GE Healthcare Camden Group Insights Blog

Facing Bundled Payments

Posted by Matthew Smith on Apr 20, 2017 11:05:07 AM

By Dominic Foscato, Vice President, GE Healthcare Camden Group

Change in reimbursement isn’t waiting for tomorrow. It’s happening right now. Rather than paying for each procedure and office visit, government and private health plans are moving toward a payment model based on the health of an organization’s patient population. During this transition, an organization’s success depends on its ability to manage a variety of payment models.

Health care organizations must successfully administer these payment models — which continue to evolve and grow more complex —while optimizing quality, outcomes and patient satisfaction. In short, they must manage “fusion reimbursement” or risk significant cuts in revenue.

Clinical Integration, Clinically Integrated Networks

Reprinted with permission from the February 2016 issue of Trustee magazine, vol. 69, no. 2. © Copyright 2016 by Health Forum Inc. Permission granted for digital use only

Topics: Bundled Payments, Value-Based Payments, Alternative Payment Models, Dominic Foscato

Cardiac Care Bundles and the Need for Post-Acute Partnerships

Posted by Matthew Smith on Sep 26, 2016 2:21:31 PM

By Erin Byrne, Consultant, GE Healthcare Camden Group

Post-acute care continues to be an increasingly important component of the care continuum, as evidenced by the recently proposed expansion of CMS’s Episode Payment Models (“EPM”) focused on 90-day cardiac care episodes. More than ever, post-acute care providers are playing a crucial role in the care of patients across care settings, which is especially relevant to the current 90-day mandate for Medicare patients undergoing hip and knee replacements, as well as the newly proposed 90-day mandate for cardiac episodes, such as AMI and CABG.

Under this new value-based paradigm, successful management of risk and increased accountability for patient outcomes requires healthcare organizations to expand their focus beyond their individual care settings. This is especially true as it relates to post-acute care where a considerable amount of the total 90-day episode cost may be incurred. Through the proposed cardiac mandate, CMS is requiring hospitals to better control costs and decrease variability in service utilization patterns, which often is attributable to the post-acute portion of the episode of care. Acute care providers must prepare for the continued expansion of value-based payment arrangements by actively pursuing purposeful partnerships, strengthening care coordination and communication, and managing patients as they transition across the care continuum during their recovery.

Creating Purposeful Partnerships: Who Is the Right Partner?

Selecting partners is no simple task, and post-acute providers are no longer just referral partners. Hospitals must pursue post-acute care providers whose patient outcomes andclinical service capabilities will support value-based care under CMS’s cardiac EPM. With the clinical and financial responsibility of the patient’s care extending beyond the four walls of the hospital, hospital-based clinicians and their support teams have a heightened accountability for the quality of care being delivered in the post-acute setting. As such, skilled nursing facilities, sub-acute rehab facilities, home health agencies, and outpatient physical therapy providers are being closely evaluated for their ability to collaborate as well as their overall performance, including:

  • Performance on star ratings
  • Geography for convenience of the community or patient population
  • Medical staff that aligns with patient needs, with staffing coverage including physicians and advanced practice clinicians
  • Length-of-stay compared to benchmarks, the largest cost driver of post-acute spend
  • Readmission rates

CMS provides a range of resources and information on nursing homes and home health agencies in the public domain. Hospitals can utilize tools like Nursing Home Compare in their partner selection process, which provides detailed information about every Medicare- and Medicaid-certified nursing home in the country. Throughout the evaluation of post-acute care providers, a hospital self-assessment is also recommended to determine where patients are being referred and discharge to when they leave the hospital. Specifically, this assessment should consider length of stay in various post-acute settings, readmission rates, and how historical performance on these metrics compare to industry benchmarks.

Collaboration Across the Care Continuum

Proactive post-acute care providers will seize this opportunity to seek out partners, present their value proposition to hospital leadership, and collaborate with at-risk hospitals in the new value-based arrangements. Partners must collaborate to devise a cross-continuum strategy and implement new care models to support cardiac episodes from the time of hospital discharge through the patient’s full recovery. Once partnerships and post-acute care relationships are established, data and information will need to be shared and reported by acute and post-acute care partners including:

  • Deployment and adherence to evidence-based clinical pathways
  • Best practice protocols
  • Cost and utilization data
  • Quality measures
  • Patient-reported outcomes

Acute and post-acute partners must create cross-functional work groups to drive accountability and ensure adoption of protocols and best practices. Work group members should seek input from all post-acute partners about how work processes will most appropriately link together across care settings, solve problems, share learnings, and continue to improve collaboration.

Coordinating Care and Communication

Creating new lines of communication between multi-functional cross-organization teams is necessary to coordinate patient care throughout the 90-day cardiac EPM. A methodology and supporting infrastructure for ongoing information flow and problem solving must be developed to foster smooth care transitions and care coordination to deliver patient-centered care. These teams must sort out how each partner will handle patient transfers seamlessly to include all pertinent information, monitor patient adherence to clinical pathways, exchange and report data. Partners must work together to enhance use of care managers, information system integration, handoff protocols, and discharge instructions. The outcomes of this collaboration and planning will help guide care coordination, stratify hospital discharges by risk of readmission, complication or care plan non-compliance.

