EXECUTIVE SUMMARY

Even though the latest rounds of bundled payments are voluntary, the shift toward value-based reimbursements continues — meaning hospitals and their case management staffs still should focus on improving patient care, reducing readmissions, and containing costs at the same time.

• Be aware of the costs of services and use the information to recommend the most cost-effective discharge plan that should produce good outcomes.

• Use retrospective data from each service line to identify areas where your process can be improved and track data in real time to monitor your progress and make any necessary changes.

• Work with a cross-continuum, multidisciplinary team to design protocols that standardize care across levels of care, create reports on team and individual performance, and share the information to improve the program.


If your hospital isn’t already participating, or planning to participate, in a bundled payment arrangement, it could be at a disadvantage in the future as payers increase emphasis on cutting costs and improving quality.

The Centers for Medicare & Medicaid Services (CMS) currently is screening applicants for the new Bundled Payments for Care Improvement (BPCI) Advanced model, which includes 29 inpatient clinical episodes and three outpatient clinical episodes. The voluntary program begins Oct. 1.

“Hospitals either have to get on board with bundled payments or be left out in the future. Medicare is making it voluntary, but hospitals that don’t participate and keep on doing the same old thing without cost containment are going to lose in the end,” says Donna Hopkins, MS, RN, CMAC, a case management consultant based in Boerne, TX.

Many of the previous bundled payment initiatives have shown that the same level of service — and often better outcomes — can be provided for a lot less money, Hopkins adds. “The cost of healthcare has to come down. The aim of bundled payments is for patients to receive better care and better value, but at a lower cost,” she says.

“Cost containment has begun to be the driving force for improving care now that it’s affecting reimbursement,” she adds. “Not only is the bottom line affected by direct costs vs. income, there are added incentives and penalties.”

The new administration has made a lot of changes in the bundled payments program and other CMS initiatives, states Brian Pisarsky, RN, MHA, ACM, director at KPMG Healthcare Solutions. “But one thing is clear: Value-based arrangements are not going away,” Pisarsky says.

“Historically, when CMS comes up with a voluntary program, it’s likely to become mandatory,” says Beverly Cunningham, RN, MS, ACM, consultant and partner at Oklahoma-based Case Management Concepts.

However, she points out that Alex Azar, the new Department of Health and Human Services (HHS) secretary, has made it known that he is not a fan of mandated bundled payments. “Regardless, case managers still need to become efficient, even if their hospital isn’t participating in this round of bundled payments. The next application period is in 2020 and they should start preparing for the next round, should their executive leadership decide to participate,” she adds.

Bundled payments are not expected to go away, says Teresa Marshall, RN, MS, CCM, senior managing consultant for Berkeley Research Group.

“These are just simply the latest wave of bundled payments. The payments started in 2013 with a second round beginning in 2015, and now CMS has announced the advanced bundles for 2018,” she says.

CMS’s previous leadership made participation in a group of cardiac and orthopedic bundled payments mandatory, but the agency’s new leadership canceled them a few weeks before they were to go into effect.

But hospitals that have prepared for the programs didn’t waste their time, Marshall points out. “Even if they chose different clinical programs for the new program, they have experience in developing the process and are aware of how the components work. They can take this knowledge and apply it to other bundled payment initiatives,” she adds.

Healthcare is shifting from volume to value, points out Ken Steele, principal with ECG Management Consultants. “It’s all about improving quality of care and the patient experience, all within a value-based realm. All payers, not just Medicare, are holding providers accountable for improving value,” he says.

Health systems with goals of improving care delivery and reducing costs are likely to seize the opportunity to be rewarded for value and have signed up to participate in the new bundled payments program, Steele says.

If the models become mandates, health systems that don’t already have experience with bundled payments are going to be at a disadvantage, Steele adds.

CMS has designated two types of participants for the BPCI Advanced program: conveners and nonconveners, Cunningham says. Conveners work with downstream entities and are at risk for the entire episode of care. Nonconveners are at risk only for the services they provide.

Participants will be paid regular Medicare fee-for-service rates. The costs will be compared to a target price determined by CMS and the providers will either receive a bonus or pay a penalty, depending on their results. CMS will distribute the target prices to hospitals in May and will offer participant agreements to applicants in June, according to Susan Wallace, MEd, RHIA, CCS, CDIP, CCDS, director of inpatient compliance for Administrative Consultant Services, a Shawnee, OK-based healthcare consulting firm.

CMS has announced that it will calculate each hospital’s benchmark prices for each clinical episode using risk-adjusted models that take into account patient case mix, patterns of spending relative to the hospital’s peer group, and historical Medicare fee-for-service efficiency in resource use during the baseline period, which runs from Jan. 1, 2013-Dec. 31, 2016. The bundled payment performance period starts Oct. 1 and runs through Dec. 31, 2023, Wallace adds.

