Danger Will Robinson, Danger: A Robot’s Advice in Bundled Payments

The 1960s TV space adventure Lost in Space featured a benevolent robot that had the ability to sense danger before any of its human counterparts did. This Class B-9-M-3 General-utility Non-Theorizing Environmental Control Robot known as Robot, offered sage and timely advice to the crew of the lost space ship Jupiter 2, as they bumped around the galaxy. Some have said that CMS needs a benevolent robot to offer guidance as it bumps around the unsettled healthcare universe.

Bundled Payments for Care Improvement (BPCI) developed by the Center for Medicare and Medicaid Innovation is a program that would benefit from “robotic insight.” Fundamentally the program is sound except for the fact that the payment methodology is a volume-driven payment model and disconnected from the ACO process.

For example, the Comprehensive Care for Joint Replacement (CJR) set in motion by the final rule on December 1, 2017, seeks to make quality and financial sense out of the over 400,000 joint replacement procedures done in the United States each year. These lower extremity operations cost over $7 billion for the hospital services alone. While it makes perfect sense to bring all the fee for service (FFS) participants together under target pricing, holding the group financially responsible for cost and quality, there is no formal effort to manage volume.

Hospitals have struggled for years trying to get their orthopedic surgeons to agree on a single prosthetic system to use in the facility for all joint replacement patients. Without a bundled payment agreement, the hospital has no financial leverage with the prosthetic vendors on price. It is amazing how quickly the surgeons became prudent hardware shoppers when these decisions affect the collective bottom line.

The BPCI is clearly an innovative idea in exposing cost and quality. Target pricing strongly focuses the group’s attention on better outcomes, reduced complications, and fewer readmissions. Smart hospital groups are reaching out to the community-based ACOs to engage the primary care physicians in helping manage the more complicated patients. Home health organizations are encouraged to work more collaboratively in the rehabilitation process. Skilled nursing facilities (SNF) have a newly-found accountability that works for the patients’ benefits.

Additionally, when an enlightened hospital fully engages the ACO physicians and their more comprehensive data analytic system and transitional care focus, the cost and risk of associated complications drops considerably. CMS Administrator Seema Verma said in a recent statement, “BPCI-advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and toward paying for value. Under this model, providers will have an incentive to deliver efficient, high-quality care. But wait, the robot is waving his arms, “Danger Seema, Danger! don’t forget about connecting with ACOs and managing volume as you build the bigger picture with bundled payments.”

Craigan Gray

About the Author

Craigan Gray, MD, MBA, JD

Dr. Craigan Gray, Salient Healthcare’s Chief Medical Officer, brings rich experience from private practice, hospital leadership, and governmental health-benefit programs. Prior to joining Salient, Dr. Gray was director of North Carolina’s $12 billion Medicaid program. His time as VPMA at Bon Secours Our Lady of Bellefonte Hospital in Kentucky was distinguished by moving the facility into the top-quality performance tier for Health Grades and CMS health quality indicators. Dr. Gray is a Stanford University trained Obstetrician/Gynecologist. In addition to an MD degree, Dr. Gray holds an MBA degree and a JD degree. He is a Certified Physician Executive and is published in various medical journals.

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