Hospital and post-acute care partners should assess resource needs to coordinate cardiac patients throughout the continuum, creating a comprehensive view as to how current or additional resources will work together in a revised, multi-partner care pathway to coordinate care incorporating post-acute care managers, SNFists, cardiac rehab clinicians, inpatient case managers, and cardiac services line leaders. Communication is important not only between care teams, but more importantly to the patient. Setting realistic patient expectations on how their episode will progress, while keeping the patient informed and involved in any revisions needed to their care plan establishes the patient at the center of the process, and should help drive better outcomes reported by patients on their actual experience of care.

Start Building Post-Acute Partnerships Now

Full episode and recovery planning must occur early and thoroughly to give patients a complete understanding of expectations of care before their surgery, while they are in the hospital, post-discharge and post-acute. Patient education should focus on self-management and support resources available to the patient and their care-givers. Identifying best practices to monitor patients’ care is crucial to manage risk of patient complications and potential readmission.

In today's value-based world, tracking patients throughout a bundle should be informed by the care management model. Patient outcomes will improve with monitoring and management of patient care throughout the 90-day bundle. Now is the time to begin the pursuit of aligned post-acute care partnerships. Pursing purposeful partnerships with post-acute providers are necessary to improve care coordination and communication to monitor and manage risks of bundle patients through CMS’s expanding Episode Payment Models.

Cardiac Care Bundled Payments

Byrne.jpgMs. Byrne is a consultant with GE Healthcare Camden Group, specializing in planning, strategy, and analytics in the bundled payment practice. She works with organizations to plan and implement bundled payment programs within Medicare, Medicaid, Commercial, and Employer markets. She may be reached at 




Topics: Bundled Payments, Post-Acute Care, Cardiac Episode Payment Model, Erin Byrne

Anticipate Cardiac Episode Payment Models and Get a Head Start on Quality

Posted by Matthew Smith on Sep 20, 2016 2:30:16 PM

By Barbara Letts, Senior Manager, GE Healthcare Camden Group

As we introduced in recent posts, bundled payment programs are not only here to stay but there are more to come. CMS is targeting 90 percent of Medicare payments to be tied to quality or value, and 50 percent of Medicare payments tied to alternative payment models (“APMs”) by 2018. Bundled payments expansion will be a significant contributor.

CMS will likely expand the Comprehensive Care for Joint Replacement (“CJR”), and the recently proposed cardiac bundles called Episode Payment Models (“EPMs”) for heart attacks and bypass surgeries. All mandated and voluntary bundled payments programs are tied to a quality requirement as a condition for payment.

Examples of Programs Tied to Quality or Value

  • Hospital Value-Based Purchasing     
  • Hospital Readmissions Reduction Program
  • Hospital-Acquired Condition Reduction Program       
  • Merit-Based Incentive Payment System

Examples of Programs Tied to APMs

  • Medicare Shared Savings Program   
  • Patient Centered Medical Home
  • Bundled Payments for Care Improvement   
  • Oncology Care Model

Similar to CJR, two factors determine whether your organization will succeed (i.e., receive a reconciliation payment from CMS) under the newly proposed cardiac EPMs.


Quality performance will also be factored into the episode target price calculation. A hospital with “Good” or “Excellent” quality scores would receive a higher target price as a result of reduced discounts and therefore improve their chances to save. The quality scores are composed of the following measures:


  • 30-day, all-cause, risk-standardized mortality post-AMI
  • Excess days in acute care after AMI
  • Voluntary hybrid 30-day, all-cause, risk-standardized mortality eMeasure data submission
Patient Satisfaction
  • Hospital Consumer Assessment of Healthcare Providers and Systems (“HCAHPS”) score
CMS is considering replacing the current 30-day mortality measure with the Hybrid AMI Mortality measure. The hybrid measure includes the same current 30-day mortality measure as one component using claims data but also includess clinical status information composed of five core elements: age, heart rate, systolic blood pressure, troponin, and creatinine. Currently, CMS uses the AMI mortality measures for payment determination in accordance with the Hospital Value-Based Purchasing Program.

  • 30-day, all-cause, risk-standardized mortality post-CABG
Patient Satisfaction
  • HCAHPS score

CMS plans to add the new CABG mortality measure to the Hospital Inpatient Quality Reporting Program in fiscal year 2017. HCAHPS are not specific to DRGs and reflects elements of care such as communication, pain management, discharge/transition information, cleanliness, and quietness. Additionally, there will be two variations for heart attacks: medical treatment (management) and revascularization (PCI) so there would be two different target prices.

Get Ahead of the Curve: Voluntary Reporting

One of the pain points we’ve seen with clients under CJR is the reporting process for voluntary submission of data. For organizations that have not prepared for bundled payments, it can be a sizeable learning curve just to understand the basic elements and concepts. The Medicare acronyms alone could get you in a tizzy. In regard to quality, if your HCAHPS scores are low and your mortality rates are average, you should consider voluntary reporting of clinical data to ensure acceptable quality scores at a minimum or you will be at risk for no payments even if you demonstrate reduced Medicare cost.

If there is one recommendation we would emphasize, it would be to get ahead of the curve with voluntary reporting. First, understand where you are today in regard to these measures (already being reported). Then, if there is risk of receiving a below-acceptable composite score, adopt a best practice process today for reporting and submitting clinical status information to Medicare whether this is something you develop in-house or contract with a vendor.

Other considerations iclude adopting these measures in other agreements or programs that have a quality requirement. For example, you may have a cardiology physician’s professional services agreement or employment agreement with a quality incentive bonus. Start tying them to other measures that you know are coming your way, and are mandated. This allows for consistency and further aligns incentive payments to other initiatives that have a financial impact on your organization.

