Standardized Bundled Payment ContractsTM offer substantial benefits
- Price transparency enabled via the HCFEx Exchange
- Specification of coordinated services with control over clinical variability
- Objective standards for clinical outcomes, provider performance and service quality
- Predictable payments, revenues and expenditures
- Control of out-of-pocket expenses
- Contractual certainty re warranties
- Expand market out-reach without network limitations
- Sustain employee access to high quality healthcare services
- Improve patient experience through contractual terms that include all patient-related services
- Economic benefit via a decline in MLR
Due to decades of convention, the healthcare industry is replete with opaque mechanisms to price procedures and services. A single procedure such as a total joint replacement is comprised of numerous, individual service elements that map to specific reimbursements.
However, for similar procedures, providers may document and code these elements differently resulting in payment variation for the same procedure. Because of this “coding and reimbursement variation”, comparing costs by provider is difficult as is aggregating the various codes to determine a comprehensive “package” price for a defined procedure.
Proposed regulatory and policy changes incentivize healthcare payment models that focus on coordination of care and value-based purchasing (i.e. “Bundled Payment” contracts covering an entire episode of care), instead of reimbursement based on individual procedures and quantity of care offered. By paying for related care in a bundled package, providers must coordinate care and avoid unnecessary services as well as improve patient outcomes and experience.