If you’ve been in business for a while now, you’ve probably gotten pretty used to the standard healthcare fee-for-service payment model: you provide a service, you bill for said service, and then you get paid for that service. Well, times are a changin’. While practitioners will still provide services and receive payment, that payment will soon be dependent on performance (i.e., outcomes data). In other words, you’ll get paid based on the value you offer your patients—not the volume of services you provide. And in some cases, payment will be based on the value an entire team of practitioners provides a patient—à la healthcare bundled payments.

Stalled Out: 5 Reasons Your Patients Are not Progressing (and What to Do About Them) - Regular BannerStalled Out: 5 Reasons Your Patients Are not Progressing (and What to Do About Them) - Small Banner

The General Scoop on Bundled Payments

So, what are bundled payments? According to WebPT’s Brooke Andrus—citing this Association of Health Care Journalists (AHCJ) article—“a bundled payment model is one in which ‘an insurer sets a single price for all providers (physicians, hospital, and any post-acute providers) involved in doing a procedure or delivering an episode of care.’” From an efficiency standpoint, Andrus writes, “the idea is that because all of the providers involved in a particular episode of care must work under a single budget, they’re more inclined to work together to eliminate the provision of unnecessary services.”

The shift to a value-based payment paradigm means more bundled payment programs.

According to Tamara Rosin—in this Becker’s Healthcare article—“Bundled payments are emerging as an increasingly important element of the healthcare industry's shift from volume- to value-based care, as CMS seeks to lower healthcare expenditures and providers aim to achieve the triple aim: providing the best possible care at the lowest price and improving the overall health of a population.” Luckily, there are already opportunities for rehab therapists to participate in—and potentially profit from—bundled payment programs.

CJR: A Therapist-Relevant Bundled Payment Program

The first bundled payment model that was clearly relevant to rehab therapists was the Comprehensive Care for Joint Replacement (CJR) model. According to CMS, “effective implementation of the CJR model will improve the quality and efficiency of care for Medicare beneficiaries, which is essential to creating a health care system that delivers better care, spends our dollars more wisely, and leads to healthier Americans.” Sounds good, right? Well, as I explained in this article, things can really only go up post-CJR implementation. That’s because in 2014 alone, surgeons performed more than 400,000 total hip and knee replacements on Medicare beneficiaries—yet there was no consistency in terms of quality of care or costs. In fact, CMS said that “the rate of complications like infections or implant failures after surgery can be more than three times higher at some facilities than others, increasing the chances that the patient may be readmitted to the hospital.” That left Medicare footing a bill for surgery, hospitalization, and recovery that averaged anywhere between $16,500 to $33,000.

Hospitals dedicated to exceptional care stand to benefit financially.

Enter CJR. Under this new model, CMS is holding participating hospitals financially responsible for the quality and cost of entire CJR episodes of care—from admission to 90 days post-discharge—including rehabilitation services. To put it simply, CMS will set a target price for a CJR episode of care at each participating hospital. If the hospital spends more than the target price, then that hospital must pay Medicare the difference. However, if the hospital spends less than the target price, then Medicare will pay the hospital the difference. CMS estimates that this five-year program will result in $153 million in savings.

So do qualified collaborative providers—including rehab therapists.

With so much money on the table, hospital administrators are even more motivated to partner with excellent rehabilitation therapists to ensure the best possible outcomes for their CJR patients—at the lowest possible costs. In his 2016 Ascend presentation, compliance expert Rick Gawenda explained that CJR enables participating hospitals to establish financial agreements with rehab therapists, through which the therapist can share in the financial risk and reward of CJR cases. To learn more about the details and exclusions of the CJR program, check out this post and this one.

The Great Bundle Debate

As WebPT’s Charlotte Bohnett discussed here, CJR has many therapists asking themselves the question: to bundle, or not to bundle? Unfortunately, there is no easy answer, and the right decision for one therapist may be totally wrong for another. As Andrus explained, while bundled payment models aren’t yet the norm, providers shouldn’t necessarily rule them out. After all, as the author of this Impact article said, “For physical therapists to be leaders in providing cost-effective, expert musculoskeletal care in an evolving health care system, we must dedicate ourselves to innovation and collaboration.” CJR has elements of both.

