Premier weighs in on bundled payments Last Updated: July 29, 2014
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Premier urged 2 House subcommittees this week to consider the value of bundled payments as panel members examined a host of issues impacting hospitals and post-acute care providers.

The House Energy and Commerce Health Subcommittee on May 21 evaluated the merits of bundled payments as part of its hearing focusing on site-of-service Medicare payment reforms. Medicare Payment Advisory Commission (MedPAC) Executive Director Mark Miller testified that a bundled payment policy and an expanded readmissions reduction program is needed in the Medicare program to promote care coordination. Miller suggested there are opportunities to begin bundling payments even while a robust standardized patient assessment tool to measure outcomes is developed. During the hearing Ranking Member Frank Pallone (D-NJ) noted that President Obama wants to subject 50 percent of post-acute payments to bundling by 2019.

In a statement for the hearing record, Premier advocated for a permanent, voluntary bundled payment program and underscored the need to include hospital services in the bundle for episodes of care that originate in a hospital.

The subcommittee discussed several post-acute care reform proposals, including legislation introduced by Ways and Means Committee member Rep. David McKinley (R-WV), H.R. 4673, that would implement bundled payments for post-acute care services. Bundled payments in McKinley’s bill would exclude acute care and physician services.

To break down the existing silos of care, align providers’ incentives and encourage greater coordination, Premier urged in its statement for bundles to include the full continuum of care, including hospital services.

“Post-acute care bundling can be a valid and appropriate option for certain episodes of care,” wrote Premier. “However, a post-acute care bundled payment model based on hospital-related conditions that does not include the hospital stay in the bundle is similar to constructing a building without starting with the foundation.”

Premier also submitted a statement for the May 20 House Ways and Means Health Subcommittee hearing in which bundling was referenced by Sean Cavanaugh, CMS Deputy Administrator and Director at the Center of Medicare in the context of other health reform initiatives. In it, Premier emphasized that it is time to move beyond current CMS pilot programs and implement a broad-scale, voluntary bundled payment program that is available to providers nationwide on a permanent basis. Premier offered support for the Comprehensive Care Payment Innovation Act (H.R. 3796), introduced by Ways and Means Health Subcommittee member Diane Black (R-TN), which would create an advanced payment mechanism that encourages collaboration among hospitals, physicians and other providers to improve patient care and reduce costs for patients and government.

“Because it is a permanent national program, it will provide the certainty needed to ensure significant and long-term provider participation,” said Premier. “Moreover, as more providers succeed in this program, which already exists extensively in the private sector, more will join, creating a rising tide of improvement and benefit for patients and the nation.”