Are we ready for bundled payments for major bowel surgery?

Abstract

The Centers for Medicare & Medicaid Services (CMS) recently announced a new voluntary episode payment model for major bowel surgery. The purpose of this study was to examine the financial impact of bundled payments for major bowel surgery. An institutional database was retrospectively queried for all patients who underwent major bowel surgery between July 2016 and June 2018. Procedures were categorized using MS-DRG coding: MS-DRG 329 (with MCC, major complications and comorbidity), MS-DRG 330 (with CC, complications and comorbidity), and MS-DRG 331 (without CC/MCC). A total of 745 patients underwent 798 procedures, with mean age 62.1years and BMI 29.2kg/m2. The median LOS was 4.0days, with 12.5% of patients being discharged to a post-acute care facility for an average of 38.5days. The mean hospital cost was $18,525. The mean payment to a post-acute care facility was $423 per day. The 90-day readmission rate was 8.6% at an average cost of $12,859 per readmission. Patients with major complications and comorbidity (MS-DRG 329) had higher CMS Hierarchical Condition Categories scores, longer LOS, higher costs, more required home health services or post-acute care facilities, and had higher 90-day readmissions. In a fee-for-service model, hospital reimbursements resulted in a negative margin of -8.2% for MS-DRG 329, -2.6% for MS-DRG 330, but a positive margin of 2.8% for MS-DRG 331. In a bundled payment model, the hospital would incur a loss of -13.1%, -11.1%, and -1.9% for MS-DRG 329, 330, and 331, respectively. Patients undergoing major bowel surgery are often a heterogeneous population with varied pre-existing comorbid conditions who require a high level of complex care and utilize greater hospital resources. Further study is needed to identify areas of cost containment without compromising the overall quality of care.