Cardiac bundles won’t hurt bottom line in majority of hospitals

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Government mandates often mean big—and costly—changes for hospitals. But in the case of the new Medicare cardiac bundled payment model, the impact will remain minimal for those hospitals required to participate, according to a new study.

As part of an apparent shift to value-based care, the Centers for Medicare and Medicaid Innovation (CMMI) announced a new bundled payment arrangement for Medicare patients admitted for heart attack and cardiac bypass surgery. Set to go into effect July 1, 2017, a bundled payment reimburses a healthcare provider a fixed fee for a specific length of care including an initial hospital stay and 90 days of post-discharge care. For now, bundled payments will be based on historical spending levels on a hospital-by-hospital basis.

According to an analysis by Avalere, 85 percent of hospitals that are required to participate in the program will not experience gains or losses greater than $500,000 per year.

CMMI wants to implement bundled payments in 98 randomly selected markets for the following types of cardiac care: coronary artery bypass surgery, heart attack patients being treated with drugs and other non-invasive therapies, and heart attack patients receiving percutaneous coronary intervention (PCI).

While the majority of hospitals will remain relatively unaffected, institutions with spending far exceeding the regional average could face severe penalties. High spending could be due, in part, to the fact that these hospitals are treating low-income patients without the means to prevent them from returning to the hospital for costly follow-up care.

In an attempt to curb that spending, hospitals will have to rely more heavily on data, care coordination and cost management techniques to deliver efficient cardiac care that works the first time around, said Josh Seidman, senior vice president at Avalere.

Avalere analyzed the distribution of spending between patients who underwent drug treatment and those who had percutaneous coronary intervention (PCI). Its results showed that 60 to 70 percent of spending for PCI are incurred during the initial hospital stay, whereas only 35 percent of spending for heart attack patients treated with drug were related to the hospital stay.

“[Hospitals] will be working more closely than ever with their physicians to streamline care and promote adherence to clinical guidelines,” said Fred Bently, vice president of Avalere, in a release. “And they will accelerate the development of high-performance post-acute networks to cut readmissions and achieve efficiencies for their medically-managed heart attack episodes.”