Designing Successful Bundled Payment Initiatives

Published

Bundled payments—which link payments for the multiple services beneficiaries receive during an episode of care—are intended to align reimbursement with the health care triple aim of improving experience of care, improving population health, and reducing total costs of care.

As our health care system shifts from volume-based payments to value-based payments, bundled payments are growing in use because they have the ability to both lower costs and improve health care quality. However, with bundled payments, there is the potential for unintended consequences, including underutilization of needed, but costly, services or avoiding caring for the sickest patients.

The National Pharmaceutical Council led a study that identified three principles intended to maximize the positive aspects and minimize the negative consequences of bundled payments:

  1. Bundled payments should be adequate for the care needed to achieve optimal patient outcomes. This includes setting an appropriate time frame that reflects the full cycle of care; providing sufficient reimbursement for services and technology needed to achieve the desired patient outcomes; and targeting a homogenous population.
  2. Evidence-based treatment variability should be incorporated into the bundled payment, including risk adjustment as needed and allowances for patient choice.
  3. Quality metrics should be used to ensure appropriate care in a bundled payment program where there may be incentives to avoid providing costly but necessary services. To encourage appropriate care and discourage underuse of care, quality metrics should be assigned adequate financial consequence.

The study also noted that bundled payment success “requires renewed focus on the development of payment adjustment techniques that accurately predict treatment costs for the individual and the expansion of quality metrics into areas where they do not currently exist. Without these changes, bundled payment will need to remain limited in scope; otherwise patient care could be compromised.”