Prospective Bundled Payments in a Changing Environment: The Experience of a Self-Funded, State-Sponsored Plan

Healthcare reimbursement, which has traditionally been based on the quantity of services delivered, is currently moving toward value-based reimbursement-a system that addresses the quantity, quality, and cost of services. One such arrangement has been the evolution of bundled payments for a specific procedure or for an episode of care, paid prospectively or through post-hoc reconciliation.

To evaluate the impact of instituting bundled payments that incorporate facility charges, physician fees, and all ancillary charges by the State of Oklahoma HealthChoice public employee insurance plan.

From January 1 through December 31, 2016, HealthChoice, a large, government-sponsored Oklahoma health plan, implemented a voluntary, prospective, bundled payment system with network facilities, called Select. The Select program allows members at the time of certification of the services to opt to use participating facilities for specified services at a bundled rate, with deductible and coinsurance covered by the health plan. That is, the program allows any plan member to choose either a participating Select facility with no out-of-pocket costs or standard benefits at a participating network facility.

During 2016, more than 7900 procedures were performed for 5907 patients who chose the Select arrangement (also designated as the intervention group). The most common outpatient Select procedures were for cardiology, colonoscopy, and magnetic resonance imaging scans. The most common inpatient procedures for Select-covered patients were in 6 diagnosis-related groups covering spinal fusions, joint replacement surgeries, and percutaneous coronary artery stenting. The allowable costs were similar for bundled procedures at ambulatory surgery centers and at outpatient hospital facilities; the allowable costs for patients not in the Select program (mean, $813) were lower at ambulatory surgery centers than at outpatient hospital departments (mean, $3086) because of differences in case mix. Patients in the Select system who had outpatient procedures had significantly fewer subsequent claims than those who were not in Select for hospitalization (1.7% vs 2.5%, respectively) and emergency department visits (4.4% vs 11.5%, respectively) in the 30 days postprocedure. Quality measures (eg, wound infection and reoperation) were similar for patients who were and were not in the Select group and had procedures. Surgical complication (ie, return to surgery) rates were higher for the Select group.

The Select program demonstrated promising results during its first year of operation, suggesting that prospective bundled payment arrangements can be implemented successfully. Further research on reimbursement mechanisms, that is, how to pay physicians and facilities, and quality of outcomes is needed, especially with respect to which procedures are most suitable for this payment arrangement.