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Data Doc: Bundled Payments Allow EPs to Reduce Costs While Providing Great Care

Salgia, Anup DO

doi: 10.1097/01.EEM.0000521197.26826.f7
Data Doc

Dr. Salgia is a physician executive at Cerner Corporation and an assistant professor of emergency medicine at Northeast Ohio College of Medicine. He holds several patents related to medical devices, and is the founder of a medical device company. He also serves as a spokesperson for the American College of Emergency Physicians, and was previously a commissioned officer in the U.S. Navy and a medical officer with the 2nd Marine Division, primarily in U.S. Marine Special Operations.

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As the U.S. health care system shifts toward value-based payments, more hospitals are entering into risk-sharing arrangements with public and private insurance companies. As a result, emergency departments are increasingly playing a larger role in population health management.

Your hospital may be part of a “bundle,” for example. You have probably heard your emergency department and hospital leadership discussing this term. A bundle is a CMS-designed payment program where health care “organizations enter into payment arrangements that include financial and performance accountability for episodes of care. These models lead to higher quality and more coordinated care at a lower cost of Medicare,” according to the Centers for Medicare and Medicaid Services (CMS), which developed these bundled payments for care improvement that are a part of the Affordable Care Act.

CMS developed several different models, and your hospital has likely subscribed to one of them. They involve a retrospective bundled payment arrangement where actual expenditures are reconciled against a target price for an episode of care. That episode of care includes the inpatient stay plus post-acute treatment and services up to 90 days after hospital discharge. This is why it's important to keep patients healthy so they are not readmitted. Under these retrospective payment models, Medicare continues to make fee-for-service (FFS) payments; the total expenditures for the episode is later reconciled against a bundled payment amount (the target price) determined by CMS. A payment or recoupment amount is then made by Medicare, reflecting the aggregate expenditures compared with the target price.

The most common bundles currently are congestive heart failure, stroke, asthma/COPD, and others. Population health management efforts task emergency departments with being proactive in identifying, treating, and coordinating the best care at a lower cost. CMS will reward (or not penalize) your hospital for providing awesome care. The numbers are staggering. About 500,000 readmissions were made in 2013, totaling $7 billion in aggregate hospital costs for four high-volume conditions—acute myocardial infarction, congestive heart failure, COPD, and pneumonia. One can just imagine what that cost will be in 2018.

Let's take congestive heart failure, for example. The treatment of chronic congestive heart failure is one of Medicare's most expensive disease processes. Approximately 134,500 readmissions were made for congestive heart failure in 2011, according to the Agency for Healthcare Research and Quality. If your health care organization is in the congestive heart failure bundle, your emergency department plays a vital role in reducing preventable readmissions, optimizing the care of the patient (perhaps by giving additional diuretics), having a cardiology consult in the ED, coordinating home care efforts, and completing other tasks that help optimize the patient's care and keep the patient out of the hospital. Let's say, however, that our patient with congestive heart failure actually gets diagnosed with pneumonia. In that case, generally speaking, the hospital is not penalized for admitting that patient because a new diagnosis (pneumonia) is actually the primary reason the patient is getting admitted.

A number of tools are at your disposal from your electronic health record system (EHR). Most, if not all, EHRs are now using or will be using data analytics to help identify these patients upon admission to the ED. From that point, the patient gets identified, and the care initiates. Frequently, a case manager and even home health care agencies get involved from the start.

Most emergency physicians I know feel they are the custodians of providing timely, cost-effective care. The new bundled payment initiatives provide us with a chance to make a significant impact on reducing the cost of care while providing great care to our patients.

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