Group Effort: Bundled Payments Require Better Communication

by Damon Braly | September 12, 2011

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  By January 1, 2013, Medicare must implement a pilot program for bundled payments—a method of paying providers a set amount for a group of related services. As with many aspects of health reform, when Medicare paves the way, commercial payers likely follow.

  So, should the industry expect to see all providers moving toward a bundled payment model? That depends, largely, on their ability to adopt new communication methods.

  Coordinated Care

  Because a bundled payment (also known as a “case rate” or “episode-based payment”) is distributed among all the providers who participate in a patient’s episode of care, this can be a powerful incentive for those providers to coordinate their efforts, explains David Hochheiser, vice president of commercial payment integrity for OptumInsight.

  Orchestrating efforts among providers, however, is easier said than done. It requires an unprecedented level of communication, as the providers may be spread across hospitals, physician offices, imaging centers, rehabilitation facilities and other types of organizations, Hochheiser says. These organizations need to coordinate all of the clinical and financial processes that impact care delivery, billing, reporting and payment distribution.

  Compounding this free flow of information is the still-prevalent reliance on antiquated methods of communication. Many providers and payers continue to rely on standard mail, fax and telephone to exchange information, says Daniel Dunn, PhD, senior vice president of business solutions for OptumInsight. Under new bundled payment programs, these stakeholders must evolve their communication methods to those that promote efficiency and effectiveness.

  To manage a bundled payment, there are four communication components that must take place among the stakeholders involved, Dunn says. These include:

  • Registration: Patients who have procedures or conditions that will be billed under bundled payment arrangements need to be enrolled. Also, providers must receive authorization that the patient qualifies for the bundle and has been enrolled.
  • Trigger Processes: Once patients are enrolled, certain processes must be triggered to manage the clinical and financial aspects of the payment. Examples from a clinical perspective include updates on the services provided to the patient that are related to the bundle as well as comparisons with benchmarks and the bundle assumptions. When the claims system is used to administer payments for a bundle, a process would be required to notify that system and assess a patient’s ongoing submitted claims relative to the bundle arrangement.
  • Coordination: Communication across all providers— sometimes including the patient—supports better care and improvement opportunities. An example of this is to connect all relevant providers and share information at the onset of the bundle and as the bundle progresses.
  • Assessment:  On a periodic basis, the success of a bundled payment design—overall and for the individual providers involved—must be evaluated. Sharing information with providers about performance, including cost of care, quality of care and service, supports an understanding of success and helps identify areas for improvement.