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What's the Outlook for Bundled Payments?

Apr 12, 2018

As you might be aware, the Obama administration advanced bundled payments as a cost-saving measure in Medicare and Medicaid treatment. These lump-sum amounts replace the long-standing fee-for-service models.

The rules require doctors to accept payment in predefined amounts for joint replacements and cardiac procedures. Around 800 hospitals are enrolled in the orthopedic program, and more than 1,000 are signed up to begin the cardiac program in 2018.

However, the Trump administration has signaled its intention to reduce or cancel these programs, or at least exempt more doctors from them. Further, in place of the Affordable Care Act’s nationwide mandatory experiments, the current administration is promoting smaller voluntary programs with doctors involved in creating them.

Former Health and Human Services secretary Dr. Tom Price explained this move by saying that the ACA was trying to “commandeer clinical decision-making.” He had begun to shrink the orthopedic and cardiac programs before he resigned, and his successor may well keep to the same course.

The Centers for Medicare and Medicaid Services has also declared for giving doctors a greater voice in setting pay rates. It has invited the AMA to submit new recommendations on Medicare payments.

The scope of the proposed changes is illustrated by the stated goals of the Obama administration. It aimed to shift fee-for-service Medicare payments to quality-of-care payments by 30 percent in 2017 and 50 percent in 2018.

But doctors should not jump to the conclusion that bundled payments are over. The value-over-volume initiative passed Congress with bipartisan support in 2015. And while it’s clear that doctors’ voices will be heard more going forward, it’s too soon to expect that the current administration will entirely reverse this aspect of the ACA.

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