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More Clarity on Cardiac Bundled Payments: Time to Look at Transitions to Post-Acute Care

August 4, 2016
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An online report sheds light on the optimization of care transitions that hospital leaders will need to take place as mandatory cardiac bundled payments move forward

I found a report this week from the American Journal of Managed Care online to be particularly helpful in drilling down on the issues surrounding the new cardiac care bundled payment mandate that was announced last week. The August 1 report, authored by Mary Caffrey, targeted transitions of care as particularly important in the discussion, as the Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) push ahead to require hospitals and physicians to accepted bundled payments for the treatment of heart attacks and for coronary artery bypass graft (CABG) surgery.

As made public online on July 25, Secretary of Health and Human Services Sylvia Mathews Burwell announced that, as Burwell put it in her announcement, “Today, the Department of Health & Human Services proposed new models that continue the Administration’s progress to shift Medicare payments from quantity to quality by creating strong incentives for hospitals to deliver better care to patients at a lower cost. These models would reward hospitals that work together with physicians and other providers to avoid complications, prevent hospital readmissions, and speed recovery.”

As I mentioned last week in a blog commenting on the news, “This cardiac care bundled-payment mandate was really no surprise; indeed, its coming had long been rumored. Nonetheless, it could prove to be a ‘shock to the system’ for both physicians and hospital leaders once it becomes fully implemented—and, as with the joint replacement bundled-payment mandate (which was also slightly expanded upon in this proposed rule), it will almost certainly be expanded geographically beyond the initial 98 MSAs—perhaps to all or nearly all Medicare program MSAs.”

As I noted in my previous blog, hospitals have long relied heavily on the fee-for-service Medicare reimbursement they’ve received for cardiac care. The implementation of this program will take away the historical advantages involved here, first in the 98 metropolitan healthcare markets included in the first wave designated in July 25’s proposed rule, and then later, most markets.

Meanwhile, the AJMC online report adds further dimension to all this. As Mary Caffrey noted, “In interviews, both Donna Cameron, a managing director for the Healthcare Performance Improvement Division with Navigant, and Michael Abrams, principal and managing partner for Numerof & Associates, said it’s no surprise that CMS looked at cardiac care as its next therapeutic area for value-based payment reform. A bundled payment mandate for hip-and-knee replacement started in April. Joint replacements and cardiac procedures, such as bypass surgery, have key similarities: they are common, they are expensive, and there’s too much variation in cost.”

And here’s the drill-down part, and it’s all around managing care transitions. As Caffrey notes in her report, “CMS wants to improve care coordination and get more patients into cardiac rehabilitation, which has been shown to reduce readmission rates. Transitions of care offer the greatest opportunities for savings and improved quality, says Reginald J. Blaber, M.D., FACC, executive director of the Cardiovascular Institute and vice president for Cardiovascular Services at Lourdes Health System, based in Camden, NJ. Lourdes recently contracted with one ‘major payer’ for bundled payments, he said, although it’s too early to have results.”

And, when it comes to how hospitals that threat large numbers of low-income patients, as Lourdes Health System does, she quotes Dr. Blaber as saying, “It’s not so much an adjustment, but more of heightened attention to post-acute transitions, and making sure disadvantaged people get access to care out of the hospital.” Health systems need to address barriers to rehab, like finding transportation, and they must make sure patients take medication—even if that means lining up financial assistance, Dr. Blaber told her.

And these insights about care coordination and transitions to post-acute care are very significant, for a couple of reasons. First of all, discharge processes remain largely sub-optimally managed at most hospitals today. There remains a haphazard quality about hospital discharge processes that speaks to the fact that, under classic fee-for-service reimbursement, there really are no reimbursement incentives for hospital managers and admissions, discharge, and transfer managers to optimize those processes. After all, to put it very bluntly, under “pure” fee-for-service payment, the incentive is to let patients go and come back again. Thus, the need that the federal legislators who architected the Affordable Care Act saw to create the avoidable readmissions reduction program as one element in that legislation.

So what’s next for hospitals under this new mandate? Clearly, as Mary Caffrey’s article points out, there is that need to comprehensively reengineer discharge processes in hospitals, particularly those processes that discharge patients to post-acute care settings.