Barbara G. Tauscher, MHA, FACMPE
The Oregon Clinic South
and
Joseph Vicari, MD, MBA, FASGE
Rockford Gastroenterology Associates
Barbara G. Tauscher, MHA, FACMP
Joseph Vicari, MD, MBA, FASGE
Bundled medical payments refer to the grouping of different medical services “bundled” into a predefined episode of care.1 Bundled payments in health care are not a new concept. In the early 1980s, Medicare introduced a form of bundled payments for Part A expenses on inpatient hospital care. Bundled payments can be used for inpatient and outpatient episodes of care. In gastroenterology (GI), bundled payments offer the opportunity to increase revenue in the ambulatory endoscopy center (AEC) while maintaining delivery of quality endoscopic services.
Strategies and opportunities. Participation in bundled payments requires a new set of analytic and organizational capabilities.2 A few strategies can assist practices in developing a process for implementing bundled payments in their practice. Begin by identifying the patient population for inclusion in bundled payments. GI groups should focus on shifting the site of service for procedures from the higher cost hospital outpatient department to the lower cost AEC. Next, identify opportunities to reduce expenses and maintain or improve quality and outcomes.2 Finally, promote the delivery of lower cost and high-quality endoscopic and ancillary services provided at the AEC to health care payers and consumers.
Payers are looking for opportunities to predict their “spend” for specific episodes of care. For screening colonoscopies, payers see charges ranging from a single charge (CPT code 45378) to one that includes multiples charges (possibly CPT codes 45380 and 45385), plus pathology and sedation charges. If there are complications, the payers may be required to pay for emergency room and hospital charges if the patient experiences a perforation or GI bleed.
Successful implementation of bundled payments is strengthened with in-house practice management expertise including a physician champion, clinical administrator and business administrator.
A case in point. In 2016, a large GI group attempted to enter into a bundled payment agreement with one of their largest payers, which was part of an integrated health care system. The integrated health care system included hospitals, primary care groups and an insurance company (payer).
The GI group wanted to secure the referrals from the integrated health system’s primary care groups, eliminate the prior authorization process to allow sedation services for screening colonoscopy patients and reduce the need to bill the patient by having 100% of the screening colonoscopies paid by the payer and not applied to the patient’s deductible. The payer agreed to add the reimbursement for sedation services to the allowable for colonoscopy procedures, which removed the need for prior authorizations.
The payer requested that the GI group pay for any hospital expenses for known complications (perforations, bleeds and aspirations). The GI group did not agree to this and did not purchase additional insurance to cover these expenses.
The agreed-upon fee was substantially lower than the GI group’s average allowable for a combined procedure of CPT codes 45380 and 45385 but did include an additional sum for sedation services. The GI group felt the reduced fee was appropriate, as there would be minimal risk of the patient’s account being sent to collections, thus reducing the expense associated with collecting the patient balance.
After only a few weeks, the GI group noted that many of the screening colonoscopy claims were not paid by the payer and were applied to the patient’s deductible. When the payer investigated the claims, it was found that many of the patient plans were still under the “grandfather” provisions, and those plans were not required to cover screening colonoscopies at 100%. During a meeting with the payer, the payer admitted that even they did not realize how many of their plans were “grandfathered.” The bundled payment project was quickly abandoned.
Final pearls. As payers begin to develop specific plans to control costs and demonstrate quality, GI groups may want to explore bundled payment arrangements. By offering a bundled colonoscopy package to a “narrow network” plan, the GI group will reduce or eliminate the risk of having the bundled service applied to the patient’s deductible since the bundled contract would be offered to a select group of patients versus a wide variety of employer and individual plans. Successful implementation of bundled contracts can increase colonoscopy volume and revenue for GI groups while reducing expenses for payers. GI groups should carefully review their claims data to understand the average cost and reimbursement for each episode of care (i.e., screening vs. surveillance colonoscopies) when developing bundled contracts.
Bundled payments, although not new in health care, provide an opportunity for GI groups to increase endoscopic volume, increase revenue, and maintain quality care and outcomes. For payers and health care consumers, significant cost reductions can be achieved when participating in a bundled payment program. Bundled payments can be a “win-win” for providers, payers and health care consumers.
References
Siddique SM, Mehta SJ. Market evaluation: Finances, bundled payments, and accountable care organizations. Anesthesiol Clin. 2017;35:715-724. doi:10.1016/j.anclin.2017.08.005
Mehta SJ. Bundled payment for gastrointestinal hemorrhage. Clin Gastroenter Hepatol. 2016;14:1681-1684. doi:10.1016/j.cgh.2016.06.013
Barbara Tauscher, MHA, FAMCPE is the director of operations–GI South for The Oregon Clinic, the largest multispecialty group in Oregon. Joseph Vicari, MD, FASGE joined Rockford Gastroenterology in 1997 and has served as managing partner. He previously served as chair of the ASGE Practice Operations Committee and currently serves as councilor on the ASGE Governing Board.