GOP Reform Won’t Trump Bundled Payments


When it comes to healthcare, one of the few things Republicans and Democrats agree upon is the need to move the United States toward a more cost- and quality-conscious system. Bundled payment programs are one mechanism for doing just that, and such models are popular on both sides of the aisle.

While the Obama administration developed two major Medicare bundles after the Affordable Care Act implementation began, some GOP-controlled states such as Tennessee pushed through bundles of their own under Medicaid. In fact, the Medicare Access and CHIP Reauthorization Act of 2015, which makes alternative payment models like bundles one of its cornerstones, received overwhelming bipartisan support in a Republican-controlled Congress. Dr. Tom Price, Trump’s pick as secretary of the Department of Health and Human Services, even voted in favor of the law, although he has since expressed concern about how the law’s rapid implementation will impact physicians.

That being said, there remains a great deal of opposition from the GOP on how bundled payments are implemented at the federal level. Providers withstood an onslaught of new payment reform programs in 2016, and the rapid pace of bundled payment program announcements along with mandatory participation requirements angered physicians and lawmakers, who criticized CMS for leaving impacted physicians little time to prepare.

Provider push-back, combined with the political climate around the ACA, will lead to some changes for Medicare bundles in particular, since they are under direct federal control through HHS. We can expect to say goodbye to unpopular mandatory participation requirements. The recently-launched Comprehensive Care for Joint Replacement model and proposed cardiovascular-focused model, which were designed with mandatory participation included for hospitals in 98 markets, may get the axe entirely or become voluntary programs. Also, expect any new programs to trickle out of CMS at a much slower pace, with more time for provider input on design and implementation.

However, bundled payment programs overall won’t look much different than they do today. Across all types of payers, bundles will still focus on common, high-cost conditions such as total joint replacements and cardiovascular surgeries because of their cost-saving potential. Most models will still include financial risk for inpatient stays plus post-acute care in order to spur improved coordination and care transitions during an episode.  Similar to what we’ve seen in Tennessee, states will still drive Medicaid bundles as a cost-containment strategy, while health plans develop their own models in the private sector.

One potential speed bump in the continued development of bundled payments is the GOP’s plan to repeal the Center for Medicare and Medicaid Innovation, better known as the CMS Innovation Center. Doing so would end federal programs like the CJR, the proposed cardio model, and the voluntary Bundled Payments for Care Improvement Initiative. However, the Trump administration may decide to spare the center and instead defer some of its authority to Congress. Plus, the new administration could utilize its power to test their own voluntary models and sustain those that are successful.  And let’s not forget that providers have already invested millions of dollars and countless hours adapting to new payment models, so there is a great deal of infrastructure already in place for value-based care.

While the ACA’s future is dark, the nationwide shift toward value-based healthcare will undoubtedly continue. Regardless of how the GOP handles the ACA, MACRA, and the CMS Innovation Center, bipartisan support for more efficient and accountable delivery systems will continue to breathe life into bundled payment models. The question, then, is not if bundled payments will survive GOP healthcare reform, but what they will look like.

Tyler Dinwiddie is an associate analyst at DRG and a bundled payments expert. Follow him on Twitter at @TylerDinwiddDRG.

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