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American Association of Hip and Knee Surgeons

Advocacy, Education, Research

Success in Bundled Payments for Care Improvement

by Geoff Walton, MHA and DJ Beckett, Stryker Performance Solutions

The motivation for health care organizations to enter the Bundled Payments for Care Improvement (BPCI) program nearly always include a desire to improve patient experience and prepare itself for future financial success. Additional benefits of participation include: gaining intelligence on vital procedures and services via valuable claims data, developing the fundamental knowledge and infrastructure to support risk-based agreements, and aligning the facility and physicians. Success in BPCI is not guaranteed, and there are a number of core competencies that an organization must develop to drive success under BPCI.

Data Analytics

BPCI Participants receive their historical claims data from CMS so they can determine the most opportunistic DRG bundles and understand cost drivers. In order to take advantage of this financial opportunity, it is crucial that the participant have strong actuarial and financial analytic capabilities. Data analytics continue to be essential throughout the program. Both internal cost data and CMS claims provide the basis for program evaluation and ongoing quality improvement. Equally as important, data analytics drive quarterly reconciliations, CMS true-ups and gainsharing payments. Trust us—choosing the right bundles is foundational to the success of the program, and data errors at any point in the process can be extremely costly.

Project Management and Compliance

Organizations pursuing BPCI need a strong project management team in place to ensure the program is compliant in fulfilling its obligation to CMS and to drive accountability and targeted process improvement. We highly recommend a dedicated CMS liaison(s) be established to lead the team on CMS guidelines and policies.

BPCI participants must maintain tight communication with CMS regarding evolving program policies, guidelines, and data reconciliation. BPCI participating organizations are required to write and then comply with its implementation protocols which will eventually be audited by CMS. The BPCI participant should be immediately ready to demonstrate compliance, and without dedicated expertise an organization will expose itself to compliance risk that could have been avoided.

Physician Alignment

In many cases, physicians can and should lead care redesign that ultimately increases value by improving clinical outcomes and reducing episode cost. The ability under BPCI to gainshare and compensate the physicians for this important work has the potential to align hospital and physician incentives if structured and executed appropriately. Hospital leadership and physicians should work together to design impactful, but attainable gainsharing metrics and targets. When physicians understand the opportunity to impact quality improvement and cost reduction, as well as the potential financial rewards, they will be engaged in the initiative. Quarterly reconciliations present opportunities for physician and hospital leadership to come together to assess episode data and program outcomes to for continuous quality improvement.

About the Authors

Geoff Walton, MHA, Vice President, Alignment, Strategy and Reform, Stryker Performance Solutions

Geoff brings decades of experience in leading operations and strategic business development activities for hospitals and health systems to his role at Stryker Performance Solutions. As co-founder of Comprehensive Care Solutions—acquired by Stryker in 2012—Geoff and his team continue their work with physician organizations and health systems to align and turn reform into opportunity.

By utilizing new payment and delivery structures, including Accountable Care Organizations and bundled payments, he oversees a diverse range of professionals, including clinical, legal, actuarial, group practice and hospital management to serve a wide range of client needs. Geoff is a co-founder of Secured Independence (now Alere), a geriatric population health company. He has a Bachelor of Arts degree in Economics from the State University of New York at Albany and a Master of Health Administration degree from the University of North Carolina at Chapel Hill.

DJ Beckett, Senior Business Analyst, Alignment, Strategy and Reform, Stryker Performance Solutions 

DJ provides critical support for clients researching, applying for, and implementing new healthcare payment and delivery systems. He assists the Stryker Performance Solutions teams with research and analysis on Bundled Payments and Accountable Care Organizations, and analyzes client data for trends and outliers to facilitate recommendations. He creates tools, such as Bundled Payment modelers, and manages the Centers for Medicare and Medicaid Services Bundled Payment applications and strategic initiatives. DJ has been a Senior Business Analyst with Comprehensive Care Solutions, which was acquired by Stryker, since April 2012. He graduated summa cum laude from Utah Valley University with a Bachelor of Science degree in Business Administration, and earned the Woodbury School of Business Recognition Award and Harvard Business Leadership Certificate. He is preparing to become a candidate for an MBA.