The bundled payments initiative is geared to Medicare patients, but the improvements in the patient care process will improve care delivery for all patients, Steele says.

“In addition to making sure that patients have a great experience in the hospital, case managers have to make sure they have a successful recovery throughout the continuum,” Steele says.

The goal of bundled payments is to provide care at higher quality and lower costs, says John Wagner, associate director at Berkeley Research Group.

“It is a benefit to all when patients receive more efficient and cost-effective care,” he says.

Case managers have significant influence over other disciplines in containing the cost of care, Hopkins points out. “The shift toward value-based reimbursement and other changes in the healthcare arena put case managers behind the 8-ball,” Hopkins says.

Case managers should be aware of the cost of individual services and recommend the most cost-effective choices, Hopkins says. “The new case management mantra is ‘why not home,’ whenever it is safely possible. Avoiding a costly post-acute placement, or keeping a patient in the acute care setting an extra day or two in order to avoid a rehab stay, can significantly influence costs,” she says.

The new emphasis on cost-effective care means case managers are going to have to be more strategic than ever, Cunningham says. Case management leadership should make sure their staff understands what bundled payments mean to their hospital’s bottom line and keep the case management staff up on all the new rules and regulations that come down the pike, she adds.

“Case managers are going to have to be very innovative in discharge planning and care coordination and to have a sense of urgency in moving patients through the continuum,” she adds.

It’s important for case management directors to understand the bundled payments process so they can ensure that the case management model is sufficient enough to handle the program, Marshall says.

It’s not too soon to start preparations for the new program, Pisarsky says. Case managers should verify the bundled payment contracts the hospital already has in place, as well as those in the new program that leadership is applying for, he adds. Then, gather data on past performance so you can make improvements on your processes before the program — and the hospital’s financial risk — begin, he says. (For more information on gathering data and how to use it, see related article in this issue.)

Hospitals can no longer afford to look at patient care retrospectively. They need to be aware of everything in real time to get a better handle on the cost — and that is the role of case management, Hopkins says.

It’s no longer enough to assess patients within 24 hours, Pisarsky says. “Case managers need to start on discharge planning on hour 1,” he adds.

That means case managers must assess the patient’s living situation and support on the day he or she is admitted, Steele adds.

He suggests developing a screening checklist to determine what the patient will need after discharge. “Case managers, therapists, home health providers, and physicians should collaborate on a checklist that assesses the home setting, including physical obstacles like stairs, family or other support, [and the] patient’s ability to perform activities of daily living and safely live independently,” Steele recommends.

Bundled payments mean hospitals must place case managers at all entry points — the ED, admissions, the transfer center, and surgery, Cunningham says.

In the current hip and knee bundled payments program, the surgeries were scheduled and case managers would have been able to start planning discharges in advance, Cunningham points out. But the new initiative includes many medical diagnoses, and those patients are likely to be seen in the ED, she adds.

“It’s more important than ever for hospital leaders to understand the value of having case managers in the emergency department up to 24 hours a day, seven days a week, knowing it will be expensive. But, when the hospital faces financial risk, case managers are going to have to increase collaboration with emergency department physicians — who are the primary group of collaborative admitters [physicians who collaborate with admitting physicians] in most hospitals,” Cunningham adds.

Staffing case managers in the ED 24 hours a day, seven days a week is ideal, but it’s not practical for some hospitals, Pisarsky says. In those cases, case managers should be present when most of the ED admissions take place, he adds.

Track your admissions and when they occur, and staff accordingly. “You don’t want to have a case manager on duty from 9 a.m. to 5 p.m. if most of the admissions occur from 4 p.m. to midnight,” Pisarsky adds.

Case managers should assess patients on admission, and not the next day. They should determine the expected discharge date on admission, and understand if the patient needs complex discharge planning and when to bring in a social worker, Cunningham says.

Bundled payments and other pay-for-performance programs make it essential for case managers to track avoidable days so hospital leadership can understand where the delays are occurring, why they are occurring, and who is involved, Cunningham says.

“All of this cannot happen if case managers have such a large caseload that they are not able to have a sense of urgency. Case managers are only as effective as their caseloads. When their caseload is high, all case managers are doing is reacting and they have to be proactive,” she says.

“Case management directors can teach their staff about what they need to do, but if their caseloads are large, all they are doing is scrambling every day,” she says.

It’s important for case managers to stay current on what is going on in healthcare, Cunningham says. She suggests participating in webinars, reading about what CMS has decreed, and attending a national meeting, if possible.

“Case managers can’t avoid educating themselves on the latest in healthcare. Case management is becoming a more dynamic role that is ever-changing and, like it or not, individual case managers have to change to keep up,” Cunningham says.