Additional recommended reading related to cardiac EPMs:

Cardiac Care Bundled Payments

LettsB.jpgMs. Letts is a senior manager with GE Healthcare Camden Group and specializes in financial advisory services for the healthcare industry. She has developed complex financial models for various types of healthcare entities including children’s hospitals, large public hospitals, academic medical centers, community providers, medical foundations, clinically-integrated networks, and hospitals in turnaround situations. She may be reached at



Topics: Bundled Payments, Barbara Letts, CJR, Cardiac Episode Payment Model

Don’t Blow Your Bundle Budget: Establish a Patient Engagement Workgroup

Posted by Matthew Smith on Sep 8, 2016 2:40:08 PM

By Susan Robinson, MS, Consultant, GE Healthcare Camden Group

As CMS continues to test various alternative payment models, financial success will come to those hospitals that learn to effectively engage their patients. The recent cardiac Episode Payment Model (“EPM”) is just the second mandated bundled payment arrangement with more anticipated to follow. Whereas the Comprehensive Care for Joint Replacement (“CJR”) model mandated bundling for primarily elective procedures, hospitals will have to modify their engagement strategies as the patient population associated with the medical and surgical cardiac services are fundamentally different. The unique co-morbidities, health outcomes, and lifestyle habits of each person must be accounted for as organizations partner with cardiac patients to improve their health status.

CMS added a twist to this summer’s proposal by introducing incentive payments for cardiac and intensive cardiac rehabilitation (“CR”) services. These medically supervised programs focus on exercise, education for heart-healthy living (e.g., nutrition and smoking cessation), and counseling to reduce stress; all are efforts that have been shown to promote positive patient outcomes.1 CMS will be testing this approach on hospitals in 45 of the 98 mandated geographic areas participating in the cardiac EPM along with another 45 geographic areas outside those markets. The additional payments are intended to support beneficiary adherence to treatment plans, thereby leading to improved patient outcomes. Participant hospitals are wise to take advantage of CR programs to improve adherence and outcomes. A patient engagement workgroup needs to make sure two elements get put in place: ensuring providers refer beneficiaries to CR programs as part of standard discharge protocols; and utilizing care navigators to conduct post-discharge follow-up on participating patients.

If your organization hasn’t already dedicated resources to focus on patient, family, and caregiver engagement, then there’s no better time than….well, yesterday. Regardless of whether your organization’s patient engagement work group is an extension of another initiative or is designed specifically to prepare for cardiac EPM participation consider these 5 elements for success.

1. Involve the Right People

The workgroup should represent the key departments that serve cardiac patients such as the medical and surgical cardiac service lines, cardiac rehab, nursing, care management, nutrition, social work, pharmacy, and primary care. Adding the voice of a patient advocate or a recent patient who experienced cardiac care within your hospital can pinpoint the main determinants critical to actively engage patients in their care. When forming the team, don’t forget to look outside your organization to preferred post-acute and community partners—their involvement can help strengthen relationships and help keep patients accountable. Leverage IT and marketing for support to enhance the team’s ability to tap into other organizational capabilities.

2. Shape the Vision & Define Deliverables

Patient engagement efforts should constantly be evolving based upon feedback loops. Establishing a patient focus group to determine what went well, what didn’t go well, what they’d like to see improved based upon their previous experience is one way an organization can understand the patient’s experience and identify critical points in the episode to enhance patient engagement. With target prices and potential payments set by CMS on a quality first principle, the workgroup must understand the quality measures upon which reimbursement is based: CABG and AMI mortality, readmission rates and patient satisfaction scores. Incorporating other institutional measures of patient engagement, experience, or activation will help the team determine where to spend their time to make the most impact. As the goals and objectives of this workgroup may closely align with other population health strategies, it is important to define the desired deliverables in the context of organization priorities.

3. Focus On the Complex and High Risk

The roles and responsibilities of resources such as care navigators need to be prioritized. They will be accountable for developing and monitoring adherence to patient care plans, including follow-up appointments with cardiologists and primary care, but a significant amount of their attention should be focused on the higher risk patients in order to keep costs of readmissions down. Defining a process to identify high risk patients through risk stratification tools and learning how to best automate it should be a responsibility of this group supported by data and analytics. It will be important to understand the risk factors and reasons for potential noncompliance to treatment plans (e.g., medication, dietary, exercise regimes) specific to this population and how these factors can be mitigated.

4. Use the Patient Incentive Waivers

One hospital’s focus group highlighted how the lack of transportation to CR programs kept patients from participating.2 A hospital who experienced this same problem now provides patients with access to mobile applications to monitor progress after they leave the hospital. 3 Patients are able to log their exercise routines and receive reminders to take medications at prescribed times. The patient’s information is tracked on a clinical dashboard by their care team allowing them to intervene as necessary. Participant hospitals should take advantage of patient incentive waivers under the EMP to provide innovative technological solutions, but be smart and start by exploring the capabilities of current technologies within your organization.

5. Measure

The workgroup must design and deliver the strategy to monitor patient engagement efforts. Hospitals should as themselves the following questions. Are we giving our patients what they need to be successful? Are care plans aligned to patients’ health goals? Have we provided our patients the appropriate tools so they don’t end up back in the hospital? Are hospital staff and their partners effectively tracking the patient and their compliance to treatment, medication, and rehab plans throughout the entire episode of care? Not only should the key measures of success be monitored but they must also be communicated regularly to senior leaders and operational staff to illustrate the impacts of their efforts.

