Creating and Negotiating Bundled Payments
Bundles / Financing
Hartford HealthCare at Home, Hartford, Connecticut.
Since 1901, Hartford HealthCare at Home (formerly VNA Health Care) provides home health care to residents of 59 towns in central Connecticut and the greater Waterbury area. The agency helps people live independently in their own homes by offering a full spectrum of home health care ranging from skilled nursing, hospice, rehabilitation, and speech therapy to cardiac nursing. At Hartford HealthCare at Home, home care services are designed to encourage independent lifestyles through assistance from visiting nurses, private duty nurses, physical and speech therapists, homemakers, personal care attendants, home health aides, social workers, Meals on Wheels, geriatric care management, and home health monitoring. Hartford HealthCare at Home employs more than 950 individuals at eight branch offices and has 17,000 total admissions a year.
Hartford HealthCare at Home is part of the Hartford HealthCare network. This integrated health care system includes a tertiary-care teaching hospital, an acute-care community teaching hospital, an acute-care hospital and trauma center, two community hospitals, the state’s most extensive behavioral health services network, a statewide clinical laboratory system, a large primary care physician practice group, a regional home care system, an array of senior care services, and a large physical therapy rehabilitation network.
Hip and knee replacement patients from the Hartford Health Care network admitted into home care.
A key partner in this program is the hospital system Hartford HealthCare network. A bundled payment is made from by the Centers for Medicare and Medicaid Services.
In order to combat growing financial losses, Harford HealthCare at Home identified potential areas in which to offset losses and authorization issues.
A potential opportunity for savings is in orthopedic cases, specifically total hip replacements (THR) and total knee replacements (TKR). Based on the 2010 Medicare claims data, Hartford discovered that the state of Connecticut has a much higher discharge to skilled nursing facilities (SNFs) than compared to other states.
Hartford HealthCare at Home sees approximately 1,300 knee and hip admissions annually (there is a 2:1 ratio of knee to hip patients) and was approached by other providers to design an alternative payment model.
Hartford HealthCare at Home is also part of the Model Three CMS Bundled Payment. This model is for post-acute care. This bundle includes all services throughout the episode at the beginning of post-acute care services. This includes SNFs, inpatient rehabilitation facilities, long-term care hospitals, and home health.
Services included in this episode must begin within 30 days of discharge from the inpatient setting and terminate in 30, 60, or 90 days after the initiation of the episode. Research supports that bundled payments align incentives for all providers to partner. Partnerships can help drive a positive patient experience and can align clinical outcomes across settings.
Taking into account the needs of THR and TKR patients in the Connecticut and participation in bundled payments, Hartford HealthCare at Home is developing a pilot program within their health system for patients with THR and TKR. Hartford Health at Home is seeing a much younger population opting for total or partial hip/knee replacement surgery. Technology is changing and improving everyday, which reduces service utilization. These orthopedic patients can go from post-operation straight to the home without any outpatient services. There are many benefits stemming from the faster rate of recovery and fewer days in acute settings. These include a reduction in the cost of care, better outcomes (including functional score improvement) and patient satisfaction scores.
These orthopedic cases utilizing inpatient services are more expensive and have no better outcomes than home health can provide.
Hartford HealthCare at Home developed a pilot program within the health system. It is a straight-to -home for partial hip or knee replacement in a risk-based contract with a leading orthopedic surgical group. This includes:
- A dedicated nurse that meets the patient when they arrive home from the hospital.
- The bundled payment will cover the fees and costs of surgery, facility, home health therapy visits, and overnight stay in the facility.
- Covers a period of 90 days for any complications received from surgery.
- This will be utilized for both straight commercial, managed care, and managed Medicare.
- Accounting for the revenue and margin will be an internal system cost-sharing model.
Results for this program can be found in the savings. The average payer costs per day:
- Acute inpatient setting: $8,000 a day
- SNF: $460 a day
- Home health visit: $155 a visit
- Outpatient rehabilitation: $80 a visit
Three days as an inpatient, 10 days in a SNF, 10 home health visits, and 10 outpatient visits totals to $31,000. In the bundled payment model the patient would have three days in an acute setting, 14 visits in home health, and 10 visits to an outpatient facility which costs $27,000. This totals approximately $4,000 in savings per case.
Barriers to Implementation:
Barriers to successful implementation include limited insight as to what managed care companies offer providers for bundled payment programs. For example, Aetna will pay for telemonitoring in Indiana, but does not offer payment in Connecticut. This puts the agency at a disadvantage in creating programs that may already exist.
Data is also an issue. The agency needs to show outcome improvements such as costs savings, low dependency on surgeons, and a higher volume of patients to help affect the bell curve. There must be data on the current state and the future state to prove efficiencies.