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CMS Announces New Voluntary Bundled Payment Program: BPCI Advanced

January 17, 2018

The Centers for Medicare & Medicaid Services (CMS) recently released an update to the Bundled Payments for Care Improvement (BPCI) initiative – the BPCI Advanced model. This new model offers providers the opportunity to earn incentive payments as they decrease healthcare expenditures while maintaining clinical quality. This overview breaks down BPCI Advanced so providers can decide whether to participate in this voluntary program.

Program Details

Bundling models combine the costs of hospital, physician, and most other healthcare services into discrete “bundles” with spending targets set by CMS. Program participants must then deliver care that is below the target to earn incentive payments. However, they must also accept downside risk; if actual expenditures are above the spending target, then CMS must be repaid the overage.

The BPCI Advanced program, which begins Oct. 1, 2018, operates similarly to other bundled payment initiatives offered by CMS, and it includes the following characteristics:

  • There are 32 different clinical episodes that may be selected, and more than one clinical episode may be used.
  • Most clinical episodes are based on acute care trigger events such as joint replacement or heart bypass surgery.
  • Quality targets must be achieved for incentive payments.
  • The clinical episodes last 90 days post-discharge or post-procedure.
  • The bundled spending target for the clinical episode includes expenditures for nearly all services: hospital inpatient and outpatient, readmissions, physician, post-acute care (long-term acute care, inpatient rehabilitation facility, skilled nursing facility, and home health agency), lab, durable medical equipment (DME), and Medicare Part B drugs.
  • Some costs are excluded from the bundle based on diagnosis (e.g. payment for clotting factors for hemophilia patients) and readmissions unrelated to clinical episode (i.e. trauma).

However, the BPCI Advanced program differs from prior bundling initiatives in these ways:

  • The program is voluntary.
  • Physician Group Practices (PGPs) may be the lead participant and may be responsible for apportioning financial risk among other participants.
  • There are now three clinical episodes triggered by outpatient procedures: percutaneous coronary intervention, cardiac defibrillator, and back and neck surgery (except spinal fusion).
  • The program qualifies as an Advanced Alternative Payment Model for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Providers will not have to report Merit-based Incentive Payment System (MIPS) for these patients.

Evaluating Participation

Physician group providers have a slight advantage over acute-care hospitals in how patients are attributed to participants; this could be significant in markets where both a physician group and a hospital wish to participate. For risk-tolerant, independent physician groups, the BPCI Advanced model introduces a significant opportunity.

However, risk should never be taken lightly; providers should thoroughly evaluate the various aspects of this new model to determine if the benefit from participating in this program would outweigh the potential risk. Applications for participation must be received by CMS by March 12, 2018.

If you need help evaluating participation or simply want to understand more about the model and its potential benefit, our knowledgeable team of healthcare consultants can help.

David Blish Director, Healthcare Consulting

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