The investment in well-crafted strategies will pay for itself as highly engaged and accountable patients are critical to population health efforts. Patients who have positive experiences with your hospital are more likely to become a partner and loyal to your organization when it comes to receiving care and recommending your services.    


Robinson_Susan.pngMs. Robinson is a consultant with GE Healthcare Camden Group, specializing in bundled payments, process improvement, workflow redesign, value stream mapping, and time efficiency studies. Prior to joining GE Healthcare Camden Group, Ms. Robinson served as an industrial engineer for New England Veterans Engineering Resource Center in Boston, Massachusetts, where she applied systems engineering approaches to a variety of healthcare problems. She may be reached at



Topics: Bundled Payments, Cardiac Care, Episode Payment Models, Susan Robinson

Preparing for Episode Payment Models—Next Up: Cardiac Care Bundled Payments

Posted by Matthew Smith on Aug 15, 2016 9:53:21 AM

By Andy McNerney, Manager, GE Healthcare Camden Group

CMS’s newly proposed Episode Payment Models (“EPM”), focused on cardiac care, is the second major push to mandate the national adoption of bundled payments’ in recent years. Perhaps your organization was spared as you watched 67 other markets forced to bundle joint replacements. If your reaction was only to feel lucky that you dodged the swipe of our government’s hand instead of better preparing your service lines for episode based care delivery, then it’s time to organize regardless of which markets are selected this time around. 

These cardiac mandates have been proposed under the umbrella of EPMs, and participation will qualify physicians towards Advanced Alternative Payment Models (“APMs”) credit suggests CMS’ intention to roll out more. Although a cardiac episode presents very different challenges than a joint replacement, the way your service line approaches the episode care design, standardization, and monitoring process is very similar. If you haven’t already started enabling your service lines to execute on a bundle, don’t wait for a government dart to land in your market to do so. Instead, start developing work teams responsible to design and standardize processes across the pre-acute, inpatient, and post-acute setting as well as work teams dedicated to the reporting and monitoring of outcomes and engagement of patients across the entire episode.

The Proposed Model

Three major components make up the mandatory EPM proposal:

1. Cardiac Bundles: Inpatient admissions will be paid under a bundled payment for Acute Myocardial Infarction (“AMI”) episodes and Coronary Artery Bypass Graft (“CABG”) episodes for the next 5 years as follows:

  • Episode length: 90 days post-discharge
  • Mandated Markets: 98 random markets (rural markets excluded)
  • Downside Risks and Gains: Phased in over time and max out at 20 percent in the final years
  • Target Price: Weighted to hospitals’ historical performance in year 1 and transitions to one regional price in year 5
  • Quality and patient satisfaction scores influence financial gain or downside risk

2. Cardiac Rehabilitation (“CR”) Incentives: CMS will incent cardiac rehabilitation services utilization post-discharge within the 90-day episode period through retrospective payments as follows:

  • First 11 CR Services post-discharge from CABG or AMI admission: $25
  • Remaining CR Services in 90-Day Episode: $175

3. CJR Addition: Surgery for Hip Fractures was added to the current CJR mandate and will only immediately affect those hospitals in CJR mandated regions.

Not surprisingly, the proposed cardiac bundles are designed with very similar objectives to the CJR bundles: reduce unnecessary utilization such as readmissions, incent discharge placement to the appropriate care setting, promote care coordination across providers, and improve quality through care model design and standardization. As such, organizations embracing this cross-continuum care delivery work for the first time should start by establishing work groups that represent the following four areas:

  • Inpatient Clinical Redesign: While some patients present as non-emergent cases, many are through the emergency department when episode expectations can’t be set in advance, as is done with pre-surgical joint placement classes. These cardiac episodes contain both surgical and medical care making physician engagement even more important. Form a work group now that identifies opportunities to improve quality and develop a standardized care approach. Consider the following representatives: cardiovascular surgeons, cardiologists, hospitalists, case managers, social workers, operating room leadership, supply and implant purchasers, emergency room physicians, and a strong physician lead driving change.
  • Post-Acute Care: Similar to CJR, a work groups’ time should be spent standardizing discharge placement protocols and identifying preferred providers (SNF, HH, IRF, Cardiac Rehab providers, and others) who commit to sharing data, adhering to best practice protocols, and meeting quality requirements. Much more important for cardiac bundles will be transitioning patients back to OP partners and processes dedicated to managing the chronic conditions that led to the original admission. Consider the following representatives: Post-acute care managers, SNFists, Cardiac Rehab clinicians, inpatient case managers, cardiac services line leaders, and other care coordinators.
  • Quality and Reporting: Monitoring your bundle performance as real-time as possible and ahead of the quarterly report from CMS will keep your care teams engaged and promote a culture of continuous improvement. Utilize representatives from finance and data / analytics to research dashboards and tools that help identify care delivery and cost variation and allow care coordinators to identify and track bundle patients in your system.
  • Patient Engagement: One major variable differs greatly to the CJR bundle—the patient population. Unlike an elective joint patient, this population has greater co-existing chronic conditions and will naturally have more unplanned services and complications which make achieving your objectives more unpredictable. Successfully engaging patients can make the difference and justifies the need for establishing a patient engagement work group. This work group should take a more social view and identify programs and tools to assist with adherence to treatments and medication management, compliance with Cardiac Rehab care plan and follow-up appointments, adherence to dietary and nutrition regimes, and social support services. This group may be an extension of other population health initiatives identifying high risk patients through risk assessment tools and empowers them with tactics and technologies to manage their recovery and prevention.

