NEMA ei November 2016 - 9MITA


MITA

Bundled Payments, Bungled Care?
Madeleine Smith, PhD, Director, Government Affairs & Policy, General Electric
Dr. Smith chairs the MITA Reimbursement Committee.

A

s financial pressures on the healthcare system rise,
the Center for Medicare and Medicaid Services
(CMS) and private payers are experimenting with
new ways to incentivize the efficient production of
healthcare to reduce costs.
One popular payment model is the "episode bundle,"1
where a group of providers receives a single fixed
fee for all care for a patient with a defined clinical
condition over a specified period of time. Often, the
episode begins with an admission for inpatient care
and ends upon discharge or after a fixed period of
post-discharge care.
Facilities and clinicians are bundled providers who
have common incentives to control the volume of
services and costs. This is a dramatic shift from
traditional fee-for-service (FFS) payment models,
where a single provider gets paid for each service.
Bundles are hardly a new concept. CMS has been
paying hospitals for inpatient care using bundles since
the 1980s. The fixed amount depends on the patient's
diagnosis, with higher payments for more complex
diagnoses (e.g. heart transplant) and lower payments
for less complex diagnoses (e.g. headache). If the
hospital provides care for less than the fixed amount,
it keeps the difference. If the cost exceeds the amount,
the hospital takes a loss.
Under episode bundles, care provided in the doctor's
office or other outpatient settings is still generally paid
under FFS, but CMS is building bigger and longer
episode bundles that capture more and more care
delivered by non-hospital providers.
Starting with the Medicare Acute Care Episode (ACE)
Demonstration, CMS began to explore bundling
payments to hospitals and physicians that are triggered
by hospital admission for joint replacements and certain
cardiac procedures and end at discharge. CMS recently
announced a new series of episode bundles that provide
a single payment to bundled providers for an inpatient
stay and all care within 90 days after discharge.
While policymakers hope these initiatives will promote
better coordination among care providers to reduce
costs, they recognize the incentives these create to

skimp on care or to avoid sicker
patients. One way to guard against
such practices is to monitor the
quality of care.
Although imaging is critical to the screening,
diagnosis, staging, surveillance, and therapy
monitoring of many medical conditions,
stinting is a concern. If the payment is too
small, a provider may not be able to cover the
cost of follow-up imaging. Providers may also be
induced to refer for cheaper tests-perhaps, an x-ray
when magnetic resonance imaging (MRI) is more
appropriate. A patient may not receive the right scan at
the right time, with potential negative effects on health.
MITA monitors the launch of these bundled episodes
and offers feedback to CMS on the critical role imaging
plays in cardiac and orthopedic care. The value of
imaging must be appropriately recognized by payers
and healthcare providers to ensure that patients get the
care they need.
Imaging is often seen as a cost driver, and we believe
this perception needs to shift along with payment
models. The upfront cost of a scan is insignificant
compared to the cost of delayed diagnosis,
misdiagnosis, or a diagnosis missed altogether. In a
bundled payment, an early and accurate diagnosis
may mean earlier care and fewer procedures, thereby
reducing costs and increasing value at the backend.
As with any experiment, we believe that there will
be much trial and error over the next few years as
more initiatives are launched. It is our hope that this
experiment will not only lower costs and improve care
but also help payers and providers recognize the true
value of medical imaging. ei

	 Robert A. Berenson, Suzanne F. Delbanco, Roslyn Murray, Divvy K. Upadhyay,
"Bundled Episode Payments: Payment Methods and Benefit Designs: How They Work
and How They Work Together to Improve Health Care," April 2016

1

MITA

9

www.nema.org  *  November 2016


http://www.nema.org

Table of Contents for the Digital Edition of NEMA ei November 2016

Comments from the President
Breaking News
Survey: Benchmarking, Transparency Work
Centerfold: A look inside the Medical Imaging & Technology Alliance (MITA), a division of NEMA
2017 NEC Broadens Requirements for SPDs
Power Surges: Protect Your Home!
Grid Modernization Promotes Sustainability
Advocacy
Code & Standards
Revision Simplifies Magnet Wire Production
International
Business Analysis
NEMA ei November 2016 - Cover1
NEMA ei November 2016 - Cover2
NEMA ei November 2016 - 1
NEMA ei November 2016 - 2
NEMA ei November 2016 - 3
NEMA ei November 2016 - 4
NEMA ei November 2016 - Comments from the President
NEMA ei November 2016 - Breaking News
NEMA ei November 2016 - 7
NEMA ei November 2016 - Survey: Benchmarking, Transparency Work
NEMA ei November 2016 - 9
NEMA ei November 2016 - 10
NEMA ei November 2016 - 11
NEMA ei November 2016 - 12
NEMA ei November 2016 - Centerfold: A look inside the Medical Imaging & Technology Alliance (MITA), a division of NEMA
NEMA ei November 2016 - 2MITA
NEMA ei November 2016 - 3MITA
NEMA ei November 2016 - 4MITA
NEMA ei November 2016 - 5MITA
NEMA ei November 2016 - 6MITA
NEMA ei November 2016 - 7MITA
NEMA ei November 2016 - 8MITA
NEMA ei November 2016 - 9MITA
NEMA ei November 2016 - 10MITA
NEMA ei November 2016 - 11MITA
NEMA ei November 2016 - 12MITA
NEMA ei November 2016 - 13MITA
NEMA ei November 2016 - 14MITA
NEMA ei November 2016 - 15MITA
NEMA ei November 2016 - 16MITA
NEMA ei November 2016 - 2017 NEC Broadens Requirements for SPDs
NEMA ei November 2016 - 14
NEMA ei November 2016 - 15
NEMA ei November 2016 - Power Surges: Protect Your Home!
NEMA ei November 2016 - 17
NEMA ei November 2016 - 18
NEMA ei November 2016 - 19
NEMA ei November 2016 - Advocacy
NEMA ei November 2016 - 21
NEMA ei November 2016 - Code & Standards
NEMA ei November 2016 - Revision Simplifies Magnet Wire Production
NEMA ei November 2016 - 24
NEMA ei November 2016 - International
NEMA ei November 2016 - Business Analysis
NEMA ei November 2016 - 27
NEMA ei November 2016 - 28
NEMA ei November 2016 - Cover3
NEMA ei November 2016 - Cover4
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https://www.nxtbook.com/ygsreprints/NEMA/g20729_nema_ei_july11
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https://www.nxtbook.com/ygsreprints/NEMA/g19141_nema_ei_april11
https://www.nxtbook.com/ygsreprints/NEMA/g18610_nema_ei_march11
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