initiative gives you experience operating in an ACO environment before you fully need to adopt all of that risk. With participation in Bundled Payment Initiative, you are developing capacity to reduce variations of care, reduce complications, reduce re-admissions to the hospital, and operate with efficient utilization. Eventually, this model will be required for all Medicare cases.