Skilled Nursing Providers Have Mixed Feelings on Bundled Payments

Less than two-thirds of acute and long-term care providers have found that bundled payments both lower costs and improve care, according to a new survey, though the company behind the numbers says it’s a little more complicated than that.

Archway Health, a Watertown, Mass.-based firm that advises health providers on bundled payment models, asked 70 participants — including skilled nursing facilities, other post-acute providers, and home health agencies — about their experiences with the Centers for Medicare & Medicaid Services (CMS) BPCI program, which provides interconnected reimbursements to multiple providers for a single episode of care.

Of those respondents, 75% said that participating in a bundled program helped improve quality of care regardless of the financial impact, but just 63% said they achieved the dual goal of providing better care at a lower cost.


Dave Terry, Archway’s founder and CEO, said that the seemingly low number could be related to survey methodology. Specifically, some respondents might not be participating in a bundled payment program, or they might have misunderstood the question.

“Of folks who actually participated, [if you asked], have you seen improved quality and reduced costs, I think you’d see both,” Terry told Skilled Nursing News. “This is a pretty broad audience, who might be getting ready to participate.”

As for the high percentage of participants who said that bundled payments improved care, Terry said bundled payments are superior to Accountable Care Organizations (ACOs), which he characterized as less targeted.


“In an ACO, you’re responsible for the wellness and all of the health care needs of a very broad and diverse population,” Terry said. “Most of them are just fine, and you don’t know necessarily who in that population is going to have needs this year, and what those needs are going to be.”

With bundled payments, meanwhile, providers know exactly the type of health problem they’re being tasked to treat and can develop a plan accordingly — such as a person recovering from a joint replacement or cardiac issue.

“We know that this patient is sick, and has specific needs, and we know what that illness is,” Terry said. “We can build a specific care team around that patient, and provide services over a discrete period of time.”

Changes ahead

Terry also expressed optimism about upcoming changes to the bundled payment program. Back in August, CMS floated a plan to end the proposed Cardiac Rehabilitation incentive payment model, and scale back the Comprehensive Care for Joint Replacement (CJR) initiative by reducing the number of geographic areas from 67 to 33.

At the time, industry groups such as LeadingAge and the American Health Care Association applauded the moves, emphasizing that the industry needed more time to digest the changes. While SNF providers have been skeptical of bundled payments, noting that the programs could encourage the use of lower-cost home health services, AHCA expressed support in theory for bundled payments — just not mandatory ones.

“Our members do not oppose bundling payments in general, but we cannot support mandatory demonstrations or models where we are not meaningfully included,” AHCA president and CEO Mark Parkinson said in response to the CMS bundled-payment pause.

Terry agreed that voluntary problems are preferable, and laid out some potential benefits for participation among SNFs.

“We think CMS has done a great job. They continue to learn and get feedback from the market, and we expect the next version to have real improvements over the previous version,” Terry said.

For instance, if a SNF files a non-binding indication of interest with CMS about potentially participating in bundled payments, it will receive detailed information about its cost and quality performance relative to competitors.

“Even just looking at the programs and the data is valuable from a strategic perspective,” Terry said. “And once you get to look at it, you can make choices about which episodes, how much risk you want to take.”

Terry’s company has worked with a number of SNFs and home health agencies, he said, and the benefits have been concrete.

“In addition to saving money, they’ve learned a lot about moving from fee-for-service to value,” he said.

Written by Alex Spanko

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