McKesson and HCI3 Form Partnership to Support Large-Scale Bundled Payment Programs

NEWTON, Mass.--(BUSINESS WIRE)--McKesson and the Health Care Incentives Improvement Institute (HCI3) have entered into an agreement that will support healthcare organizations’ growing interest in bundling payments for episodes of care, a promising alternative to fee-for-service (FFS) reimbursement for healthcare services. Bundled payments seek to move payers and providers to a value-based system in which reimbursement supports evidence-based best practices with quality outcomes rather than volume-based delivery, which in turn lowers overall costs by avoiding preventable complications. The agreement will combine McKesson Episode Management™, software that automates complex bundled payment programs of all sizes, with the PROMETHEUS Payment^® model, a leading set of episode definitions and reimbursement logic.

“For this methodology to take hold, standardization around generally accepted best practices is critical”

According to Francois de Brantes, executive director, HCI3, momentum is building around this healthcare reform initiative: “Bundled payment activity is clearly expanding with government commitment through the Affordable Care Act. Spurring adoption are the pilots’ positive impacts on lowering costs while improving quality, technology solutions such as McKesson Episode Management that reduce program complexity, and greater standardization of episode logic and definitions through organizations such as HCI3.”

“For this methodology to take hold, standardization around generally accepted best practices is critical,” said Amy Larsson, associate vice president of emerging solutions at McKesson Health Solutions. “HCI3 is a recognized leader in defining the services bundled together into an episode of care across acute and chronic conditions, including inpatient and outpatient procedures. We see our partnership as an ideal blend of the clinical and technology expertise required to fuel program success, particularly of large-scale advanced reimbursement initiatives.”

Launched in 2006 with the support of the Robert Wood Johnson Foundation, the PROMETHEUS Payment model packages payment around a comprehensive episode of medical care that covers all patient services related to a single illness or condition. Covered services are determined by commonly accepted clinical guidelines or expert opinion that lay out the tested, medically accepted method for best treating the condition from beginning to end. A patient-specific budget is set for the care episode that includes all the covered services for all the providers who would treat the patient, taking into account the severity and complexity of his or her condition. The goal is to create an incentive for collaborative care that improves both clinical and financial outcomes.

This model will be employed by McKesson Episode Management, a highly configurable, rules-based software application that enables scalable episode programs with retrospective and prospective bundled payments. The solution leverages McKesson’s industry-leading solutions for optimizing clinical decision support and automating even the most complex payment decisions, enabling plans to implement a wide variety of advanced reimbursement strategies. McKesson Episode Management automates a health plan’s choice of episode definitions, then helps bundle and pay episode claims accurately, in real time and within current claim workflows.

In addition, McKesson will be participating in HCI3’s rigorous certification process for technology companies employing the PROMETHEUS Payment model.

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About the Health Care Incentives Improvement Institute™, Inc.

The Health Care Incentives Improvement Institute, Inc. (HCI3^®) is a non-profit multi-stakeholder umbrella organization for Bridges to Excellence^® and PROMETHEUS Payment^®. The mission of the organization is to create significant improvements in the quality and affordability of health care by developing and implementing programs that recognize and reward physicians, hospitals and other health care providers that deliver safe, timely, effective, efficient, equitable and patient-centered care. HCI3 offers a comprehensive package of solutions to employers, health plans and coalitions to improve the flawed incentives that currently permeate the U.S. health care system. For more information, visit www.HCI3.org.

About McKesson Corporation

McKesson Corporation, currently ranked 14th on the FORTUNE 500, is a healthcare services and information technology company dedicated to making the business of healthcare run better. We partner with payers, hospitals, physician offices, pharmacies, pharmaceutical companies and others across the spectrum of care to build healthier organizations that deliver better care to patients in every setting. McKesson helps its customers improve their financial, operational, and clinical performance with solutions that include pharmaceutical and medical-surgical supply management, healthcare information technology, and business and clinical services. For more information, visit us at www.mckesson.com.

Tags: bundled payment, episodes of care, PROMETHEUS Payment, healthcare reform, value-based reimbursement, McKesson Episode Management, payment reform, advanced reimbursement