Bundled Payment Wisconsin Home Care Path

Wisconsin Health Planning Groups now see the Medicare payment system as fragmented, and believe paying providers on volume is inefficient. In cooperation with WHIO the Wisconsin Health Information Organization is the Wisconsin Payment Reform Initiative. The focus of the Wisconsin Payment Reform Initiative is to develop a bundled payment process for diagnosis specific hospital stays.

Bundled Payment is defined as the reimbursement of a health care organization on the basis of expected costs for clinically defined episodes of care. This is seen as different than fee for service in which health organizations are paid for each service rendered to the patient. Also different than capitation in which health organizations are paid a lump sum per patient regardless of how many services the patient receives.

Bundled payments were first noted in 1984 when the Texas Heart Institute began to charge flat fees for cardiovascular surgery. Today, the Patient Protection and Affordable Care Act and the Affordable Care For America Act contain provisions for bundled payments.

The idea behind bundled payments is to lower the cost paid for the services (save the Medicare system money) while maintaining a high level of care (good patient outcomes). Note the health delivery system can involve the participation of many separate Medicare certified providers. This adds to the challenge of introducing bundled payments to the landscape of Wisconsin providers.