Louisville Medicine Volume 64, Issue 5 | Page 17

While this risk based payment is complicated, it does remove one of the major concerns in a capitation model. With the latter, payment is population-based but that puts the physician or group as the bearer of financial risk. Payment without risk adjustment assumes that there is an equal distribution of people who have significant health needs and those who minimally use medical resources. But one doctor’s population is not likely to be the same as that of another. So in capitation, doctors who have a “higher needs,” less healthy population will be disadvantaged. Frank Opelka, MD, the former medical director of the American College of Surgeons and the Louisiana State University (LSU) Executive Vice President for Healthcare Redesign, has long held that physicians should bear the risk for clinical outcomes but not the insurance risk. Bundled Payments are built around the risk of the individual patient and not population financial risk that capitation represents. That is a big difference. A concern raised by hospitals and payers is that there may be cherry-picking of patients so patients may be hurried into the bundle prior to all conservative measures being performed. As an example a patient may be proposed for a total knee replacement when he has not yet been tried on injectable hyaluronic acid or an unloading brace. To reduce the incidence of that, Medicare will probably risk-adjust the bundle so that premature surgeries will not have a high margin. Commercial insurers will use their prior authorization criteria to prevent what they believe are inappropriate surgeries. Bundled payments may appear very complicated, but most offices have to deal with a myriad set of reimbursement schemes already with fee-for-service. Bundles should not be more complicated than what we have now. The future direction with the Advanced Payment Models may be the one in which the bundled payment option may be the easiest to understand and participate in. References 1.) Porter ME, Kaplan RS, How to pay for health care. Harvard Business Review, July-Aug. 2016:88-100 2.) CMS.GOV, Bundled Payments for Care Improvement (BPCI) Initiative: General Information, https://innovation.cms.gov/ initiatives/bundled-payments/ (last accessed Aug. 23, 16) 3.) O’Byrne TJ, Shah ND, Wood D, Nesse RE, Killinger PJ, Litchy WJ, Stroebel RJ, Wagie AE, Naessens JM. Episode-based payment: evaluating the impact on chronic conditions. Medicare Medicaid Res Rev. 2013 Sep 13;3(3). Dr. James is the chief medical officer for Baptist Health Plan and Baptist Health Community Care. OCTOBER 2016 15