Earlier this month, Minnesota-based UnitedHealthcare announced it was expanding the company’s bundled payment offerings to providers participating in its Medicare Advantage (MA) plan networks.
Home health care is primed to play a major role in that expansion, Jeff Meyerhofer, president of bundled payment solutions for UnitedHealthcare’s Medicare & Retirement division, told Home Health Care News via email.
“Home health care is an important part of the picture,” Meyerhofer said. “Post-acute care — encompassing home health [and] skilled care — is squarely in the scope of our bundled payment efforts. Broadly, our clinical model is focused on enabling end-to-end care coordination and total cost of care management, of which post-acute care is a major focus area.”
The insurer’s bundled payments initiative — known as the UnitedHealthcare Care Bundles Program — builds upon its existing work for the Centers for Medicare & Medicaid Services (CMS) and the agency’s Bundled Payments for Care Improvement Advanced (BPCI Advanced) program for fee-for-service Medicare.
The UnitedHealthcare Care Bundles Program will also offer care providers in more than 30 states the opportunity to participate in bundled payment models for patients enrolled in UnitedHealthcare Medicare Advantage plans for certain procedures, including hip and knee replacements, spinal fusions and coronary bypasses.
In general, bundled payments emphasize high-quality, coordinated health care at a lower cost by setting price and quality standards for procedures and follow-up treatments. Providers are then rewarded for exceeding those standards.
Bundled payments are a shift away from the common fee-for-service model that pays for various treatments. On a high level, they are among the stream of innovative payment models the home health industry has seen in recent years, in addition to other value-based and risk-sharing arrangements.
Industry leaders recently identified innovative payment models as one of the biggest disruption forces currently facing the home health industry.
By the end of 2020, UnitedHealthcare expects to have $75 billion in care provider reimbursements tied to value-based arrangements annually. Currently, more than 3 million people enrolled in UnitedHealthcare MA plans are treated by care providers in value-based models.
“Our bundle offerings will encompass most Medicare-covered services from the initial in-patient stay, post-acute period and readmissions during a period following initiation of the episode,” Meyerhofer said. “For certain episodes included in the program — for example, joint replacements — post-acute care providers will have an opportunity to bear financial risk. In addition to bundled payments, we also offer a variety of alternative value-based payment structures to post-acute providers.”
Bundled payments create aligned incentives across the care continuum, according to Meyerhofer, helping to improve health outcomes and the experience of UnitedHealthcare members, while also encouraging better care coordination.
UnitedHealthcare — an operating division of UnitedHealth Group (NYSE: UNH), the largest single health carrier in the U.S. — reported in 2018 that its spine and joint bundled program offered in commercial accounts saved about $18,000 per procedure for participating employers. The program likewise achieved a 22% reduction in hospital readmissions.
Results have been mixed when it comes to the success of CMS’s bundled payment initiatives.
For example, the basic Bundled Payments for Care Improvement program has resulted in the Medicare program losing hundreds of millions of dollars thus far, an October 2018 report by health care consulting firm the Lewin Group found.
Post-acute providers — including home health and skilled nursing agencies — are not allowed to be episode initiators under the BPCI Advanced model, launched on Oct. 1, 2018.