We recognize that resources are scarce, competing initiatives are many, and establishing work groups and initiatives without an actual mandate or direct incentive can be a tough sell. If you are not able to organize your operations and select service lines around the above work teams for the simple reason that it’s best for patients in your community, then do so under the assumption that bundles are here to stay, and the works needs to get done to succeed within them.    

Cardiac Care Bundled Payments

mcnerney.jpgMr. McNerney is a manager with GE Healthcare Camden Group. His primary area of focus is bundled payments strategy, design, and implementation. Mr. McNerney also specializes in system and service line strategic planning and new business development for a variety of healthcare organizations. He may be reached at 




Topics: Bundled Payments, CMS, Andy McNerney, Cardiac Care, Episode Payment Models

The Move from Volume to Value: Now is the Time for Change

Posted by Matthew Smith on Jun 2, 2016 12:19:54 PM

By Daniel J. Marino, MBA, MHA, Executive Vice President, GE Healthcare Camden Group

Healthcare delivery (and physician reimbursement specifically) is undergoing unprecedented transformation. While most physician practices still operate largely in a fee-for-service ("FFS") world, government and commercial payers alike have signified their intent to reimburse physicians and other providers based on value.

Thriving in an Uncertain World

Many physicians recognize that the FFS system is imperfect at best, but the evolving value-based reimbursement system is ill-defined, leaving physicians facing a great deal of uncertainty. During this time of uncertainty, medical practices have opportunities to improve performance and position themselves for success in the rapidly changing healthcare market. It is natural to begin focusing on clinical measures and outcomes as a means for proving value, but it is just as important to remain financially viable during the transition. By understanding the structures of evolving reimbursement methodologies, changing health plan dynamics, and developing market trends, we can thrive in this uncertain world.

The Department of Health and Human Services’ (HHS) is actively involved in the fundamental shift in reimbursement, moving from volume to value in Medicare payments, reinforcing the shift to value-based care. Organizations that begin to incorporate strategies around the “value proposition” will be in the best position to meet industry demands for value-based reimbursement. This will require a dedicated strategic “call to action” across organizations and their provider community.

Controlling the Momentum of Change

There remains a fundamental question regarding how quick an organization should move to value-based care and controlling the momentum of change. Although some of the drivers are market dependent, others are based on embracing key concepts around the “triple-aim principles” and preparing the organization for the future. High-performing organizations are building their clinically integrated networks, forming ACOs, and incorporating reimbursement programs around bundled payments and minimal risk-based contracts, while still reaping some opportunities from the current fee-for-service contracts. 

The transition into value-based care is a paradigm shift of culture, care model redesign, reimbursement, and quality outcomes that takes time. Organizations that begin to plot the “value-based care” path now, while fee-for-service is still their predominant reimbursement, will be in the best position to refine their care delivery models and protect their revenue streams. It will come down to embracing the concepts of patient-centered care while focusing on improving access and reducing the cost curve. Health systems must begin to squeeze operating costs out of the system and incorporate patient-centered care models focusing on an “ambulatory-focused” model of care that carefully manages transitions across the continuum.

Balancing Risk

Many commercial payers in some markets have already begun the transition, with many more to follow.  A strong value proposition along with creating the patient-centered strategy is key to finding the right “change momentum” for your organization. Focusing on providing the value proposition, engaging physicians to lead the care redesign, and incorporating programs such as bundled payments and shared savings help to make sure organizations appropriately embrace the pace of change within their market. It also ensures the organization can maintain a steady forward pace by balancing appropriate risk with solid potential for clinical and financial gains.

Volume to Value

Marino_Dan.jpgMr. Marino is an executive vice president with GE Healthcare Camden Group with more than 25 years of experience in the healthcare field. Mr. Marino specializes in shaping strategic initiatives for healthcare organizations and senior healthcare leaders in key areas such as population health management, clinical integration, physician alignment, and health information technology. With a comprehensive background in all aspects of practice management and hospital/physician alignment, Mr. Marino is a nationally acknowledged innovator in the development of Accountable Care Organizations and clinical integration programs. He may be reached at

Topics: HHS, Bundled Payments, Department of Health and Human Services, Value-Based Reimbursement, Value-Based Care, Daniel J. Marino

Three Prep Tips for Hospitals Preparing for CMS’ CJR Model

Posted by Matthew Smith on May 24, 2016 11:00:29 AM

Via Managed Healthcare Executive

April 1 marked the start of the CMS Comprehensive Care for Joint Replacement ("CJR") model, which the government agency hopes will support better and more efficient care for its beneficiaries undergoing hip and knee replacement surgeries, the most common surgeries among Medicare patients.

According to CMS, the rate of complications such as infections or implant failures can be more than three times as high at some facilities than at others—and that leads to hospital readmissions.

In 2014, there were more than 400,000 hip and knee replacement procedures, which cost $7 billion in hospitalizations alone. The cost to the government agency was an average of $16,500 to $33,000 for surgery, hospitalization, and recovery across geographic areas in this time period.

With the CJR model, participating hospitals are held financially responsible for the quality and cost of the surgical procedure, which starts when the patient is admitted and ends 90 days after their discharge from the hospital.

