Jim Dupree

Jim Dupree, MD, MPH, is Co-Director of MVC and Assistant Professor of Urology at University of Michigan.

Bundled payments seem to be everywhere these days.  For episodic care, like surgeries or acute medical conditions, bundled payments attempt to improve quality and decrease costs for the duration of the care window. Bundled payments are meant to align incentives between all of the various providers who care for a patient during the episode.

Bundled payments have been used by the Centers for Medicare & Medicaid Services (CMS) for many years through their voluntary Bundled Payments for Care Improvement initiative.  Most recently, CMS enacted its first mandatory bundled payment program, the Comprehensive Care for Joint Replacement.  Bundled payments are also found in the private insurance market and even outside the insurance market all together.  Some large employers are now contracting directly with hospitals to provide bundles of surgical care for their employees.  And we can expect to see bundled payment programs flourish after passage of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, which incentivizes physicians to participate in alternative payment models like bundled payments. 

But, not all bundled payment programs are the same; each bundle will have different structure and rules.  Here are 10 key questions you should ask about each new program:

  1. What is the target condition, and how is it defined? What are the inclusion and exclusion criteria for patients to qualify for the bundle?
  2. For bundles based on hospitalizations, are pre-admission services included in the bundle?
  3. What is the time window for the bundle? Most bundles attempt to capture care for 30 to 90 days after discharge.
  4. How is patient choice accommodated in the bundle?
  5. What are the bundle’s quality measures? How do those quality measures help ensure that important, needed care is not withheld from patients?
  6. Are all services and types of care within the time window attributed to the bundle? If not, how is it determined which services are and are not attributed to the bundle?
  7. What type of risk adjustment is used in the calculation of episode costs?
  8. Does the target bundled price incorporate regional variation, teaching status, or other structural characteristics of your hospital?
  9. How much variation do you think exists for that services?
  10. What are your current episode costs for that condition, and how do you compare to your peers?

All of this data is available for MVC member hospitals to help them understand their local care episodes. For additional reading, Health Affairs recently released an excellent summary about designing bundled payment initiatives.

Questions or comments?  We’d love to hear from you.  You can comment on this article, or use the form at the bottom of this page.