Commercial payers benefit from bundled pricing

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Commercial payers benefit from bundled pricing

May 09, 2018
Business Affairs Insurance
An editorial by Shane Wolverton

As commercial payers seek strategies to lower costs and improve care quality, they are increasingly paying closer attention to bundled payments.

While many payers express concerns about the impact of recent regulatory reversals that removed mandatory requirements for bundled payments, the benefits of bundled pricing still resonate strongly throughout the commercial marketplace.

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In late 2017, CMS canceled mandatory bundled payment programs for cardiac care, and surgical hip and femur fracture treatment, along with the cardiac rehabilitation incentive payment model. CMS also switched participation requirements in the Comprehensive Care for Joint Replacement (CJR) model from mandatory to voluntary while reducing the selected geographic areas from 67 to 33.

The canceled mandatory bundles are expected to be replaced in 2018 with a voluntary program, called the Bundled Payments for Care Improvement Advanced (BPCI Advanced). Despite these uncertainties, astute commercial insurance leaders recognize the potential of bundled reimbursement programs. In fact, many health plans have already invested in these models after seeing positive results from CMS' demonstration models.

Outcomes improve when physicians are engaged in the process. In cardiac bundles to treat heart failure, for example, health systems experienced an average 9.9 percent savings, and 14 to 17 percent when cardiologists were in charge of the process. This demonstrates that meeting the needs of physicians in caring for their patients helps to optimize the bundled payment model, ensuring that it will factor into healthcare in years to come. Many healthcare organizations are scaling to meet increasing demand for this type of value-based care and ushering in greater competition.

Commercial payers drive improvements
As CMS withdraws, private payers and employers can rush in to meet the need, and gain from the benefits of healthcare bundled payments and other alternative payment models designed to drive down the cost of care.

Responding to market realities, commercial payers are likely to remain responsive to employers who face the growing burden of healthcare insurance costs. Employers recognize that they can no longer spread premium costs to employees but must find real solutions. As they continue to advocate for changes to healthcare delivery, payers will be forced to turn to providers and demand innovations – like bundled pricing.

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