Written by guest blogger Susan J. Penner, RN, MN, MPA, DrPH, CNL, author of Springer Publishing Company's text, Economics and Financial Management for Nurses and Nurse Leaders, Second Edition, 2013, and adjunct faculty at the University of San Francisco School of Nursing and Health Professions.

Part 1 of this three-part series explains how bundled payments encourage providers to work together and improve care quality over a patient’s episode of care.  Part 2 provides an example of an evidence-based case rate (ECR) used to budget for bundled payments, and to estimate shared savings or risk.  This final post discusses where you’ll find bundled payments, and how they might affect you and where you work.

Settings Implementing Bundled Payments

ACOs. The Affordable Care Act (ACA) includes provisions establishing Accountable Care Organizations (ACOs) to improve care coordination and better control health care costs.  ACOs are required to implement bundled payment financing.  This is important, because ACOs are growing and spreading rapidly across the U.S.  According to Leavitt Partners, as of December 2015 there were 782 ACOs, with an estimated 23 million covered lives.  ACO growth will spur the growth in the use of bundled payments.

Hospitals. The Center for Medicare & Medicaid Services (CMS) is pushing hospitals to adopt bundled payment models, even if the hospital is not part of an ACO.  The CMS Innovation Center developed the Bundled Payments for Care Improvement (BPCI) initiative, with several bundled payment models under implementation by hospitals across the U.S.  As of January 2016 over 400 acute care hospitals are participating in this initiative.

Other providers.  Skilled nursing facilities, physician group practices, home health agencies, inpatient rehabilitation facilities and long-term care hospitals are all participating in collaboration with hospitals in the BPCI initiative. In 2011, Medicare implemented bundled payments for the financing of end-stage renal disease (ESRD) services, both for ESRD facilities and for home care of ESRD.  Physician group practices and other health care providers are also collaborating with hospitals as ACOs using bundled payment financing.  This financing strategy therefore encompasses a wide range of health care settings across the nation.

How Does This Affect You?

Health care professionals are increasingly likely to be affected by the move to bundled payments.  Your institution, agency or practice may become part of an ACO, or part of your local hospital’s bundled payment initiative. Private health plans often emulate Medicare innovations, so in the future more payers might adopt bundled payment approaches.  In addition, you and your family might be provided health care services through an ACO or other setting using bundled payments, and experience the efforts to better coordinate care through innovative financing.

Bundled payment models reinforce that health professionals need to collaborate.  For example, a physician’s care is critical in managing patient care episodes, but the entire interdisciplinary team is critical to the success of bundled payments.  If physicians aren’t working with the nurses, therapists and other professionals across the patient’s episode of care, the goals of bundled payments may not be achieved.  Each professional discipline must make high-quality and cost-effective contributions.  As the saying goes, “There is no ‘I’ in ‘bundled payments.’”

By now, you should have at least an overall understanding of the mysteries of this new health care financing innovation.  You now realize that bundled payments may be affecting you, your family and your employer either now or in the near future. You should be better prepared to meet this new challenge and opportunity.

My book is a resource for learning more about health care finance, budgeting and innovations such as bundled payments. A third edition of this book is currently in progress, to be published over the coming year, with new and updated information.  These are exciting times in health care, so be prepared for change!