Prep tip 1: Focus on post-acute recovery decision-making

The biggest opportunity for hospitals and health systems involved in the CJR model is in the post-acute recovery space, says Andrew McNerney, consulting manager with GE Healthcare Camden Group.

To continue reading this article on the Managed Healthcare Executive website, please click the button below. You will be directed immediately to the full article (no form required).

CJR, Bundled Payments

mcnerney.jpgMr. McNerney is a manager with GE Healthcare Camden Group. His primary area of focus is bundled payments strategy, design, and implementation. Mr. McNerney also specializes in system and service line strategic planning and new business development for a variety of healthcare organizations. He may be reached at



Topics: Bundled Payments, CMS, CJR, Andy McNerney

HFMA Forum Networking Webinar: Bundled Payment Models-- CJR and More

Posted by Matthew Smith on May 5, 2016 11:08:28 AM

Please join GE Healthcare Camden Group's Kelly Tiberio and Novato Community Hospital's Brian Alexander for this Forum-exclusive webinar as they share their perspectives about the challenges healthcare organizations face when implementing bundled payment programs--specifically related to orthopedic episodes. Practical tips and lessons learned will be shared. Critical areas covered during the webinar include the following:

  • The importance of physician champions and strategies for their engagement
  • Considerations for physician incentive design
  • A sample physician-level performance dashboard
  • Accountability for program compliance and continual performance improvement

Participants will be able to ask questions and discuss bundled payment challenges and approaches specific to their own facilities. 

Please note: This webinar is only available for HFMA Forum subscribers. Learn more about the Forums—and join.

Date and Time

May 17 — 10:00 a.m. – 11:00 a.m., CDT

Discussion Leaders

Brian Alexander
Chief Administrative Officer
Kelly Tiberio
GE Healthcare Camden Group
Bundled Payment, CJR, Webinar

Recommended For:

HFMA Forum members interested in bundled payment models, including CFOs, revenue cycle leaders, and managed care directors 

Field of Study: Specialized Knowledge and Applications
Delivery Method: Group Internet
Level: Intermediate
Prerequisites: A basic understanding of bundled payment models     
CPEs: 1.0  


HFMA Forum members: Free

Non-Forum subscribers: N/A| This virtual networking webinar is only available to HFMA Forum subscribers. HFMA has four Forums: CFO, Revenue Cycle, Payment & Reimbursement, and Legal & Regulatory. This webinar is open to subscribers to all four Forums. Learn more about the Forums—and subscribe.  

Forum subscribers can now earn 1 CPE credit by attending Forum virtual networking webinars. The webinar presentation and audio will be available on the Forum website after the webinar. However, CPE credits are only awarded to Forum members who attend the live webinar on May 17.  

Topics: Bundled Payments, Webinar, CJR, Kelly Tiberio

The Math Behind CJR: The Top 10 Calculations You Should Be Considering

Posted by Matthew Smith on Mar 23, 2016 3:14:44 PM

By Kelly Tiberio, Manager, and Barbara Letts, Senior Manager, GE HealthCare Camden Group.

In a time when healthcare organizations can shop around for risk-based contracts, the Comprehensive Care for Joint Replacement (“CJR”) mandate creates uncertainty that has hospital C-suite executives cautious if not uncomfortable. “Calculated risk” isn’t an option in the CJR mandate; on the contrary, CJR creates a new paradigm of widespread accountability for the cost of episodic care that the country hasn’t seen before. In less than three weeks, nearly 800 acute care hospitals will begin their mandatory participation in the CJR mandate. While CMS has delayed risk to begin in performance year 2 of the program, the preparation for going at-risk starting January 1, 2017 should start now.

In evaluating their potential upside opportunity and downside risk as hand-picked participants in this program, healthcare executives would be wise to consider the various calculations they can—and should—be making to best understand their organizations’ probability of financial success in CJR. Consider these 10 practical calculations as your hospital or health system embarks upon the new CJR reality.

For illustration purposes, the calculations in this table use a $25,000 baseline price (before the CMS discount is applied) for a lower extremity joint replacement (“LEJR”).  Read about each calculation below the table.

(Click here for a larger image)


Calculation #1: The first question every healthcare executive asks about CJR is: how is this going to impact our bottom line? While the exact answer can only be reached through analysis using baseline data and CMS target pricing, what we know today is that CJR hospitals have until December 31, 2016 to figure out how to minimize their risk exposure in performance years 2 through 5 of the program. Year 4 is when the maximum CJR risk begins (capped at 20 percent). The “repayment amount” is what participant hospitals will owe CMS should they exceed their target price.

Calculation #2: Luckily, the converse scenario to downside risk is upside opportunity. Starting in CJR performance year 1, hospitals can be eligible to receive a reconciliation payment from CMS if their actual performance year episode costs are lower than the CMS target price. But first, hospitals have to achieve a quality threshold in order to reap the savings. The “upside” requires participants to meet a minimum composite quality score, explained in #5 below. Similar to maximum downside risk, maximum upside opportunity is capped at 20 percent in Years 4 and 5.

