Tag: Bundled payment

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Bundled payment, also known as episode-based payment, episode payment, episode-of-care payment, case rate, evidence-based case rate, global bundled payment, global payment, package pricing, or packaged pricing, is defined as the reimbursement of health care providers (such as hospitals and physicians) “on the basis of expected costs for clinically-defined episodes of care.” It has been described as “a middle ground” between fee-for-service reimbursement (in which providers are paid for each service rendered to a patient) and capitation (in which providers are paid a “lump sum” per patient regardless of how many services the patient receives).

Advocates of bundled payments note that unlike fee-for-service, bundled payment discourages unnecessary care, encourages coordination across providers, and potentially improves quality. Unlike capitation, bundled payment does not penalize providers for caring for sicker patients. Bundling payment provides additional advantages to providers and patients alike, through removing inefficiency and redundancy from patient-care protocols; e.g. duplicate testing, delivering unnecessary care, and failing to adequately provide postoperative care.

This method of payment is also said to provide transparency for consumers by fixing pricing and publishing cost and outcomes data. Patients would be able to choose a provider based on a comparison of real data, not word of mouth. Bundled payments may also encourage economies of scale – especially if providers agree to use a single product or type of medical supply – as hospitals or integrated health systems can often negotiate better prices if they purchase supplies in bulk.

On the other hand, the scientific evidence in support of it has been described as “scant.” It does not discourage unnecessary episodes of care; for example, physicians might hospitalize some patients unnecessarily.

Providers may seek to maximize profit by avoiding patients for whom reimbursement may be inadequate (e.g., patients who do not take their drugs as prescribed), by overstating the severity of an illness, by giving the lowest level of service possible, by not diagnosing complications of a treatment before the end date of the bundled payment, or by delaying post-hospital care until after the end date of the bundled payment.

Meanwhile, early evidence indicates that Medicare’s bundled-payment pilot, the Bundled Payment Care Initiative, has helped participating providers improve the quality of care while better managing healthcare costs. Should more detailed findings confirm these outcomes, Medicare could decide to expand the range of clinical services it wants covered by a bundled-payment arrangement.

Lab Industry to Confront Major Issues during 2015

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CEO SUMMARY: Will 2015 turn out to be a watershed year for the clinical laboratory industry? Not only are two federal agencies pushing forward with initiatives that will touch nearly every medical lab in the United States in the next 12 months, but other equally powerful trends continue to negatively influence the prices labs are paid for their testing services. All these factors make it essential for lab administrators and pathologist business leaders to work proactively to maintain their lab’s financial stability.

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Doctors at Johns Hopkins Improve Lab Test Utilization

CEO SUMMARY: Efforts to help physicians improve their utilization of clinical lab tests paid big dividends at the Johns Hopkins Bayview Medical Center in Baltimore, Maryland. Working collaboratively, physicians and the clinical lab team identified overused or needless cardiac biomarker tests, then designed interventions to improve how physicians used these tests. The result was a

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To Be Paid More, Labs Must Deliver More Value

GETTING PAID FOR LAB TESTS IS BECOMING A MORE URGENT PRIORITY for both clinical laboratories and anatomic pathology groups this year. Multiple factors are responsible for lengthening the collection cycle and reducing overall reimbursement for lab testing.

Clients of THE DARK REPORT have followed our coverage of this development. On one hand, payers are getting tougher.

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Pathologists Face Unsettling Times

THESE ARE UNSETTLING TIMES FOR PATHOLOGISTS, particularly those who practice in a private pathology group that serves one or more community hospitals. Blame it on healthcare’s unfolding transformation and the new aggressiveness of payers to cut the prices they pay for anatomic pathology services.

At the strategic level, healthcare’s acceptance of integrated care organizations like ACOs

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Better Data Needed to Support Pathologists as Consultants

MULTIPLE TRENDS ARE UNFOLDING that mutually reinforce the need for pathologists and PhDs to be experts and consultants in how physicians order and follow up on molecular diagnostics assays and genetic tests.

“Healthcare in the United States is approaching a tipping point that can greatly favor pathologists and PhDs as specialist consultants,” observed Katherine Tynan, Ph.D.,

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Labs, Path Groups Face Major Financial Issues

CEO SUMMARY: Are clinical labs and pathology groups ready for the end of fee-for-service reimbursement? That’s just one important question that will be answered at the upcoming Executive War College on Lab and Pathology Management that will take place in New Orleans on April 29-30. The American healthcare system is undergoing unprecedented transformation and sessions

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Medicare OPPS Rule Has Pitfalls for Labs

CEO SUMMARY: On January 1, the new Medicare rule for requiring bundled or packaged reimbursement for certain services covered by the hospital Outpatient Prospective Payment System (OPPS) became effective. Just four days earlier (on December 27), Medicare officials issued instructions on how hospitals and laboratories should bill for these services. The new rules trigger serious

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Laboratory Offers Early Lessons in Positioning for Success with ACOs

CEO SUMMARY: Accountable care organizations (ACOs) are already leading the shift from fee-for-service reimbursement to population payment. ACOs are leading healthcare’s evolution to preventive care, wellness, and better management of patients with chronic disease. This evolution will require that all providers, including clinical laboratories, must shift from delivering volume to producing value. In Phoenix, Arizona,

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