Three Health Systems, Three Bundled Payment Models

Alexandra Wilson Pecci, for HealthLeaders Media, September 28, 2015

Three organizations discuss their experiences with CMS’s bundled payment initiative.

For 120 years, Lawrence, Massachusetts-based Home Health Foundation has considered itself an innovative organization, so when it got the chance to participate in Model III of CMS’s Bundled Payments for Care Improvement (BPCI) initiative, Peg Doherty, senior vice president of Operations and Strategic Planning, says the decision was a “no-brainer.”

“We definitely wanted to do it,” she says. “We took the risk not so much to make money, [but] . . . to put our money where our mouth is and really deliver on what the system expects us to deliver on right now.”

What the system expects them to deliver is care that’s both high-quality and cost-efficient. And that’s what the BPCI initiative is ultimately trying to achieve.

“The best care is usually the lowest cost care. That’s just a fact,” Doherty says. “Bad care costs money. Frequent rehospitalizations, frequent emergency room visits, lots of infections; all that costs money. So, the best care delivers the best clinical outcome most efficiently.”

As of mid-August, 360 organizations have entered into bundled payment agreements with CMS. An additional 1,755 organizations are partners in the program. Within the initiative are four models that vary by episodes of care, services included in the bundle, and whether the payments are retrospective or prospective.

“Over the course of the initiative, CMS will work with participating organizations to assess whether the models being tested result in improved patient care and lower costs to Medicare,” according to the BPCI initiative’s website.

Home Health Foundation is participating in Model III, which is for retrospective post-acute care only, in the congestive heart failure bundle for 60-day episodes of care.

“We’re responsible for the 60 days of care starting on the first day that we provide care,” Doherty says. “Once [patients are] under our care, we’re responsible for all of their emergent, and pretty much all of their elective readmissions and all of their post-acute care.”

She says the only way a post-acute provider can “beat the bet financially, is by preventing re-hospitalization.”

“The largest chunk of money that’s spent post-acute is in rehospitalization,” she says. “Almost 50% of the cost that’s associated with the bundle is for rehospitalization. And we’re on the hook for rehospitalization; and if after the rehospitalization they go to an SNF [skilled nursing facility], we’re on the hook for that; and if they’re in SNF, then go to another home health agency, we’re on the hook for that.”

It’s a big risk, Doherty acknowledges, but she also believes it’s an “important” one for her organization.


Jeffery D. Hurst, senior vice president and senior finance officer at Florida Hospital agrees, and he would advise other healthcare leaders to take advantage of pilots such as the bundled payment program now.

Jeffery D. Hurst

Jeffery D. Hurst

“Healthcare, and the future of healthcare, is about change and transformation, so take advantage of innovation pilots such as BPCI to prepare your organization,” he says by email. “Start small, learn as much as you can, and then transition rapidly and effectively to our new future.”

Florida Hospital is participating in Model IV, where the period for the clinical episode is 3 days before admission, the admission itself, and 30 days post-discharge. Payment is prospective, rather than retrospective. Hurst says that Florida Hospital selected Model IV because it believed that the model provided more financial stability and predictability than the others did.

“We believe we will have to accept more risk as we progress with our transition, but our preference is to do so in a manner that allows for as much financial stability and predictability as possible,” Hurst says.

Florida Hospital included 12 clinical episodes (valve DRGs 216–221 and coronary artery bypass graft DRGs 231–236) in its pilot, which formally launched on January 1, 2014. Currently, its participating providers include 125 physicians in 10 different groups across multiple specialties.

“Going forward, we intend to maintain our focus on clinical performance, including readmissions and LOS, but also supply utilization and cost. Additionally, we still have improvements to achieve in our various revenue cycle processes, specifically as it relates to payment timeliness and payment accuracy,” Hurst says.

“Lastly, we want to improve the granularity, sophistication, and timeliness of our metrics and analytics, as we believe our ability to effectively understand our data in as timely a manner as possible will be key to our success on all outcomes, clinical and financial.”


Geisinger Health System has already seen improvements since it started Model II on January 1, 2014, at three hospital campuses: Geisinger Wyoming Valley, Geisinger Medical Center, and Geisinger-Shamokin Area Community Hospital.

John Bulger, DO, MBA, chief medical officer for the Geisinger Health Plan, says the data shows that “it’s improved with every quarter,” both financially and for decreasing variation in patient care across providers.

But bundled payments aren’t new for Geisinger, which has “been doing bundled payment for some time in a partnership between our clinical enterprises and our health plan,” Bulger says. Bundling “engenders collaboration between providers,” he adds.

00 john bulgar

John Bulger, DO, MBA

Now, in working with CMS, post-acute partners are involved too. That’s certainly changed the game, because Bulger says most cost is in the post-acute space.

“The way to impact that is preparation upfront,” Bulger says. That involves things such as risk stratification for the patient before surgery: Which patient has uncontrolled diabetes? Who might benefit from a smoking cessation program? It involves asking whom the patient will see throughout his or her care experience.

“You’re really taking it apart soup to nuts,” Bulger says. In that way, bundled payments not only align providers and incentives, but “in the long run, it’s much better for the patient as well.”

For her part, Doherty says it’s too soon to tell whether the risk for Home Health Foundation will pay off, but she is optimistic.

“If we can prevent unnecessary emergency room visits and unnecessary hospitalizations, patients will have better clinical outcomes, and we will also have good financial outcomes,” she says. “Organizations that embrace this . . . should be applauded for their willingness to take a risk and have a vision as to how it might be better for patients.”

