Industry Stakeholders React with Criticism, Praise for Proposed CMS Bundled-Payment Program in AIS Newsletter

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For its July 20 issue, Atlantic Information Services’ Health Plan Week interviewed industry experts and stakeholders about whether CMS’s proposed knee/hip bundled payment program would complement or conflict with private insurers’ own knee/hip bundled payment programs.

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) proposed a new bundled-payment model that will put hospitals at financial risk for not making quality and care improvements for patients recovering from hip and knee replacement surgery. For its July 20 issue, Atlantic Information Services, Inc.’s (AIS) Health Plan Week (HPW) interviewed industry experts and stakeholders about this program, with some reacting critically and others viewing it as a way for insurers to “dip your toe” in the alternative payment world. They also say that while bundled payments are positive since they help move away from fee-for-service payments, some aspects of the proposed plan are potentially harmful and some insurers are not married to the idea of bundled payments in the first place.

One of those critics is Harold Miller, president and CEO of Pittsburgh-based Center for Healthcare Quality and Payment Reform, who tells HPW the problem with the CMS proposal is that right off the bat it makes one wonder whether the plan is a bundle. The proposal states that the hospital conducting the surgery would be held accountable for spending. That hospital would have to work with physicians, home health agencies and nursing facilities to coordinate care. “If you have a true bundle and you say, ‘OK, group of providers, get together, manage this bundle and kind of figure out how you want to deliver care differently, and then divide up the money however you want to,’ people commit to it however they want to and structure it in a fair way,” Miller says. “But if you say to one entity you are going to be financially responsible for what all the other entities do but you won’t actually have any control over them, what are you going to do?”

University of Pittsburgh Medical Center (UPMC) Health Plan executives are more positive about the CMS initiative. “Overall it is a very positive proposal and something we have been working on over the last few years with our provider network,” says Angela Moczan, senior director, strategic initiatives at UPMC Health Plan. “I definitely don’t think it will mess anything up. If anything it is a step forward, another step in a direction toward different payment models. We’ve been doing something very similar with our Medicare Advantage and commercial membership with our integrated delivery and financing system for the past several years.”

Tom Aubel, director of medical payment, strategy and policy at UPMC Health Plan, tells HPW it would only take “minor tweaks” for his company to match up with the CMS program since UPMC is an integrated health system and has hospitals and physicians. “We really look at the full continuum of care, which is a little different than what the nationals can do since we can see those claims and try and make doctors aware of what they are doing on the insurance side and hospital side,” he says.

Visit http://aishealth.com/archive/nhpw072015-02 to read the article in its entirety.

About Health Plan Week
Published since 1991, the 8-page weekly newsletter Health Plan Week provides timely, objective business, financial and regulatory news of the health insurance industry. Coverage includes new benefit designs and underwriting practices, new products and marketing strategies, mergers and alliances, financial performance and results, Medicare and Medicaid opportunities, disease management, and the flood of reform-driven regulatory initiatives including medical loss ratios, exchanges, ACOs and myriad benefit design changes that are mandated. Visit http://aishealth.com/marketplace/health-plan-week for more information.

About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.

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