Bundled Payment for Physician Group Practices and Organized Delivery Systems.

The U.S. healthcare industry, spurred by 1) actions taken by the federal government and 2) widespread opinion that the current rate of increase in healthcare expenditures is unsustainable, has turned towards value-based purchasing as an aid to control costs and retain quality of care. One type of value-based purchasing, bundled payment reimbursement, involves having the payor of healthcare services pay a fixed amount to be distributed among all providers involved in the treatment of an individual (e.g., hospital, physician, rehabilitation facility, physical therapist, home health agency, laboratory, etc.) for a specified episode of care (e.g., joint replacement, cancer treatment, coronary artery bypass graft). Bundled payment models typically include the potential for bonus payments to providers, i.e., distributions of shared savings. Theoretically, bundled payment programs lead to enhanced clinical integration, oversight and conformity with best clinical practices among participating providers, which in turn, theoretically, lead to: 1) as good or better quality of care and 2) better cost control. Indeed, bundled payment models have, in fact, been shown to be effective in controlling costs without diminishing quality. Therefore, the adoption of bundled payment arrangements by commercial carriers, selffunded health plans and government-sponsored health plans is accelerating. By Barry Liss, Esq. Bundled Payment for Physician Group Practices and Organized Delivery Systems