Illinois providers take part in federal bundled payment model

Illinois providers are well represented in a new bundled payment effort from the Centers for Medicare and Medicaid Services that aims to replace fee-for-service payments for certain episodes of care. The model went into effect Oct. 1 at more than 80 facilities in the state, representing some of its biggest systems.

Under the program, CMS pays providers a predetermined, fixed price for a particular episode of care. Providers make money if they keep total costs below the target price. They are at risk for a portion of the costs if they don’t.

“Participation gives us another way to measure our performance and an opportunity to understand how changes affect patients,” said Beth Edrington, senior vice president of systems consulting for Carle, which will use the new payment model for treatment of chronic obstructive pulmonary disease and angioplasty procedures at its Urbana hospital.

Dr. Carrie Nelson, system vice president of population health for Advocate Health Care, said the program offers “an opportunity to further enhance quality and care coordination, reduce the total cost of care for patients and reward providers for good performance.”

Providers can scale back their participation or leave the program completely in March if they find it’s not working for them. Jessica Walradt, program manager for value-based care with Northwestern Medicine, expects that’s an option that many providers will take.

“I believe many [bundled payment model] participants will use the March option to drop specific clinical episodes rather than terminate participation all together,” she said. “Many participants initially elected all 32 episodes with the intention to utilize the October 2018 to March 2019 time frame to further vet these conditions and ultimately winnow down their at-risk episodes to a smaller subset.”

Walradt said that Northwestern will “continue to assess which episodes of care are most appropriate for each of our hospitals.”

Some providers have expressed concerns that the target price CMS is using may not leave enough room for providers to produce savings. Walradt said conversations continue with CMS.

“CMS has not altered the target price methodology, but Northwestern Medicine appreciates the ongoing efforts by CMS to communicate with hospitals and health systems regarding the [bundled-pay program],” Walradt said. “We look forward to continuing dialogue between health systems and CMS to evolve and enhance the program so that it can be successfully operationalized to improve the quality of care for patients while reducing spending.”