Exploring the Implementation of Prospective Bundling in Health Insurance

Calvin Glenn
Digital Marketing Manager

Kathy McCarthy, Director of Sales Consulting for Oracle Health Insurance, discusses the topic of Prospective Bundling in today's post.

Prospective Bundling has gained much attention lately among health plans, mainly due to the Centers for Medicare & Medicaid Services (CMS) Comprehensive Care for Joint Replacement initiative. In an effort to reduce costs for joint replacement and improve care, CMS is paying for a majority of these now as bundled cases. This means all providers who treat a patient have to share one bundled payment for that procedure. This includes any foreseeable complications and readmissions.

This type of episodic payment can also be applied to other high cost procedures such as CABG. Today, most bundled payment models are retrospective, meaning adjustments are made post care delivery. This makes it possible to build bundled payment on a fee-for-service base, “truing up” when the episode is over. 

Most payers would prefer to pay these types of episodes on a prospective basis at the time the procedure is requested; however, most current legacy systems are ill-equipped to process this type of claim. In a retrospective model providers continue to bill their fee for service rates whereas in a prospective model they have negotiated a rate and are paid a percentage of a set fee. Once established, the prospective rates can help both providers and payers. Payers can more accurately predict costs of care, and providers know their payment upfront and can coordinate care based on that factor and reduce their risk.

When transitioning to bundled payments, health plans need to be able to use technology to reduce risk for both the payer and providers, decrease total cost of care while increasing quality and improve operational efficiency. 

Oracle Health Insurance Value-Based Payments component is a stand-alone platform for processing non-fee-for-service payments that can help with these requirements and ease the transition to prospective bundled payments. The component can be used with any existing claims payment system with little disruption to your daily operations.

Visit us in person at one of these upcoming conferences and learn how your organization can make the transition to prospective bundling easier and more efficient.

  • Blue National Summit – May 16-19 in Orlando, FL
  • National Bundled Payment Summit – June 7-9 in Washington, DC
  • AHIP’s Institute – June 15-17 in Las Vegas, NV
  • Western Operations Conference – June 26-29 in Albuquerque, NM

You may also want to read our recent white paper, “Health Care Reform: The Role of Bundled Payments.” Download now.

For more information on Oracle’s solutions for healthcare payers, go to oracle.com/insurance.

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