Bringing patient incentives into the bundled payments model: Making reimbursement more patient-centric financially

Abstract

ABSTRACTIn this era of patient centricity, this article makes the simple and straightforward case for including patients in bundled payment (BP) financial incentives. We begin by briefly reviewing the key frameworks and models for provider reimbursement, including activity-based costing, cost plus pricing, diagnosis-related group classification, Medicare Cost Plus, and resource-based relative value scale. Given these previous approaches, we argue that, in many ways, the BP model is an exemplar of reimbursement innovation. We then explore key elements of incorporating payoffs for patients, including care redesign, continuum of care, core competencies, cost cutting, applying metrics, and creating a collaborative BP network. The article concludes by discussing future challenges and opportunities for embedding patient financial incentives within the BP model. The high level of political and regulatory uncertainty at the state and federal levels makes this a ripe time for experimenting with financially compensating patients for their role in helping providers accomplished the key metrics required for BP compensation. Bringing patients into the fold financially holds the potential to solidify episode-based payments as a fundamental element of the alternative payment models promoted by Centers for Medicare & Medicaid Services (CMS) and private payers.