How to avoid Fraud or Abuse in Commercial Bundled Payments

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Introduction
The Bundled payment is defined as the reimbursement of health care providers on the basis of expected costs for clinically defined episodes of care. It has been considered as a middle ground between fee for service reimbursement and capitation system. Bundled payment has been proposed in health care reforms in the United States as a strategy for reducing health care costs, especially during the Obama administration (Mechanic & Altman 2009). While federal and state health care laws make bundled payments difficult to structure and implement, both the Medicare program and commercial payers have embraced bundled payments as a means for reducing costs, and many providers view bundled payments as an effective market strategy and a gateway to population management and more complex value-based payment arrangements (Moeller & Evans 2010).
If one tries to design and implement a bundled payment system with commercial payers, he or she would immediately find that there exist complex legal issues of Fraud and Abuse to consider. This is mainly because the applicable laws were not designed to such types of systems. Although it may require a significant amount of time and effort to set up a compliant bundled payment system, I believe that it is possible to create such systems, and eventually, to overcome legal challenges for Fraud and Abuse. This paper hypothesizes that in designing commercial bundled payment system, increased utilization of applicable exceptions of related laws can reduce the potential legal risk of Fraud and Abuse.
Fraud and Abuse consideration
Confusion over the legal and regulatory requirements surrounding the creation of a bundled payment and shared savings arrangement is one of the primary roadblocks to wides...

... middle of paper ...

...ovisions as possible.
Conclusions
All things considered, it is clear that commercial bundled payment arrangements are not immune to laws related to Fraud and Abuse issues. Civil Money Penalty, Stark Law, and Anti-Kickback Statutes are identified as the most important federal laws to consider. While all of them impose a critical penalty to health providers if violated, each law has several exceptions that are applicable and favorable in commercial bundled payment context. Therefore, like I hypothesized in the beginning, active utilization of such exceptions will minimize legal and compliance risk so that health providers can avoid the issue of Fraud and Abuse. I highly recommend everyone who designs a commercial bundled payment program to keep in mind the laws and regulations discussed above as they present challenges in creating and implementing a compliant program.

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