Episode Groupers: Key Considerations for Implementing Clinical Episode Models

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About this resource

Episode groupers are key to successful bundled payment implementation, but the vast array of permutations in how they can be applied has made it difficult for the industry to assess available options and develop guidance. Limited evaluations have concluded that endorsement of episode groupers is challenging because the software is highly customizable and technology is changing rapidly, and any further evaluation of episode groupers should be based on criteria that evaluate intended use, transparency, and reliability/validity.

This paper delves further into the evaluation criteria described above. It examines episode groupers and clinical episode payments within context of the following four categories and key insights:

(1) Defining the Focus and Duration of the Episode

  • Clinical data limitations are a factor in decisions about the focus and duration of episodes.
  • Rules on how an episode is triggered vary, but strength of a chosen trigger can be measured by factors such as the number of false positives and false negatives.

(2) Differentiation Across Patient Groups

  • There are challenges in how episodes are grouped together; they can be split into smaller groups or lumped together in larger bundles.
  • Lumping can result in wide clinical variation and inaccurate payments, while splitting can result in narrowly defined episodes that occur infrequently and for which estimating appropriate payments prove difficult.

(3) Differentiation Between Subgroups Within Similar Diagnosis Groups

  • Accounting for variations in risk and severity of clinical conditions is important because it allows providers to be measured on outcomes or processes they can influence, rather than underlying differences in patient severity.
  • Strategies for addressing risk within patient subgroups may include historical cost assessment, risk stratification, and use of post-grouping supplemental risk modification.

(4) Attributing Services and Costs to the Episode

  • Fairly and appropriately attributing services and costs to an episode can be challenging. Grouper rules for cost attribution are often complex due to multiple diagnosis and procedure codes that may fall within a single patient episode.
  • Grouping claims into episodes requires making decisions about whether to assign each line of a claim separately or assign claims in their entirety. Similarly, grouper logic should decide whether multiple codes within a line should be grouped together or split apart.

Download the episode grouper whitepaper

Related resources:

Clinical Episode Contracting for Commercial Payers