LAN’s Report Breaks New Ground on Clinical Episode Payment (CEP)

Submitted by hci3-usr on Friday, August 5, 2016 - 01:32

Newtown, CT – August 5, 2016

With the release of their final paper on clinical episode payment, the Health Care Payment Learning & Action Network has broken new groundThe report, which outlines the framework for paying providers for certain clinical episodes of care, is the most comprehensive document produced to date by a consensus-based effort on how to tackle an Alternative Payment Model which, by any measure, is gaining increasing adoption across the country. Where it breaks new ground is by going beyond the basic run-of-the-mill procedural episodes which many seem so fond of but that represent only a fraction of the total costs of care. Two other episodes of care are described in the report that merit a closer look. The first is a comprehensive maternity bundle that includes pregnancy, delivery, newborn and post-partum costs. Modeled after efforts in Texas and New York, this clinical episode payment binds the outcomes and costs of mother and child in a single, risk-adjusted, global fee for the entire event. And we can’t underscore the importance of moving payment to this model, especially for Medicaid. That’s because as this analysis shows, the costs of the pregnancy and delivery are closely tied to the birth weight of the baby, and the same holds true for newborn costs. The analysis also shows that for the majority of the babies born, irrespective of birth weight, there’s not much of a correlation with the mode of delivery or with routine perinatal process measures. As such, there’s not much doubt left that we must bind what are now treated as two separate episodes – the pregnancy/delivery and the newborn – into a single one in which bringing babies to term, at a healthy weight, and using c-sections as seldom as possible is the goal. The model proposed by the HCP LAN does just that.

What this means to you – Payment reform is a complex endeavor that requires nuanced approaches that fit the heterogeneity of populations and their needs. Sometimes all you need is paying a basic fee for an office visit to help treat the symptoms of minor illness or injury. But sometimes it requires a lot more focused attention, such as the gestation and birth of a baby. The same is true for the management of one or more chronic conditions and here again the LAN’s report breaks new ground by introducing a novel way in which to pay for the management of those conditions. While many payers have deluded themselves to thinking that having some PCP-focused payment will take care of the complexity of managing patients who may have unstable cardiac disease, the reality is quite different. We all know specialists manage these patients and those specialists have many treatment options, some conservative, some more aggressive. The framework in the report outlines a real solution to a real problem and we know that many specialty societies around the country are paying attention. As well they should because to-date the government has frozen them out of MACRA-qualifying Alternative Payment Models unless they’ve already tied their future to that of an ACO. And coincidentally, CMS’s latest proposed rule on a fresh batch of mandatory bundled payments asks for comments on condition-focused bundles. It seems to us that the LAN report offers all of the guidance the government could want, and since they fund the LAN perhaps they’ll even pay attention. Now that would be an incredible step forward for all of us.


Francois Sig


Francois de Brantes
Executive Director