By Win Whitcomb, MD, chief medical officer, Remedy Partners.
The Bundled Payments for Care Improvement (BPCI) Advanced initiative is a new advanced alternative payment model (APM) that will go live October 1, 2018. The successor to the 2013 BPCI program, BPCI Advanced is CMS’ most significant episodic payment reform proposal to date, indicating the government’s commitment to transitioning to paying for healthcare value rather than volume.
BPCI Advanced, a bundled payment model for Medicare fee-for-service beneficiaries, is a voluntary program in which acute-care hospitals and physician group practices may participate as “episode initiators.” As such, they will assume clinical and financial risk for patients during the episode. BPCI Advanced encompasses 32 bundles, or episodes, that include an inpatient hospitalization and the following 90-day period (save for three outpatient procedure bundles that include the procedure and 90-day follow-on period).
Applicants can choose one or more of the 32 bundles and then commit to participate with these bundles for the first five quarters of the program, at which time they can change their selected bundles. The bundled payment is carried out retrospectively where Part A and Part B claims are summed; if total payments are less than an episode initiator-specific target price, initiators keep the difference; if total payments exceed the target price, initiators must pay back overages. Performance on seven claims-based quality metrics impacts incentive payments. Episode initiators may go it alone or participate with a “convener,” which may provide services such as care-management technology, analytics and reporting, care-redesign expertise, access to post-acute provider networks, and financial risk sharing.
CMS recently distributed to applicants historical claims and target pricing data that contains Medicare Part A and B claims for each applicant, at the individual hospital-level, mapping to the 32 bundles and a target price for each bundle. Applicants can see total spending represented by all bundles and the total number of episodes. They can also see, in aggregate and for each bundle, major areas of spending during an episode, such as anchor hospitalization, readmissions, skilled nursing facilities, inpatient rehabilitation facilities, and spending tied to home health agency services, physician services, durable medical equipment, etc.
How to Succeed
Applicants should evaluate areas of high spending, high variation or both. Since BPCI Advanced is a pay-for-improvement program, applicants should select and prioritize bundles in which there is opportunity for improved performance over the baseline period (2014-2016).
Practices that improve care coordination will do well with BPCI Advanced. But keep in mind that BPCI Advanced episodes last for 90 days following anchor hospital discharge, so any readmissions occurring during this window will affect success. The best way to address this issue is to provide longer term follow-up with patients’ key physicians and other providers. One example of this is selecting the optimal discharge destination (e.g., to home without services, home with services, or post-acute facility) based on each patient’s profile. This can help improve the use of post-acute services, which account for substantial spending during an episode.