Medicare’s Bundled Payment Models—Progress and Pitfalls

Abstract

In this Viewpoint, Joynt Maddox and colleagues consider how the bundled payment programs from the Centers for Medicare & Medicaid Services require close examination of benchmarks, market distortions, and health equity.

Association of Hospital Participation in Bundled Payments for Care Improvement Advanced With Medicare Spending and Hospital Incentive Payments

“…This is also the first investigation of how equitably the model distributes financial incentives. Results are consistent with findings that, in general, bundled payment models are associated with small or no reductions in clinical spending . Spending reductions are largely driven by cuts in postacute care as its utility is unclear for certain patients, and a reduction in its services does not directly affect hospitals financially .…”

“…Results are consistent with findings that, in general, bundled payment models are associated with small or no reductions in clinical spending . Spending reductions are largely driven by cuts in postacute care as its utility is unclear for certain patients, and a reduction in its services does not directly affect hospitals financially . In addition, the finding that bonus payments to participants exceeded the clinical savings has been observed in other payment models …”

Equity Implications of Hospital Penalties During 4 Years of the Comprehensive Care for Joint Replacement Model, 2016 to 2019

“…1 , 4 These lower spending benchmarks may have been less attainable for safety-net hospitals and hospitals with high Black and Hispanic populations, in part because they serve patients who have greater needs engendered by systemic barriers to care and thus remain persistently high spending. 5 , 6 …”

Medicare’s Bundled Payment Models—Reply

“…In Reply In response to the comments by Drs Navathe and Liao about our recent Viewpoint, we agree that cost reduction incentives are more effective for organizations that do not have competing financial interests. In a profit-driven system, clinicians, hospitals, and post–acute care facilities would naturally prefer to reduce episode-based spending by decreasing utilization of others’ services over their own, as highlighted in our Viewpoint and in the example of physician-led accountable care organization success cited by Navathe and Liao.…”