Bundled payments favor certain hospitals, analysis shows
- A research letter published online in JAMA raises new concerns that smaller hospitals and provider groups may be left behind in the move to value-based care.
- The authors looked at issues like organizational characteristics, volume, quality and spending among hospitals that achieved savings during the first year of the Comprehensive Care for Joint Replacement program and those that did not. CJR bundles payments for inpatient and 90-day post-discharge care for knee and hip surgery patients and rewards hospitals that exceed quality and cost benchmarks.
- “Savings” hospitals tended to be larger in size (a mean of 301 beds versus 230 for “nonsavings” hospitals) and have higher patient volumes. A total of 799 hospitals have participated in CJR since it launched in April 2016. Of those, 382 achieved savings and 417 did not.
Savings hospitals were also more likely to be teaching hospitals, nonprofit and integrated with a post-acute care facility. By contrast, nonsavings hospitals tended to be low volume (23% versus 2% for savings hospitals and safety-net hospitals (37% versus 22% that were savings hospitals), the analysis shows.
Case-mix severity was similar for both groups as was baseline quality; however, savings hospitals had slightly lower baseline spending.
The authors point out that Medicare recently implied low-volume hospitals in 33 metropolitan statistical areas could opt out of CJR. Participation would continue to be mandatory for most hospitals in the remaining 34 MSAs.
“Given this policy shift and its implications for the national debate about mandatory bundled payment, understanding how different hospitals fared in the first year of CJR is salient for policy makers, clinicians and healthcare organizations,” the research letter says.
The finding adds further weight to concerns that value-based care could bypass smaller hospitals and providers with fewer resources. Small and rural providers have repeatedly complained that their lack of capital and resources makes complying with MACRA reporting requirements a real strain financially.
CMS has taken notice, too. The MACRA final rule for 2018, released last fall, extended its exemption for small providers required to participate in the Merit-based Incentive Payments System to those with less than $90,000 in Medicare Part B charges or fewer than 200 Part B beneficiaries.
The agency projected about 934,000 providers would meet the exemption criteria for MIPS this year.