Therapists interested in participating in bundles should thoroughly evaluate their own practices—and potential hospital partners—before signing on.

Still on the fence? In her post, Bohnett included several questions that Gawenda recommends all therapists ask themselves before entering into a bundled payment agreement with a participating hospital:

  • “Do I receive referrals for Medicare beneficiaries who have had THAs or TKRs at a CJR hospital?
    • “If yes, how many referrals per month or per year do I receive?
    • “And how many visits does that translate into over the course of a calendar year?
  • “What is the CJR Hospital CMS Star Rating?
  • “Do I know my cost per episode for a THA and TKR patient?
  • “Do I collect outcomes data on my THA and TKR patients?
  • “Do I know—or am I at least aware of—the other collaborators involved in the care of my participating CJR beneficiaries?
  • “Do I know the star ratings of those other collaborators?
  • “Do I understand how the total cost of care per beneficiary is calculated?
  • “Do I understand how quality measures and quality scores impact target pricing?
  • “Do I know if the CJR hospital will perform the optional quality measures?
  • “Do I have a healthcare attorney who understands CJR bundling and has my best interests in mind?”

While all these questions are important, that last one’s a doozy. Before you enter into any financial agreement, be sure to discuss it with an experienced healthcare attorney who understands you, your practice, and your patients. To see if there’s a CJR-participating hospital near you—and to see a pro/con list for accepting bundled payments—check out this article.

Download your 2018 State of Rehab Therapy report now.

Enter your email address below, and we’ll send you a free comprehensive report on the trends shaping the future of the industry.

Please enable JavaScript to submit form.

The Importance of Good Data

Now, you may be wondering what role data collection plays in bundled payment models. According to Rosin in the above-cited Becker’s Healthcare article, “succeeding under bundles requires robust data analytics to help providers identify the main drivers of spending and opportunities to rein in costs and improve outcomes.” For hospitals, “optimizing patients, or preparing them for surgery by mitigating comorbidities and creating a comprehensive discharge plan, increases the likelihood that the patient can be discharged to the home instead of a skilled nursing home or inpatient-rehab, which are more expensive and increase the likelihood of a readmission,” Rosin said. And if you are a collaborative provider—such as a rehab therapist—then using a software platform with a robust outcomes tracking tool will enable you to not only better market yourself as a provider a hospital should want to partner with, but also objectively monitor—and communicate—your results.

Bundled payment models require providers to collect—and share—quality outcomes data.

According to the APTA, “the ability to measurably demonstrate objective results is critical in the pursuit and development of collaborative health care relationships. This will require you to be up-to-date on clinical practice guidelines and protocols as well as to be able to document your adherence to evidence-based practices sufficiently, and share your data with bundle partners.” (Interoperability, anyone?). As I explained in this post, “whether it’s to become a CJR collaborator or to participate in any one of the other alternative payment models that will be coming down the pipeline, quality data is crucial.”


So, where you do you fall in the bundled payment debate? To bundle, or not to bundle? Tell us your thoughts—and experiences—in the comment section below.

  • 4 Reasons PTs Can’t Afford to Ignore Coding Reform (PTCPS Special Report, Part 3) Image

    articleFeb 15, 2016 | 6 min. read

    4 Reasons PTs Can’t Afford to Ignore Coding Reform (PTCPS Special Report, Part 3)

    For most PTs, coding for service charges is kind of an afterthought—something they do at the end of the day, after they’ve finished up all of their paperwork. It’s a task that—while not the most exciting endeavor—is fairly straightforward: find the CPT code that matches the service provided, calculate the correct number of units, record everything appropriately, and move on to bigger and better things (i.e., treating and healing patients). But, in less than a year, that …

  • Beyond FFS: Why a Risk-Based Payment Model Could be Your Best Bargaining Chip Image

    articleJun 23, 2017 | 8 min. read

    Beyond FFS: Why a Risk-Based Payment Model Could be Your Best Bargaining Chip

    If you’ve ever negotiated a payer contract , you probably focused on convincing that insurer to simply bump up your rates. However, with healthcare reform moving full steam ahead, this might not be the best—or most lucrative—approach. Rather, therapy practices may want to put risk-based proposals on the table (i.e., those that allow for larger or smaller payments based on outcomes). After all, value-based payment models will soon be the new norm, and it could pay—literally—to be …

