Bundled Payment Initiative:
Your time to get ahead of the crowd?
Paul Lee, Sharon Cheng, Marian Lowe
Strategic Health Care
September 29, 2011
Facilitating Change
 Test new payment and service delivery models
 Work across Medicare, Medicaid, and CHIP programs
 Expand the scope and duration of models proven effective
IF those models are proven to also lower costs.
 $10B in direct spending for 2011-2019
Innovation Center Projects
Comprehensive Primary Care (CPC)
Initiative
 Multi-payer initiative to test new service delivery and payment
models
 Monthly care management fee to primary care practices,
opportunity for shared savings
 5-7 localities will be selected
Criteria
 For physicians: 60% of patients must be in participating plans &
Medicare, use EHR, have at least 200 FFS Medicare patients
 For plans: Commit to contracts with participating practices that
offer shared savings; provide attribution methodology with CMS
Deadline: LOI due November 15; Application due January 17
5 Reasons to Participate
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Leadership opportunity
Align payers
Promote services
Decrease readmissions, unnecessary services
Physician partnerships
Cautions
 Medicare margins are thin
 You are unlikely to beat your 2009 baseline
 You need funds to begin care redesign
Deadlines
 Letter of intent
 Model 1: October 6, 2011
 Models 2, 3, and 4: November 4, 2011
 Application
 Model 1: November 18, 2011
 Models 2, 3, and 4: March 15, 2012
Four options for participation
Services
Risk
Goal
Model 1
Part A inpatient
Low: 0-2%
discount, welldefined bundle
Align physicians
through
gainsharing
Model 2
Part A inpatient,
Part B, including
post-acute, DME,
and Part B drugs
Medium: 2-3%
discount; 30, 60 or
90 day
complicated
bundle
Offset revenue lost
with reduced
readmissions,
other
improvements
Model 3
Post-acute Part A
and B, including
DME and Part B
drugs
High: 2-3%
discount; long,
undefined bundle
Offset revenue lost
to lower-intensity
post-acute care
Model 4
Part A inpatient
and professional
services during the
stay
Medium: 3%
discount; short,
discrete bundle
Align physicians,
reduce inpatient
costs
Have we seen this unicorn?
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Gainsharing Demo
MedPAC and CBO models
CARE tool research
ACE Demo
Designing the bundle
 CMS will provide dataset of fee-for-service
Medicare claims, 2009
 Use clinical logic to define related claims and
choose the length of the episode
 Determine bid amount
 Propose quality measures
Strong applications
 Offer significant savings
 Affect many beneficiaries and conditions
 Scalable and replicable
 Include other payers
 Incorporate IT
 Are “shovel ready”
Opportunities for assistance
 SHC can help prepare you for bundling
 Evaluate your readiness to participate
 Prepare the letter of intent
 Prepare the data use agreement and work with you to analyze
CMS administrative data
 Prepare or review and provide feedback on applications
For Assistance
Gwen Mathews, Partner
Strategic Health Care
202.266.2600 gwen.mathews@shcare.net