Synchronization of coverage, benefits, and payment to drive innovation

More than 35% of Medicare beneficiaries receive care from providers operating under some form of shared savings/risk type of pay-for-performance incentive. Implementation of payment reform without a corresponding change to coverage, benefit, and other payment requirements, however, creates conflicting incentives that may nullify the intended aim of payment reform: to improve health outcomes, while saving costs. If related policies do not evolve to align with payment reform, those entities contracted to receive new bundled payments, such as hospitals or physician groups, will only be able to redesign care to the extent that care meets the myriad of related payment policy requirements. Shifting greater medical management authority from payers to entities managing the payment bundles is a gradual process, as the experience of commercial payers proves. Transitioning the responsibility for modifying coverage, benefit, and payment requirements from CMS to principal accountable bundlers (PABs) will depend on the PAB's degree of financial risk sharing as well as scope of the episode.