  • The Complete History of the New PT Payment System (PTCPS Special Report, Part 1) Image

    articleFeb 9, 2016 | 14 min. read

    The Complete History of the New PT Payment System (PTCPS Special Report, Part 1)

    If you’re a PT, then the numbers 97001, 97110, 97140, and 97530 probably are as deeply ingrained in your memory as the average person’s street address, phone number, or birthday. Well, what if I told you that in less than two years’ time, those numbers—and the CPT codes they represent—actually could become nothing more than a memory? If that sounds like crazy talk to you, then allow me to introduce you to the APTA’s proposed Physical Therapy …

  • Triumph in the Triple-Aim Game: The Healthcare Executive’s Guide to Readmission Reduction, Patient Safety Promotion, and ACO Success Image

    downloadSep 28, 2016

    Triumph in the Triple-Aim Game: The Healthcare Executive’s Guide to Readmission Reduction, Patient Safety Promotion, and ACO Success

    The Affordable Care Act (ACA) and other reform efforts have brought forth a renewed emphasis on care coordination at all points along the care continuum—including the period after hospital discharge. As part of this push, new financial incentives and penalties have put healthcare executives at the center of a high-pressure game of tug-of-war in which they must simultaneously improve care quality and reduce costs. Talk about a catch-22. Enter your email address below to download this guide …

  • How Outcomes Tracking Fosters Quality Care Image

    articleFeb 3, 2016 | 4 min. read

    How Outcomes Tracking Fosters Quality Care

    You know you do darn fine work as a rehab therapist—and we do, too. But when asked to prove your value as a healthcare provider to patients, payers, and the rest of the healthcare industry, do you resort to anecdotal evidence of patient improvement, or do you have at your disposal cold, hard, irrefutable facts (a.k.a. outcomes data) about the results you and your patients achieved? Unfortunately, many PTs and OTs are still relying on the former—and …

  • 7 Shades of Coding Controversy (PTCPS Special Report, Part 2)  Image

    articleFeb 11, 2016 | 16 min. read

    7 Shades of Coding Controversy (PTCPS Special Report, Part 2)

    In the first post of this three-part series, I provided an in-depth look at the history and philosophy behind the APTA’s proposed Physical Therapy Classification and Payment System (PTCPS). If adopted—and as of now, that looks pretty likely—this CPT coding overhaul would completely change the way physical therapists code for the services they provide. The kicker? PTs could be required to begin using the new codes—some of them, anyway—as early as January 1, 2017, with full implementation …

  • Founder Letter: My Evaluation of the New PT and OT Eval Codes Image

    articleNov 3, 2016 | 5 min. read

    Founder Letter: My Evaluation of the New PT and OT Eval Codes

    Over the last several years, healthcare providers in general—and rehab therapists, specifically—have been hit with a seemingly constant barrage of regulatory requirements. And the vast majority of these initiatives—PQRS, functional limitation reporting, MPPR, ICD-10, and the like—have either: Had a direct negative impact on our payments, or Forced us to devote extra time to satisfying the criteria of the requirements—with zero compensation for that time. So, it should come as no surprise that the rehab therapy community …

  • Odd Provider Out: Why PT Exclusion from MIPS is Bad for Future Payments Image

    articleMay 4, 2016 | 6 min. read

    Odd Provider Out: Why PT Exclusion from MIPS is Bad for Future Payments

    It’s official: rehab therapists are just a sashay away from exiting the PQRS dance floor. That’s because last week, the Centers for Medicare & Medicaid Services (CMS) issued a proposed final rule that, if adopted, will put into effect the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA). And that, in turn, will give the green light to the Merit-based Incentive Payment System (MIPS) , a brand spankin’-new quality data reporting program that consolidates PQRS , …

  • Taking Charge: The Proposed PT Payment Remodel Image

    articleMay 18, 2015 | 2 min. read

    Taking Charge: The Proposed PT Payment Remodel

    Value-based. Quality-driven. Pay-for-performance . These are some of the buzzwords you’ve probably heard being bandied about in the healthcare payment world. And all that buzz is only going to get louder with time, because no matter how you choose to describe it, the movement toward better care at a lower cost is picking up major steam. As we already covered in a previous blog post , that movement has manifested in the formation of several different alternative …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.