Calculation #3: Collaborators in CJR consist of providers who are directly involved in the patient care of a hospital’s CJR beneficiaries. A hospital may consider a multi-pronged approach to gain- and risk-sharing in order to incentivize all parties involved to better coordinate care, improve outcomes, and manage episode costs. Physicians are only one type of potential collaborator, but a highly influential stakeholder group in the game. Gainsharing payments to physicians must not exceed 50 percent of a physician’s Physician Fee Schedule payments in a performance year (in the example above, the Medicare FFS payment is $1,500). This is shown as a negative from the hospital’s perspective, as this would be considered an expense of the program. While the maximum calculation is based on the aggregate amount of services the physician bills, including multiple visits and other services after the patient is discharged, in the above sample, we have limited the calculation to just surgery – the one constant we can expect and is by far the largest proportion of the aggregate amount

Calculation #4: Just as reward can be shared with collaborators, so can risk. However, the hospital has to retain at least 50 percent of the repayment obligation to CMS. The remaining 50 percent of risk can be distributed among multiple collaborators, with no single collaborator at risk for more than 25 percent of the repayment amount. “Alignment payments” from collaborators to the hospital can be as equally incentivizing as gainsharing payments in CJR: in a risk-share scenario, everyone has skin in the game.

Calculation #5: Remember Calculation #2? CMS has intentionally linked reconciliation payments to quality performance in CJR. So, if your hospital achieves a windfall of $15,000 because it beat the target price but has not met the minimum quality threshold, there will be no reconciliation payment received from CMS (i.e., money will be left on the table). The quality strategy and methodology behind CJR is complex and involves two required measures and one voluntary measure. Fortunately, CMS will be managing the quality and cost reconciliation process on behalf of participant hospitals each year. But beware: don’t wait for CMS to tell you how your hospital is faring. Get ahead of your performance monitoring and understand where your weaknesses are.

Calculation #6: Quality incentive payments are “payback” mechanisms that CMS has created to effectively reduce the 3 percent CMS discount taken off the top across all five performance years of CJR. In other words, the better your composite quality score, the higher your potential reconciliation payment from CMS and the lower your repayment amount to CMS. While the maximum 1.5 percent discount reduction may not seem like much of a gift, it adds up when you have 100 or more episodes as illustrated in the example below. CMS will get its 3 percent discount immediately because it is factored into the target price. However, during reconciliation, the quality incentive payment will be applied to the final reconciliation or repayment amount.

Calculation #7: The total episode costs in an inpatient stay plus 90-days post-acute care can add up quickly. CMS credits many of the achievements of the Bundled Payments for Care Improvement program on the reduction of unnecessary post-acute care: reducing SNF utilization, as well as other high-cost post-acute providers, reducing readmissions, and shifting that utilization to clinically appropriate care settings. Evaluating your hospital’s utilization patterns against national and best practice benchmarks is a valuable exercise in understanding where savings can be achieved.

Calculation #8: There are two categories of savings that can be accrued in CJR: internal cost savings (ICS) and positive reconciliation payments from CMS. The ICS methodology is generated, calculated, and owned by the CJR hospital. These funds do not pass through or come from CMS at any time. Hospitals are, however, obligated to report on gain share payments that may have been paid out as a result of ICS generated. (Note: gain share payments to CJR collaborators can only be made once annually, and the payment must combine both ICS and/or positive reconciliation payments into a single payment.) ICS is often generated through a number of channels, such as care redesign that impacts length-of-stay and standardization of implant costs. There is no one-size-fits-all methodology for achieving ICS, and much of the work depends on the hospital’s existing care models, physician alignment initiatives, and clinical infrastructure.

Calculation #9: The adage “it costs money to make money” rings true in CJR. In building your hospital’s CJR program budget, don’t forget that you will need to invest in resources to be successful. Unless your organization is a regional Center of Excellence for joint replacements and is already well below the CMS target price, you probably have work to do. And more importantly, you need resources to actually do the work. Nurse navigators are a proven investment in episodic care because they follow your CJR patients throughout the entire episode, especially as it relates to post-acute care where many patients may fall off a hospital’s radar. Additionally, investments in data analytics software/vendor support and adaptation of existing IT infrastructure are common program costs in bundled payment programs.

Calculation #10: Last but not least, the halo effect. In performance year 5, your hospital will be a well-oiled machine for LEJRs (we hope). You will have invested, redesigned, improved over and over again, and you will have probably failed somewhere along the way, too. That failure becomes a little less daunting when you consider the competency and organizational muscle your hospital will have developed between now and 2020. Why? Because now you’ve done it, you’ve learned how to truly engage your clinical staff, your post-acute partners, your community, and most importantly, your patients. You can replicate all those efforts by expanding your muscle to other clinical episodes and to other payers in your market. Because the end goal in CJR is leveling the cost landscape (picture a bulldozer driven by CMS) and increasing the quality game, your patients and your network will know your hospital is best-in-class. This assumes, however, that you are performing better than your competitors. Remember that since CJR affects an entire market, you must compete not only against CMS’s target price, but against your competitors doing a better job in achieving savings and quality scores. Your CJR experience will also pave the way for other value-based care initiatives and service line strategies your organization may be planning now or on the horizon.

Bundled Payments, CJR

TiberioK.jpgMs. Tiberio is a manager with GE Healthcare Camden Group and has worked on a variety of projects involving the diverse, operational, and strategic needs of nonprofit and healthcare organizations. Her areas of focus include bundled payments and other healthcare and payment reform initiatives under the Center for Medicare & Medicaid Innovation. She may be reached at



LettsB.jpgMs. Letts is a senior manager with GE Healthcare Camden Group and specializes in financial advisory services for the healthcare industry. She has developed complex financial models for various types of healthcare entities including children’s hospitals, large public hospitals, academic medical centers, community providers, medical foundations, clinically-integrated networks, and hospitals in turnaround situations. She may be reached at



Topics: Bundled Payments, CMS, Barbara Letts, CJR, Kelly Tiberio

Q&A: Selecting Post-Acute Organizations for Joint Replacement Bundles

Posted by Matthew Smith on Mar 21, 2016 1:27:08 PM

With mandatory bundles for joint replacement looming, many hospitals have worked through their financial impact analyses and sorted out their physician relationships. But it sounds like many have yet to develop a strategy for post-acute partners, especially selection tied to quality outcomes and post-acute clinical skill.

