Bundled payments get a boost in two states with employee programs

December 11, 2019

New bundled-payment arrangements by Maine and Connecticut for their state employee health plans could accelerate the current sluggish growth of that value-based model in the private sector.

Carrum Health announced Tuesday that Maine has started to offer state employees, early retirees and dependents access to the company’s center-of-excellence program, which pairs patients with selected providers for more than 100 musculoskeletal, bariatric and cardiovascular procedures.

Connecticut similarly will offer Carrum’s network to members of its state employee benefit plan starting sometime next year, the company said.

Maine patients initially have access to those services at New England Baptist Hospital in Boston and Connecticut Joint Replacement Institute in Hartford. A Maine health system soon will join Carrum’s network, said Sach Jain, CEO of the San Francisco-based company.

Patients also can receive services at any center in Carrum’s network across the country, including in San Francisco, San Diego, Seattle, Chicago and Columbus, Ohio.

Patients who use one of Carrum’s network providers don’t have to pay a deductible or any cost-sharing, Jain said. In addition, transportation costs for the patient and a caregiver are fully covered by the employer plan.

Jain said self-insured employers whose plan enrollees use Carrum’s network typically pay 35% less than they would otherwise pay for the service. Eligibility, payment arrangements, and other logistics are streamlined through Carrum’s cloud-based platform.

Carrum defines bundles much like CMS’ Bundled Payment for Care Improvement Advanced program does. Carrum pays a fixed price for each episode of care, which covers a consultation with the center to assess surgery appropriateness and hospital admission or outpatient procedure, including all facility and professional expenses. Each bundle also comes with a 30-day warranty that covers all readmissions or complications related to the surgical episode.

Hospitals and physician groups participating in the CMS’ bundled-payment programs say private payers have been slow to embrace these fixed-payment models despite Medicare’s generally favorable experience with bundles.

In contrast, some large employers like Walmart, Boeing and United Airlines as well as employer coalitions like the Pacific Business Group on Health have been using center-of-excellence programs based on bundled payment for several years in an effort to reduce costs and enhance quality of care.

Smaller, self-insured employers are less able than large employers like Walmart to establish a center-of-excellence program on their own. That’s where vendors like Carrum may prove useful, said Robert Huckman, a Harvard University professor of business administration and member of Carrum’s advisory board.

He said the company is contracting with high-quality local providers, making it unnecessary for patients to travel across the country to receive care at centers like the Cleveland Clinic and Johns Hopkins Medicine.

“I don’t think patients love the idea of traveling when they need healthcare,” said Huckman, who wrote a case study of the Carrum model earlier this year. “But what if you could put together a good network of high-quality providers and potentially get outcomes comparable to the brand-name institutions? That’s a hurdle that bundled models need to get over.”

Jain said he hopes his company’s efforts help speed the transition to bundled payment for episodes of care, which he sees as a more viable value-based payment model for providers than accountable care organizations.

“Before, hardly any providers in Maine were interested in bundles,” he said. “But now that a large, sophisticated employer like the state of Maine is seeing the potential, providers there are very interested in working with us. It greases the wheels for more providers to adopt bundled payments.”

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