The State of BPCI

by Clive Riddle, October 12, 2018

CMS announced that “1,299 entities have signed agreements with the agency to participate in the Administration’s Bundled Payments for Care Improvement – Advanced (BPCI Advanced) Model.  The participating entities will receive bundled payments for certain episodes of care as an alternative to fee-for-service payments that reward only the volume of care delivered. The Model participants include 832 Acute Care Hospitals and 715 Physician Group Practices – a total of 1,547 Medicare providers and suppliers, located in 49 states plus Washington, D.C. and Puerto Rico.”

CMS also reminds us that “BPCI Advanced qualifies as an Advanced Alternative Payment Model (Advanced APM) under MACRA, so participating providers can be exempted from the reporting requirements associated with the Merit-Based Incentive Payment System (MIPS).”

CMS further explains these three differences between the new BPCI Advanced Model and the original BPCI Initiative that ended September 30, 2018:

1. BPCI Advanced offers bundled payments for additional clinical episodes beyond those that were included in BPCI, including – for the first time – outpatient episodes.
2. BPCI Advanced provides participants with preliminary target prices before the start of each model year to allow for more effective planning. The target prices are the amount CMS will pay for episodes of care under the model.
3. BPCI Advanced qualifies as an Advanced APM.  Participating clinicians assume risk for patients’ healthcare costs and also meet other requirements including meeting quality thresholds, potentially qualifying them for incentive payments and exempting them from the MIPS program.

CMS has released results of its evaluation of the original BPCI Initiative, Models 2-4 for Years 1 -3 (through 12/31/2016.) CMS notes that “Model 2 episodes begin with a hospital admission and extend for up to 90 days; Model 3 episodes begin with the initiation of post acute care following a hospital admission and extend for up to 90 days; and Model 4 episodes begin with a hospital admission and continue for 30 days. The BPCI initiative rewards participants in Models 2 and 3 financially through reconciliation payments for reducing Medicare payments for an episode of care relative to a target price. Alternatively, when episode payments are higher than the target price, Awardees may have to pay amounts to CMS. Under Model 4, Medicare makes a prospective payment for the episode, so Awardees keep the difference if their costs are below the prospective payment.”

Of all participants, 22% of Model 2, 33% of Model 3, and 78% of Model 4 participants withdrew from the initiative.

CMS evaluation is based on the 169-page study just released by the Lewin Group: CMS Bundled Payments for Care Improvement Initiative Models 2­4: Year 5 Evaluation &  Monitoring Annual Report. Their findings included:

• While BPCI was associated with a decline in episode payments, after considering the reconciliation payments made to participants, BPCI did not result in savings to the Medicare program.
• Across the 67 Model- participant- and clinical episode-combinations analyzed in this report, payments declined for 50 and the change was statistically significant for 27.
• The average Model 2 episode initiator (EI) participated in eight clinical episodes, and the most commonly selected clinical episode was MJRLE. BPCI Model 2 accounted for nearly 90% of the approximately 796,000 episodes initiated during the first 13 quarters of the initiative.
• Episode volume was lower than in Model 2. Skilled nursing facility (SNF) EIs were most likely to participate in MJRLE, where they initiated over 9,600 episodes during the first 13 quarters of the initiative. Congestive heart failure (CHF) had the greatest enrollment of home health agency (HHA) EIs and the largest patient volume, exceeding 4,800 episodes during the same period.
• Participation in Model 4 continued to wane in the third year of the initiative. Only five hospitals participated in Model 4 in 2017 and another three Model 4 hospitals transitioned to Model 2 rather than withdraw entirely from the initiative. At the peak of enrollment, 23 episode-initiating hospitals participated in Model 4. A total of 13,551 episodes, primarily for MJRLE, were initiated under the Model through December 2016.