- The Centers for Medicare and Medicaid Services' (CMS) joint bundled payment model reduced spending by over $5,000 per episode, according to a study in JAMA Internal Medicine.
- In contrast, an August 2016 report from CMS showed mixed results, with orthopedic surgery bundles yielding savings of over $860 per episode while spinal surgery episodes actually increased costs.
- In December 2016, CMS finalized the cardiac and orthopedic mandatory bundle payments when it announced the addition of new alternative payment models (APMs).
The bundled payment system was intended to align physician incentives with medical outcomes as an alternative to the fee-for-service payment model. Results of the program have varied, making program participation appear to be risky for providers. CMS continues to forge ahead while additional data accumulate, allowing a clearer picture of the effects of the bundled payment model on cost and quality.
The researchers for the JAMA study saw prolonged hospital stays fall by 67% among 3,942 patients though readmissions and ED visits only decreased by 1.4% between June 2008 and June 2015. In addition, they saw "reductions in implant costs, down on average $1,920.68 (29%) per case, contributed the greatest proportion of hospital savings."
New bundled payment models proposed for heart attacks and bypass surgeries will begin to take effect in July 2017.
The agency has a lot riding on the outcomes of these programs given their push to tie payments to quality. Should the bundled payment approach fail to deliver quality and savings, the agency will risk putting the Medicare program in the crosshairs of the Trump administration, as well as losing general support for a promising alternative to the traditional fee-for-service system—a system in which rising costs are already pitting physicians and payers against one another.
"During a period in which Medicare payments for joint replacement episodes increased by 5%, bundled payment for procedures at BHS was associated with substantial hospital savings and reduced Medicare payments," the researchers concluded.