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2015 Was a Big Year for Bundled Payments. Here’s Why.

By Tom Halvorson/Tuesday, June 28, 2016

On November 16, 2015, CMS announced the Final Rule for the Comprehensive Care for Joint Replacement (CJR) model, instituting mandatory bundled payments for hip and knee total joint replacement episodes for hospitals in select geographies across the country. The bundles would cover all related services from inpatient admission to 90 days after discharge.

Unlike the earlier bundled payment initiatives, in which hospitals success was defined by their ability to reduce episode spending from historic levels, success under the CJR program is based on a health system’s ability to become and remain an efficient provider of joint replacement episodes in their region.

Case Study: Bundled Payments in Action

Although the new CJR payment model will continue for five performance periods, through December 31, 2020, it’s important for health systems to evaluate and monitor their CJR deployment as soon as possible. To position one regional health plan’s health system for success, Truven Health Analytics provided a high-level assessment, implementation services, and ongoing monitoring support. With the assessment, Truven Health:

●      Analyzed historical spending and utilization of post-acute service trends

●      Evaluated historical utilization of post-acute services against regional benchmarks using Truven Health MarketScan® data and the Medicare Standard Analytical File

●      Analyzed skilled nursing providers used by CJR patients

●      Performed a variation analysis of high-volume surgeons’ spend, utilization of post-acute services, and readmissions

●      Forecasted annual financial wins and losses

●      Projected performance using current internal data

As a result of the Truven Health review and modeling, the health system was able to develop and implement a standard care pathway to address variation in post-acute care, achieve consensus from the physician practice on the newly formed pathway, institute discharge planning protocols, and define a clear post-acute network. These efforts allowed the system to reduce single joint replacement costs by $400 and bilateral joint replacements by $3700.

How Ready Are you to Implement Bundled Payment Pricing?

For answers to your questions about bundled payments, or for help devising a bundling strategy, contact us at payersolutions@truvenhealth.com.

Tom Halvorson
Director, Analytic Consulting

*These results are a statistical narrative represented by a number of Truven Health client projects

 

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