The comprehensive care for joint replacement ("CJR") initiative involves a 90-day episode of care, and the hospital component will typically involve only three or four of those days. Depending on the market, hospitals will likely need to consider both home health agencies and skilled nursing facilities as important players in their post-hospital continuum.

Hospitals often have a range of questions about picking post-acute providers. Here are some of the common questions that have crossed our inbox in the last few weeks.

Q: My hospital has reviewed our recent discharge data and determined that a lot of our post-acute discharges go to five providers. Can we just keep it simple and say these five are our partner group and leave it at that?

A: You could, but historical volume doesn’t always equal quality. In a lot of instances, it equals convenience. As you explore potential partners, there are three key things to consider:

  • Quality performance
  • Geography
  • Medical staff

There are ample options for learning about post-acute provider quality via state and federal resources – a fuller discussion is presented in the following question. Your hospital should look for providers in at least the top quartile of quality and seek out those who perform better than state and national averages. Second, consider the geographic distribution of post-acute providers in your service area. Discharging patients will want an option that is close to home or covers their community. Thus, balancing quality and geography is an important equation. Finally, you’ll want to make sure that your post-acute partners have consistent medical staff coverage that aligns with your patient needs. Skilled nursing facilities and home health agencies are required to have a physician as a medical director, but that physician oftentimes not directly involved in patient care nor following patients on a regular basis. Post-acute organizations can employ a range of physician models, some with open or closed staff models, or some using a “SNFist” – similar to a hospitalist but in a skilled nursing facility. You’re looking for post-acute partners with at least 30 hours per week of coverage, involving some combination of physicians and advance practice clinicians.

Q: What sort of resources can I access and what kinds of data should I review when it comes to selecting post-acute providers?

A: There are a number of resources readily available with information about post-acute organizations, especially skilled nursing facilities and home health agencies. Medicare’s beneficiary-facing website ( offers a range of information via its nursing home and home health compare tools. While much of this data is retrospective in nature, it can provide a good baseline around historical quality. It’s important to note, however, that a lot of the data regarding skilled nursing facilities is focused on aspects of long-term care and not on short-term, post hospital care. Other data that may be more pertinent to bundled payment is available via commercial data vendors or actuaries. If you’ve already completed any analysis about your organization’s costs and opportunity related to CJR, it’s likely that you should have some sense about who the high volume post-acute providers are, how long they keep patients with respect to benchmarks and how often they readmit patients. When considering post-acute providers for your discharges, post-acute length-of-stay is often the largest determinant of cost and should be an important data point for you. Readmission rates are also important.

Q: We’ve figured out which providers will be our network partners. Now we want them to follow our clinical protocols and perform. What’s the best way to get them on board?

A: While it’s probably easiest to just dictate terms and expectations, you’ll catch more flies with honey than with vinegar. One of the best ways to engage with post-acute providers is to acknowledge that they’re an essential part of your episode. Treating them like a true partner will get you halfway there. Beyond that, you should build the right infrastructure for ongoing dialog, education and problem solving. A dedicated workgroup or committee involving acute, post-acute and physician participants is essential. If you want post-acute providers to follow your protocols, sit down and work through the protocols together. Seek input from the post-acute organization about how their work meshes most appropriately with yours. Sort out how you will handle patient transfers, exchange data and report data. Meet regularly to address issues, share learnings and maintain the dialog. Most importantly, designate a resource in your organization to lead this effort. You’ll be happier for clearly-defined accountability, and the post-acute providers will always know who to call when they have questions.

Q: We obviously want to keep track of these patients after they’ve left post-acute. What’s the best way to do that?

A: For providers already down a value-based or population health road, keeping track of patients should flow automatically to your care management model. Absent this resource, you’ll want to create some kind of ad hoc approach that defines clear accountability and process for post-hospital/post post-acute follow through. You should consider some of the models around phone-based care management as a potential resource. Patient activation will play a key role – educating the patient about self-management or how to access support as needed. Post-acute providers can take on some of these function or assist, if you can create the right incentive for them take it on. One important requirement of CJR involves patient-reported outcomes. From an infrastructure perspective, your effort to gather this quality data from patients should ideally integrate with your patient monitoring efforts.

Q: We’re thinking about moving past a contractual arrangement with post-acute providers and are interested in exploring direct ownership or operation of post-acute. What do we need to know?

A: First and foremost, owning and operating post-acute carries as many challenges and pitfalls as any other healthcare business. How complicated can it be? Fairly complicated. Each post-acute setting currently retains its own unique payment system and regulatory framework. In some states, there are barriers to developing new post-acute settings; in other states, there are limitations about how you can move an existing provider from one geography to another. That said, there is a general spectrum of how hospitals and health systems can approach post-acute relationships, ranging from joint operating arrangements and networks through joint ventures and sole ownership. Each invites various pros and cons, and the right answer can be very organization and market-specific.

Topics: Bundled Payments, Post-Acute Care, Skilled Nursing Facility, CJR, SNF, SNFist

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