Bundled Payment Program Becomes Required for Some in 2016

Dear Blog,

Lower extremity joint replacements are common surgical procedures across the United States, resulting in over $7 billion in expense to Medicare, according to the centers for Medicare and Medicaid services. This creates an opportunity for the CMS Center for Innovation to expand on the success they have demonstrated in their Bundled Payment Initiative to make this shared savings model required in 75 metropolitan statistical areas in 2016. This requirement has been put forward in proposed rule making by CMS and comments were due back to them on September 8, 2015. The final rule is pending and expected this Fall with implementation in January, 2016.

Under this rule, hospitals in these 75 areas who perform lower extremity joint replacements (DRG clusters 469 and 470) will be responsible for the costs associated with care of these patients both during the in-patient stay when one of these DRGS are triggered, and also for the 90 day post-discharge period. The hospital will be paid for the DRG as they usually have been at a special rate that includes some savings to Medicare up front. Each hospital will also have a DRG specific price set based on the in-patient and post discharge spend for its patients during a baseline period. At the end of the year, if a hospital has has expenses that are less than these costs, they receive the difference (savings). If the costs are higher, then they must pay CMS the difference.

For hospitals, this means that they need to be more focused on quality outcomes with standardized and efficient processes, and an avoidance of complications in the post discharge period that they would ultimately be responsible for. This means the hospital needs to careful partner with post Acute providers who help them achieve these outcomes. The next issue of this newsletter will include a discussion of strategies for success under bundled payments. Grassi will also be holding a webinar on this topic on Wednesday, January 27th...watch for details at http://www.on2url.com/lnk?MTY5Mjc1MHwxMjAyMDk2OTIyfHM9MQ%3D%3D

The Tomaino Group

127 Norwood Avenue
Northport, NY
11768
US

joe@tomainogroup.com
(914) 772-1552


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