Ask the Payment Expert about ... bundled payment initiatives

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Ask the payment expert ... about the observation stay loophole
Ask the payment expert ... about the observation stay loophole

How do bundled payment initiatives affect my facility?

You may be in one of the 64 MSAs (labor markets) that are involved in the new Comprehensive Lower Joint Replacement bundle that was to go into effect on April 1.  

If you are in one of those areas, hospitals will be responsible for the cost of care for up to 90 days post-hospital discharge. At the end of the year, the hospital charges will be compared to the anticipated charges and if they are higher, the hospital will be required to pay money back to Medicare. If their charges are lower, they will receive a payment from Medicare. 

Hospital systems will be looking for skilled nursing facilities that provide cost-effective, high-quality care. You need to be tracking your cost of care so you can show the hospital system that you are a preferred provider for their system.

What if you are not in the CLJR bundle areas? Many other bundled payment initiatives are in place or being developed by the Centers for Medicare & Medicaid Services. You can look at the CMS Innovation Center at to find any that are in effect in your state.  

At the same time, even if you do not have an initiative in place now, you need to know they are coming.  

Begin looking at your length of stay for Medicare residents, and the cost of care. As you create a scorecard for quality metrics, include that average cost of care and average length of stay as components.

Also, make sure you are meeting with your hospital referral sources and other post-acute providers to discuss critical pathways. Consistency in these clinical pathways can help to prevent rehospitalization, provide more consistency and better outcomes for your residents. This can result in lower cost of care for you and the hospital system.