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One Service, One Payment: NOW They Tell Us…..

Posted by J. Paul Spencer, CPC, CPC-H in Industry Updates

In the human experience, there is an overarching idea that controls all of our thought processes known as “the common good”. As I tumble blindly down the hill of degeneration known as Growing Older, I’ve learned that “the common good” means vastly different things to different people, but one thing all of the divergent ideas have in common is the idea of personal sacrifice for improvement of the whole. Whether it is a farming commune, a church community or a governmental taxation system, personal sacrifice is is seen as the key ingredient on a promise of future gains, either in healthy crops, saved souls or roads without potholes.

It is with this idea in mind that I reviewed the latest CMS payment initiative, which was released on August 23rd. Entitled the Bundled Payments for Care Improvement Initiative, it offers four ways for caregivers to accept one bundled payment for an episode of care as a dangling carrot aimed at better care coordination and reduction of expenses. 

While there are four different payment models under the plan, I offer an illustrative example. A patient is in need of a hip replacement. The medical providers who treat the patient voluntarily negotiate one bundled payment with Medicare, covering all providers and services for the hip replacement. Under all four of the models (three offering retrospective negotiation of bundled payment, and one prospective), it would be up to the providers to determine how the one bundled payment is distributed among all of the entities involved with the patient’s care.

At first glance, I see this as another attempt to clarify and strengthen the ACO model. Farther down in fine print lies an enormous caveat, as noted in a brief article by FierceHealthcare this week. CMS states that preference for entering into a bundled payment arrangement will be given to providers who have at least 50% of their caregivers meaningfully using an electronic medical record (EMR). GIven where most hospitals are in the constructing of their particular ACO, this initiative comes a bit late.

Across the country, we have hospitals who are purchasing physician practices in the lead-up to ACO creation. As I communicate with people in this field, I am struck by the lack of due diligence exhibited by hospitals in selecting providers to hire. Most hospitals have no concept of how versed these physicians are in the use of an EMR, the quality of the provider’s documentation in its current form, the provider’s established billing patterns or the compliance risk to the facility of bringing on a particular doctor under the umbrella of the hospital. With respect to the EMR, as I have covered in previous posts here and here, use of an EMR may not signal the end of all compliance troubles, but a rather complicated beginning.

With the Bundled Payment Initiative giving preference to treating entities with high Meaningful Use percentages, hospitals may be regretting purchasing practices in the absence of this information, but it need not be a deal breaker. ACOs, by their very design, encourage a collaborative effort in the delivery of health care services. This idea needs to be applied not just to the care itself, but intangibles at the root of that care, such as the compliant use of an EMR.

The general idea behind the ACO model is that of the best ideas for low-cost care rising to the top. There are many paths to achieving ”the common good”, with human interaction and shared sacrifice being of paramount importance to the process. While this latest initiative might have assisted hospitals at the beginning of ACO formation by exponential factors had it been released earlier, better late than never.

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