Bundled Payment Report Illustrates Increased Demand for Home Health

Home health agencies continue to prove their worth in bundled payment programs, and new data from Chicago-based health care consulting firm LewinGroup supports this claim.

LewinGroup analyzed health care providers who are participants in the Centers for Medicare & Medicaid Services’ (CMS) Bundled Payments for Care Improvement (BPCI) initiative. The program was established to gauge whether linking payments for all providers involved in delivering an episode of care can reduce Medicare costs, while maintaining or enhancing the quality of care.

Providers—also known as BPCI Awardees—can include hospitals, physician groups, post-acute care providers, skilled nursing facilities (SNFs) and home health agencies (HHAs), among others.


If there’s one thing the report illustrates, it is the realization by other players in the health care industry of the value home health brings in the post-acute care continuum.

The full report, compiled by LewinGroup for CMS, is available here.

By the numbers


Between October 2013 and September 2015, a total of 116 HHAs participated in CMS’ BPCI program, delivering care in 35,000 episodes, according to the report.

Among key findings in the report relating to home health include:

Baseline Payments 
BPCI-participating HHAs had baseline payments that were $1,674 (21%) higher than non-participants. This is because HHAs tend to pick the most expensive bundles where they feel they can make the most impact, according to Chris Garcia, CEO of Darien, Connecticut-based health care consulting and software provider Remedy Partners.

CHF Success
For patients living with congestive heart failure (CHF), HHAs achieved a $970 relative reduction in CHF payments for the qualifying hospitalization, plus 90 days post-hospital discharge, resulting in payments that were 3.6% lower than they would have been without BPCI.

Shift to Home Health
Among patients who received any post-acute care (PAC), the percentage discharged to institutional PAC facilities declined in 61% of clinical episodes, particularly for major joint replacement and cardiac valve replacement patients, as well as patients living with respiratory diseases. Further, the number of days patients were admitted in a skilled nursing facility (SNF) declined for BPCI patients who used SNF care.

The lowest-cost option

The health care industry’s focus on sending patients into the home setting has become a key takeaway for Garcia. At Remedy Partners, he and his team consult with more than half of the health care providers participating in the BPCI program.

“The impact of the new incentive is getting [health care providers] to rethink … where they send patients,” Garcia told Home Health Care News. “We are seeing an increase in the utilization of home health services and a corresponding decrease in the utilization of facility-based care—whether it’s a SNF or an in-patient rehab facility.”

More and more patients are choosing the home as their preferred recovery setting, and providers are realizing it is also the lowest-cost platform, Garcia explained.

“Home health agencies are perfectly equipped to be able to help that patient recover in their home and provide them with services that would allow them to have a very effective and efficient recovery,” he said. “[This] means an increased need and an increased requirement of skilled home health services.”

The reporting period the LewinGroup analyzed in its report reflects only a portion of new entrants into the BPCI program, with many more entrants joining in the third and fourth quarter of 2015, according to Garcia.

“The measurement period still does not adequately capture the majority of the participants of the program when they’re running at 100%,” he said. “The conclusion that Lewin draws from the data, does not adequately represent the successes or failures of the program. One of the major learnings from anybody participating in this program is that it takes time to redesign care.”

Despite this, Remedy Partners has seen the effectiveness of bundled payments. In June, the company reported a $500 million reduction in the cost of unnecessary medical expense from its bundled payments programs over the past year at more than 1,000 healthcare locations in 43 states, according to a company statement.

“Everybody is winning from this program—the government is reducing their spend, which is going to elongate the Medicare trust fund [and] we’re getting people to put the patient back into the equation,” Garcia said.

Written by Carlo Calma

Companies featured in this article:

, ,