Related Links:

Rocky Edmondson RN, BSN, MBA, CCRN
Senior Director, Bundled Payments, Care Redesign and Management Advisors, xG Health Solutions

Rocky Edmondson is the Senior Director of Bundled Payments for Care Redesign and Management Advisors at xG Health Solutions. Rocky has been involved in workflow redesign, program implementation, and analytic evaluation of Bundled Payment Programs across the country, and he coaches Hospitals, Health Systems, Post-Acute Providers, and Physician Groups on how to successfully implement care redesign in the Bundled Payment for Care Improvement (BPCI) and CJR Programs.

Rocky’s passion is helping people to understand the intricacies of Bundled Payment Programs. He has a talent for teaching people how to cut through all the noise and just do the things that matter to be successful in these programs.

Rocky holds an Associate’s Degree in Nursing from the University of Hawaii Maui, and a Bachelor’s Degree in Nursing and a Master’s Degree in Business Administration (MBA) from Boise State University.

Prior to joining xG Health Solutions, Rocky was the Southeast Region Director of Clinical Operations for Remedy Partners, overseeing program design, implementation and analytic evaluations for Bundled Payment Programs. Prior to embarking on a career in Bundled Payments, Rocky was a Registered Nurse for 18 years, working in a number of positions within Critical Care. Before becoming a Nurse, Rocky was an Institutional Broker at Merrill Lynch and advised a number of healthcare systems and large corporations on cash management strategies. In addition, Rocky has started several businesses and provided consulting for small business startups. Rocky served in the U.S. Marine Corps as a Recon Marine.

Janet Comrey RN, BSN, MHSA
Director, Population Health Solutions, Geisinger Health System

Janet Comrey, RN, BSN, MHSA has over 30 years of diversified nursing and leadership experience at Geisinger Health system and currently serves as Director of a small department embedded within Population Health. One of her key roles is managing the Bundle Payment for Care Improvement (BPCI) program since January 2014 earning an overall positive net payment reconciliation to date. Janet also serves as the coordinator for Project Achieve at Geisinger which is a national PCORI funded study related to patient’s perceptions of transitions of care.

Janet received her nursing education through Geisinger’s diploma program, her BSN through Bloomsburg University, and later earned her graduate degree from Marywood University. During her tenure at Geisinger she taught quality improvement methodology and facilitated improvement teams the Geisinger Quality Institute. She is currently enrolled in the Institute for Healthcare Improvement Advisory program.

Professional memberships include Sigma Theta Tau, Phi Kappa Phi, American Society for Quality.

Andrew Blackmon, MBA, MHS
Chief Sales and Business Development Officer

Chief Sales and Business Development Officer Andrew Blackmon, MBA, MHS, has more than 18 years of experience in healthcare product sales, marketing, and strategy.

Before joining xG Health, Andrew was vice president of sales for population health and risk management solutions at McKesson. He came to McKesson through acquisition of MedVentive, an early population health vendor. Before MedVentive, he served as vice president of enterprise solutions development at MedAssets. He is a past president of the Georgia chapter of HIMSS, and he has held strategy and planning positions at PricewaterhouseCoopers and Orlando Health.

Andrew has an MBA and a Master’s of Health Science from the University of Florida Warrington, College of Business, and a Bachelor of Arts degree in Psychology from Rollins College.

Holly Barbella, RN, MBA

Risk Coordinator, Geisinger Health System

fuvb ekfhve v

Earl P. Steinberg, MD, MPP
Chief Executive Officer

Earl P. Steinberg, MD, MPP, is a nationally recognized expert in healthcare quality improvement and serves as xG Health’s chief executive officer. Earl also is an adjunct professor of Medicine and of Health Policy and Management at Johns Hopkins University and a member of Blue Cross/Blue Shield Association’s National Medical Advisory Panel.

Before joining xG Health, Earl was executive vice president of Innovation & Dissemination, and chief, Healthcare Solutions Enterprise at Geisinger Health System.

Before joining Geisinger, he was senior vice president for Clinical Strategy, Quality & Outcomes at WellPoint, Inc., the largest commercial health insurer by membership in the US, and president and CEO of Resolution Health Inc. (RHI), a leading healthcare data analysis company that provides innovative quality improvement and cost reduction services to health plans, employers, pharmacy benefit managers, and disease management companies.

Before joining RHI, Earl spent six years as vice president of Covance Health Economics and Outcomes Services Inc., director of its Quality Assessment and Improvement Systems Division, and co-director of its Outcomes Studies Group. He also spent 12 years on the full-time faculty at Johns Hopkins University, where he was professor of Medicine and of Health Policy and Management and director of the Johns Hopkins Program for Medical Technology and Practice Assessment, and four years on the Federal Physician Payment Review Commission. He co-chaired the Institute of Medicine’s panel on Standards for Development of Trustworthy Practice Guidelines.

Earl has received many awards, including the Henry J. Kaiser Family Foundation Faculty Scholar Award in General Internal Medicine (1984), the “Outstanding Young Investigator” Award from the Association for Health Services Research (1988), and a Special Presidential Visionary Award from the National Kidney Foundation (NFK) (2004) for his work as the scientific director of the NKF’s landmark Kidney Disease Outcomes and Quality Initiative, which produced more than 250 clinical practice guidelines for management of patients with end-stage renal disease. He also is a fellow of both the American College of Physicians and AcademyHealth, and he has published more than 125 articles in peer-reviewed journals.

Earl received his AB from Harvard College (summa cum laude), his medical degree from Harvard Medical School, and a Master of Public Policy from the Kennedy School of Government. He performed his residency training in internal medicine at Massachusetts General Hospital.