Attention bundled payment critics: Curb your enthusiasm

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John O'Connor
John O'Connor

A recent study found that bundling Medicare payments can dramatically cut costs without sacrificing quality.

But the man likely to be the next Health and Human Services secretary is no fan of this new approach. And quite a few long-term care operators are similarly predisposed. One reason: Many of those Medicare dollars will be saved by removing skilled care services from the post-acute picture.

The study in question was somewhat limited in scope, addressing just the way Medicare reimburses providers for joint-replacement care.

Under bundled payments, hospitals receive a set reimbursement to cover all surgery-related services. This includes patient prep and up to 90 days of post-acute care. Authors said they were encouraged by the way this approach can help on the fiscal and quality fronts.

But the president-elect's choice to run HHS is not exactly sold. Tom Price, an orthopedic surgeon and Republican Georgia congressman, has called the shift “experimenting with Americans' health.” It's an accusation many long-term care operators might want to repeat, given the fiscal damage bundled payments could eventually inflict.

Then again, they may not have to say much at all. Obamacare's pending ride to oblivion will likely include bundled payments as a traveling companion. And judging by the swift actions of our newly installed Congress and the promises by our president-elect, that funeral procession might not be far off.

Ironically, CMS announced on Dec. 20 that it would expand the bundled payment approach to treatments for heart attacks, bypass surgery and cardiac rehab — beginning in July. All things considered, that appears to be an extreme case of wishful thinking.

But as Momma used to say, the devil you know may be better than the one you don't know.

Yes, bundled payments might go away. And, yes, that might forestall Medicare reimbursement cuts. At least for now.

But pressure to reduce health outlays will only increase in the years ahead. Such pressure will undoubtedly give way to new “solutions.” And some of those future fixes might be far more painful than bundled payments.

Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.