Home Health Weighs Risks, Rewards of Bundled Payments

With bundled payment programs already underway, home health agencies are making strides to position themselves as preferred providers to hop on board the coordinated care trend.

The Centers for Medicare and Medicaid Services (CMS) recently finalized the model for Comprehensive Care for Joint Replacement (CCJR) that bundles payments through coordinated care between health organizations. The model is just the latest version of CMS’s test models for bundled payment structures that incentivize home health agencies to work with hospitals and other acute care providers.

The Rise of Bundled Payments


CMS began the bundled payment initiative in 2013 and has been continually rolling out new models. The CCJR model reflects that more of these programs could be aimed at specific procedures to improve quality of care and reduce the cost of the most common health care services.

As the health systems continue to shift and incentivize value-based purchasing structures, home health will become more important, according to Steve Wogen, chief growth officer at CareCentrix. CareCentrix is a home health coordination company that works with payors and providers to create managed care networks.

“The role of home health is absolutely critical to anything that happens in the future of value-based purchasing models,” Wogen told Home Health Care News. “CMS and payors, at this point, are making it very clear that this type of care is the future. The home is where the patients want to be and where patients should be and can be take care of as an alternative to acute care.”


Home Care by Black Stone, a home care and home agency that was recently acquired by Almost Family, is already involved in multiple bundles with its partners, according to CEO David Tramontana. Getting involved in these programs has enabled the home health company to position itself as a preferred provider and share in the potential savings incentives.

“Taking risk is an opportunity to learn in the bundled payments,” Tramontana told SHN. “The only lever that you have to actually gain financially in the bundled payment for a home health provider is if you improve your own readmissions based upon your historic costs. When I look at the bundled payment program, I think it’s an opportunity for us to work with providers upstream that are taking risks and develop those preferred provider relationships.”

The company has had to expand its ability to measure and capture patient data, and the investment has been one of the biggest expenses and risks of coming on board with bundled payments. However, data points like hospital readmission rates are the most important metrics to become a preferred partner with hospitals and other post-acute providers.

“The best position for a home health agency in a bundled payment scenario is to help providers reduce the risk of readmission for their patients,” Tramontana told SHN.

Risks and Rewards

Investing in data is a critical decision home health agencies must make.

“The data analytics firm you choose is really important to understand how to choose the right bundles and then manage the cost within those bundles.” Tramontana said.

There’s also a downside to these bundles that home health agencies will have to consider despite being able to capture more data, says Tramontana. Not all home health agencies are able to take on a longer timeline for Medicare reimbursement claims under bundled payment programs.

“The greatest challenge is that the data is not as timely as you would like,” Tramontana warns. “Until the claims are actually paid by CMS, you won’t know the actual cost of care for your patient, and it probably takes about six months to have good visibility on what the total claims were for each individual episode.”

While there is some risk involved with these models, home health agencies arguably play a pivotal role in ensuring the health of patients along the continuum of care.

“It’s the role of the home health agency and the nurse to ensure that the patient understands their discharge orders, appropriately manages their medications, has the follow-up visits that they need to have to ensure that they’re not being readmitted to the hospital unnecessarily,” says Wogen. “When you get it right, the impact is material.”

One specific success story Wogen points to was in Florida, where CareCentrix aligned a hospital and a home health agency by overlaying a single care plan for every patient leaving that hospital. Through better coordination between the health care setting, skilled nursing facility utilization dropped from 40% to 11% of patients. Hospital readmissions sunk from 10% of patients to just 2%, according to Wogen.

“Everyone recognizes and realizes at this point that we’re going to have shortages in acute care facilities and beds as you have a shifting demographic in older individuals,” says Wogen. “The home is going to have to be more of a viable option for providing care.”

Written by Amy Baxter

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