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Is That a Bundle Behind Your ACO?

There is a clear need for health systems to integrate bundled payment models into their population health management and value-based care strategy. Bundled payments are foundational to building the capabilities needed for success in risk-based payment models, aligning and engaging with clinicians, and positioning an organization as the best choice for care. And healthcare providers across the board, as well as new competitive and third-party entrants, are increasingly participating in these models.

The Centers for Medicare & Medicaid Services (CMS) Bundled Payments for Care Improvement (BPCI) Advanced Model, for instance, is engaging nearly 1,300 hospital and physician entrants in inpatient and outpatient episodes. However, not every organization has the ability to participate in this model. Medicare beneficiaries in accountable care organizations (ACOs) in Track 3 of the Medicare Shared Savings Program (MSSP) and the Next Generation ACO Model, for example, are completely excluded from BPCI Advanced. This is limiting their ability to align, engage with and properly incentivize specialists.

Bundled payments can amplify an ACO’s population health and value-based care strategy.

While MSSP and Next Generation ACOs are already taking steps to set their organizations up for success in a value-based payment environment, bundled payment models can not only work in parallel with these programs but also amplify the work by aligning specialists within the ACO. In fact, incorporating bundled payment models into ACO and/or clinically integrated network (CIN) operations is a critical strategy to consider for many health systems.

Health systems that are either unable to participate in BPCI Advanced, not ready to take on the incremental risk or want to take steps to further align and partner with specialists, may consider developing a “shadow bundle” within their ACOs and/or CINs as an alternative.

Shadow bundles use existing ACO attributed lives and claims data to align specialists, and provide an in-depth view of procedural or chronic disease opportunity.

A shadow bundle is completely designed and administered within an ACO or CIN. The shadow bundle population is based on ACO/CIN attributed beneficiaries, and any cost savings are administered and distributed through the ACO/CIN.

Because a shadow bundle is completely overseen by an ACO/CIN, the design and definitions are at the discretion of the organization – not CMS. This provides health systems an enormous amount of flexibility to design and develop bundles that best incentivize their primary care and specialist physicians within their ACOs/CINs. For example, they could create 30, 60 or 90 day episodes for procedural based bundles or develop a 12-month bundle centered on patients with complex chronic diseases.

Shadow bundles can provide a nuanced view of ACO/CIN performance on procedural and/or disease-specific bundles beyond what would be available under an ACO/CIN in isolation. This more focused view gives attention to areas that otherwise may have been overlooked. Likewise, shadow bundles also offer the ability to create specialist engagement models, such as gainsharing, which is an essential strategy to drive clinicians to align with the health systems rather than third party conveners. Identifying these incremental cost savings and clinician alignment opportunities can help to drive and accelerate additional cost and quality improvements across an ACO/CIN.

Additional benefits of engaging in shadow bundles include:

  • Supplementary savings opportunities (net new) within an ACO/CIN.
  • Vehicle to reduce spend across expensive episodes when managing a population.
  • Further focus on high-cost/opportunity service lines across the episode continuum of care.
  • Leverages current ACO/CIN business strategies.
  • Synergistic with Hospital Quality and Efficiency Programs (HQEPs) and other incentive models.
  • Increases patient, clinician and provider experience.

While shadow bundles provide ACOs/CINs a litany of benefits, including the ability to create customized bundled payment models, design complications can be overwhelming.

There are several key questions to consider when evaluating the most appropriate model:

  • Would participating in BPCI Advanced benefit the ACO/CIN, health system or physicians more than a shadow bundle?
  • Will/Are specialist partners in your market creating their own bundled payment models?
  • Will/Are third parties in your market creating bundled payment models with your specialists?
  • Is the ACO/CIN large enough to accommodate a shadow bundle?
  • Would ACO/CIN specialists be interested in engaging in a shadow bundle?
  • Is the ACO/CIN interested in procedural-based bundles, chronic disease-focused bundles, or both?
  • If the ACO gainshares, would it have shared savings to fund a gainshare pool?

A clear understanding of market conditions can help ACOs determine if a shadow bundle is the right fit.

Health system leaders need to understand if a shadow bundle is an appropriate fit for the type of ACO/CIN model they have. To do so, they must methodically evaluate the ACO/CIN to determine if there is a need for further specialist engagement, survey the market to identify which clinicians are engaged in bundles, and understand which primary care and specialist physicians are interested in partnering to ensure they have the buy-in to be successful.

For any bundled payment program to achieve quality improvement and cost savings, it also needs the capabilities to support an effective post-acute utilization reduction and ambulatory prevention strategy. Premier helps its members build these capabilities and address post-acute and ambulatory challenges and opportunities.

If you are interested in learning more, contact

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