Design and impact of bundled payment for detox and follow-up care

Abstract

Introduction Recent payment reforms promote movement from fee-for-service to alternative payment models that shift financial risk from payers to providers, incentivizing providers to manage patients’ utilization. Bundled payment, an episode-based fixed payment that includes the prices of a group of services that would typically treat an episode of care, is expanding in the United States, including mandatory models in Medicare. Bundled payment has not been developed specifically for substance use disorder (SUD) treatment. Yet, bundled payment has been recommended as a way to pay for comprehensive SUD treatment and has the potential to improve treatment engagement after detox, which could reduce detox readmissions, improve health outcomes, and reduce medical care costs. However, if moving to bundled payment creates large losses for some providers, it may not be sustainable. The objective of this study was to design a bundled payment for detox and follow-up care and to estimate its impact on provider revenues. Methods Massachusetts Medicaid beneficiaries’ behavioral health, medical, and pharmacy claims from July 2010–April 2013 were used to build and test a detox bundled payment for continuously enrolled adults (N=5,521). A risk adjustment model was developed using general linear modeling to predict beneficiaries’ episode costs. The projected payments to each provider from the risk adjustment analysis were compared to the observed baseline costs to determine the potential impact of a detox bundled payment reform on organizational revenues. This was modeled in two ways: first assuming no change in behavior and then assuming a supply-side cost sharing behavioral response of a 10% reduction in detox services and an increase of one individual counseling and one group counseling session. Results The mean total 90-day detox episode cost was $3,743. Nearly 70 percent of the total mean cost consists of the index detox, psychiatric inpatient care, and short-term residential care. Risk mitigation, including risk adjustment, substantially reduced the variation of the mean episode cost. There are opportunities for organizations to gain revenue under this bundled payment design, but many providers will lose money under a bundled payment designed using historic payment and costs. Conclusions Designing a bundled payment for detox and follow-up care is feasible, but low case volume and the adequacy of the payment are concerns. Thus, a detox episode-based payment will likely be more challenging for smaller, independent SUD treatment providers. These providers are experiencing many changes as financing shifts away from block grant funding toward Medicaid funding. A detox bundled payment in practice would need to consider different risk mitigation strategies, pooling providers, and an increased reimbursement rate, but could incentivize care coordination, which is important to reducing detox readmissions and engaging patients in care.

National trends and characteristics of inpatient detoxification for drug use disorders in the United States

“…This study provides newer national-level estimates for inpatient drug detoxification, and our results suggest a similarly low level of rehabilitation service use during inpatient detoxification. The low utilization of additional DUD treatment during inpatient detoxification may be related to a high hospital treatment cost and/or a lack of an infrastructure or organizational support to promote DUD treatment [ 10 , 42 , 43 ]. Since the 1980s, some health plans (e.g., managed care) have sought to reduce the cost of DUD treatment by shifting inpatient care toward outpatient care [ 44 ].…”

“…Only 9% of those with inpatient drug detoxification in this sample were transferred at discharge, and up to 14% were considered as DAMA. They demonstrate a need to identify barriers (e.g., patient, health system, financial factors) to receiving further DUD treatments and to develop effective strategies to link the detoxification patients with outpatient or specialty treatment services for improving the continuity of DUD care [ 7 , 43 ]. Acevedo et al [ 42 ] indicated that the financial incentives or electronic reminders to medical agencies had an effect on increasing treatment use after detoxification among residential facilities.…”

Reshaping health care governance using pilot projects as public policy implementation instruments

“…In this literature, one can read that fee-for-service rewards volume instead of quality of care Hirsch et al, 2015) and can therefore hinder the implementation of integrated care based on a global patient-centred approach. A bundled payment system would seem more appropriate according to the scientific literature (Quinn et al, 2017). Bundled payment actually refers to, "a fixed payment that includes the prices of a group of services that would typically treat an episode of care in a defined period of time" (Quinn et al, 2017, p. 114).…”

Evaluating the feasibility and impact of case rate payment for recovery support navigator services: a mixed methods study

“…More recent data from the Massachusetts Behavioral Health Partnership (MBHP), a Beacon Health Options company which manages behavioral health for many Massachusetts Medicaid enrollees, found that 57.7% of those receiving detox services in FY2011 had two or more admissions that year, and that this group of “repeaters” accounted for 87% of all detox admissions that year [ 6 ]. Repeated admissions to detox without engagement in follow-up care represent lost opportunities for recovery, highlight inadequate access to a limited resource, and come at significant human and financial costs [ 5 , 7 , 8 ].…”

“…SUD treatment typically pays fee-for-service (FFS), which has both strengths and weaknesses. FFS payments incentivize more care and provide higher payments for clients needing more care [ 7 , 12 , 13 ]. FFS payments do not reward quality care and restrict the scope of services covered (e.g.…”