Are we ready for bundled payments for major bowel surgery?

ABSTRACT

BACKGROUND: The Centers for Medicare & Medicaid Services (CMS) recently announced a new voluntary episode payment model for major bowel surgery. The purpose of this study was to examine the financial impact of bundled payments for major bowel surgery. METHODS: An institutional database was retrospectively queried for all patients who underwent major bowel surgery between July 2016 and June 2018. Procedures were categorized using MS-DRG coding MS-DRG 329 (with MCC, major complications and comorbidity), MS-DRG 330 (with CC, complications and comorbidity), and MS-DRG 331 (without CC/MCC). RESULTS: A total of 745 patients underwent 798 procedures, with mean age 62.1 years and BMI 29.2 kg/m2. The median LOS was 4.0 days, with 12.5% of patients being discharged to a post-acute care facility for an average of 38.5 days. The mean hospital cost was $18,525. The mean payment to a post-acute care facility was $423 per day. The 90-day readmission rate was 8.6% at an average cost of $12,859 per readmission. Patients with major complications and comorbidity (MS-DRG 329) had higher CMS Hierarchical Condition Categories scores, longer LOS, higher costs, more required home health services or post-acute care facilities, and had higher 90-day readmissions. In a fee-for-service model, hospital reimbursements resulted in a negative margin of - 8.2% for MS-DRG 329, - 2.6% for MS-DRG 330, but a positive margin of 2.8% for MS-DRG 331. In a bundled payment model, the hospital would incur a loss of - 13.1%, - 11.1%, and - 1.9% for MS-DRG 329, 330, and 331, respectively. CONCLUSIONS: Patients undergoing major bowel surgery are often a heterogeneous population with varied pre-existing comorbid conditions who require a high level of complex care and utilize greater hospital resources. Further study is needed to identify areas of cost containment without compromising the overall quality of care.