Cheri Bankston


The Centers for Medicare & Medicaid Services’  testing of the Bundled Payments for Care Improvement initiative has been largely successful. For hospitals and healthcare facilities operating under this payment model, costs are falling, hospital stays are shortening, and patients’ overall health is improving.

The healthcare community can expect opportunities to participate in more, similar programs. That’s a good thing because bundled payment models represent a huge opportunity to build quality and value into the industry, especially for post-acute care providers. Much of the success in the voluntary BPCI initiative came from a reduction in length of stays at skilled nursing facilities and long-term rehab centers, and a reduction in readmissions from PAC, a strong indicator of quality.

So what can post-acute facilities do to prepare for the next iteration of bundled payment rules?

PAC facilities that want to succeed in bundled payment models need to examine the incentives that bundles create across the acute and post-acute spectrum, and tailor their workflows to those drivers. Providers should use data to understand their strengths, and how those strengths play into their objectives. These themes can be woven together with strong communication between patients (and their families), PAC facilities, hospitals, and clinicians.   

Understand the incentives

While many readers might be familiar with the broad outlines of bundled payments, they’re worth reviewing to understand how BPCI can transform the incentives for acute and post-acute providers.

Under BPCI, the industry is moving away from the traditional fee-for-service model toward value-based care, meaning payments are no longer based on the number of services a patient receives. Proponents of bundled payments believe models provide incentives for providers to reduce waste and inefficiency by focusing on outcomes and quality of care, rather than the number of services.

Much of the cost of care is incurred after a patient leaves the hospital. In bundled payments, PAC costs and readmissions are factored into the total.

With that shift, hospitals have turned their attention to building stronger relationships with PAC facilities. Hospital executives want to know which facilities excel, and which have outstanding patient outcomes. The financial incentives for providers may drive much of the rationale, but at the end of the day, high-quality outcomes for patients will speak for themselves.

Use data to unlock improvements

Hospital and healthcare facilities should, at a minimum, become familiar with their own data, including:

  • Discharge disposition sorted by level of care: The percentage of PAC patients discharged home with no services, those assigned to a home health agency, and those discharged to another facility
  • Readmission rates: The percentage of patients readmitted to the hospital, and any trends that are identifiable among those patients
  • STAR ratings: Includes staffing and quality measures
  • Length-of-stay metrics across diagnoses: Special programs produced by the facility, as well as whether the facility excels with specific diagnosis-related groups

Providers can use this data to identify areas of excellence, as well as opportunities for improvement. Executives should proactively engage referring hospitals and provide them with the transparency needed to improve the partnership.

Communicate with stakeholders

The PAC facilities that best adapt to bundled payments are the ones that understand how big of an impact the change in incentives can have. It’s important for staff at all levels of care to understand the changes will result in better patient outcomes, because when the clinical team can see an impact on patient care, the new program is easier to adopt.  

In one example we’ve seen, representatives of a SNF joined a local hospital’s internal meetings on readmissions reductions. Through this, the team built better care pathways for heart failure, COPD, and sepsis to be more responsive to that population, which led to significant improvements in the process and patient care.

Another SNF began helping patients schedule follow-ups before discharging them. The facility relied on data that showed patients who failed to see their primary care physician after discharge were much more likely to face readmission or other complications. In one situation, though the patient initially was reluctant, care coordinators and SNF staff guided her through the process with clear expectations, resulting in a successful discharge and positive experience for the patient.

These examples all involve executive leadership that was prepared to have open and transparent discussions about outcomes with their counterparts at referring hospitals and how they could succeed together. They also communicated these expectations to employees in patient-facing roles.

No, really. It’s all about communication.

Bundled payments mean change, and the PAC facilities that excel work closely with the referring hospitals and their own staff. Facilities that don’t communicate and don’t educate their staff on why it’s important to drive quality outcomes often don’t achieve optimal results.

PAC facilities that are willing to come to the table and work hard to do everything in the best interest of the patient will succeed under bundled payments in more ways than one.

Cheri Bankston is the Senior Director of Clinical Advisory Services for naviHealth, a Cardinal Health company.