On October 9, 2018, the Centers for Medicare & Medicaid Services (CMS) announced that close to 1,300 entities (conveners or single hospitals or physician group practices) have signed agreements to participate in the Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model on a voluntary basis. The announcement can be found here: https://www.cms.gov/newsroom/press-releases/cms-announces-participants-new-value-based-bundled-payment-model. This program is the next round of episodic payment and replaces BPCI “Classic”, which ended September 30, 2018.

The basic facts:

  • Only acute care hospitals (ACHs) and physician group practices (PGPs) are eligible to initiate episodes under BPCI Advanced. The Model participants include 832 ACHs and 715 PGPs—a total of 1,547 Medicare providers and suppliers, located in 49 states plus Washington, D.C., and Puerto Rico. Some participants are solo ACHs or PGPs, while many band together under the umbrella of a convener.
  • Under BPCI Advanced, participants can earn an additional payment if all expenditures for a beneficiary’s episode of care are less than a spending target, which factors in measures of quality. Conversely, if the expenditures exceed the target price, the participant must repay money to Medicare. This is a two-sided risk model.
  • BPCI Advanced qualifies as an Advanced Alternative Payment Model (Advanced APM) under the Medicare Access and CHIP Reauthorization Act (MACRA), so participating providers can be exempted from the reporting requirements associated with the Merit-Based Incentive Payment System (MIPS). Physicians who earn a significant portion of their revenues from Advanced APMs may qualify for a 5 percent bonus on their Part B revenues, in addition to whatever gains (or losses) are derived from their participation in the payment model itself.
  • The BPCI Advanced Model runs from October 1, 2018, through December 31, 2023. Although it is a voluntary model, participants can only withdraw from the Model at specified intervals. Of particular importance is that participants must make a firm decision on the first 15 months of participation (retroactive to October 1, 2018) by March 2019.
  • CMS has stated its intention to permit another round of BPCI Advanced applications in Spring 2019 for a January 1, 2020 start.

What this means:

All 1,547 hospitals and physician groups participating in this round of bundling will have a few short months to make a firm decision on whether to take full risk for a 15-month period and, if so, for which clinical episodes (defined as diagnostic clusters, which include up to 29 categories triggered by an inpatient stay, and three triggered by outpatient services).

Many clinical episodes, such as hip fractures, have a strong post-acute focus in the 90-day post-hospital discharge period. Our experience with episodic risk-based models is that post-acute care can often be the most highly variable component of a 90-day episode, but the good news is that under the right incentive structure, post-acute providers can successfully manage risk of a wide range of clinical categories, including medically complex care as well as orthopedic care.

Participating hospitals and physician group practices often form preferred provider relationships in order to successfully manage under the bundle. However, preferred networks will only take you so far. From our perspective, bundlers should also develop and implement risk-sharing with post-acute care in order to ensure consistent and superior performance. In so doing, bundlers will be able to opt in for more clinical categories than they might otherwise have done and, thus, scale their program.

What to do next:

Providers should:

  1. Understand which hospitals and physician group practices in their market have elected to move forward with BPCI Advanced and are now in the six-month final decision-making window for this round.
  2. Craft a value proposition that addresses your organization’s ability to manage care over an episode with efficient utilization, outstanding quality metrics, reduced readmissions, and effective monitoring for community-based discharges.
  3. Discussions should ensue about how to take the relationship between bundlers and post-acute care to the next level by developing a gainsharing relationship that aligns payment and quality. Even if potential bundlers did not move forward in this round, they may be considering the next round for 2020, so having these discussions now is worthwhile.

HDG can help bundlers and post-acute care form win-win relationships. For more information, visit our website or contact us at 763.537.5700 or info@hdgi1.com.

Authored by: Brian Ellsworth, Vice President for Public Policy and Payment Transformation