Bundled Arrangements: What Every Employer Should Know

by Sally Pace


When it comes to driving health plan value, David Hines, Executive Director, Employee Benefits for Metro Nashville Public Schools, has a few levers he pulls to ensure he’s protecting both the plan participants and the budget entrusted to him by MNPS. After all, he’s managing the plan for the country’s 41st largest district comprised of 88,000 students, with 9,200 active and retired teachers on the plan.


So, what is the secret to containing costs? Certainly, Hines has honed in on specific solutions based upon the data outlining high-cost claimants. These currently include seeking plan solutions for maternity and obesity. But the overarching roadmap any employer can follow focuses on two aspects – bundling and vetting your TPA partner.


Let’s start with bundling. This is a payment structure in which health care providers “who are treating you for the same or related conditions are paid an overall sum for taking care of your condition rather than being paid for each individual treatment, test, or procedure,” as defined by CMS.


What is expected for Metro Nashville Schools in bundling:

First and foremost, a concierge approach with a simplified process that cuts through the maze of healthcare treatment. An agreement that is patient-centric, not provider-centric focusing more on patient needs in regards to scheduling, timing, and infringement on their life than on provider preference is also expected.


Taking that a step further, Hines and his team seek cessation of the barrage of multiple bills which often occur providers a plan member cannot recall ever seeing. “ In-fact, no bills should be generated and cost will be one simple bill paid 100% by the plan,” shares Hines.


This leads to improved quality in treatment - not just in process improvements, but in care. According to Hines, “the bundle cannot simply start at admission and end at discharge -it has to start at a reasonable point of the disease progression and when possible, work toward minimizing the risk of more aggressive medical interventions. It must continue until reasonable post-operative care ceases bringing the patient to the point that separation from the bundle will not harm them physically, emotionally, or financially.”


The bundle should include quantifiable metrics in both quality and patient satisfaction. When these occur, there is an expected improvement in cost of care.  The restructuring and quality improvements should generate enough financial gains that we can afford to remove the employee cost-share. 


Now, about the TPA.

Once you’ve settled on bundled solutions, it’s important to find a third party administrator who shares your vision of cost containment. To that end, Hines shares his “secret sauce” for vetting partner TPAs. He’s got language that any competing TPA must agree to in the RFP process. That confirmation of support for direct contracting initiatives is as follows:

We confirm that we have the capabilities and will support MNPS direct contracting initiatives. We understand that it currently involves a customized network, providing 100% benefits for {insert name here} providers contracted with MNPS for onsite medical care and {insert name here} contractors providing chiropractic and acupuncture. The scope of services provided at the onsite facilities may exceed the services provided elsewhere.


We can also support the current contract relationship with {insert name here} as the onsite and preferred pharmacy and can administer MNPS’ contracted reimbursement rates as part of the overall pharmacy benefit management. In addition, we can provide the lower copayment structure at {insert name here} locations along with their designation as the only retail pharmacy where 90-days at retail fills are permitted.


We recognize that MNPS has identified certain drugs/categories for $0 copayments. We can support your value-based design.


We will support and administer other direct-to-provider contracting relationships, acknowledging and supporting MNPS’ efforts to engage the provider community with value-driven programs that delivers episode-based acute care services directly to employers. We realize this will necessitate new reimbursement mechanisms and coverage levels on episodic levels. MNPS is currently reviewing maternity, total joint and spine.


While this language is built around the identified needs of the members on the MNPS plan, it can give a road map to any employer seeking to move toward transparency and cost containment by focusing on the partners with whom you engage. Feel free to copy and paste into your next RFP. David Hines is that kind of stand up guy, so he's willing to share.


Speaking of partners, find your next, best benefits solution by searching for them on
The Granite List.


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