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*Updated June 2019
The Centers for Medicare and Medicaid Services (CMS) first announced participants for the Bundled Payments for Care Improvement (BPCI) program back in January 2013. This program was designed as a way to move hospitals toward value-based care by incentivizing providers to advance coordination and efficiency of care while also improving quality and outcomes at lower costs.
In January 2018, CMS announced the implementation of Bundled Payments for Care Improvement Advanced, running from October 2018 through December 2023 and testing bundled payments for 32 clinical episodes. Like many CMS programs, BPCI is intended to improve care coordination and clinical outcomes while reducing care costs and unnecessary treatments. However, as of March 1, 2019, the reassessment period for organization to decide whether not to participate in the bundled payment model, more than 250 providers (16 percent) dropped out of the advanced program because they found they weren't meeting financial targets. Ultimately, the BPCI Advanced model is voluntary and, even with a 16 percent dropout rate, there is still robust participation with nearly 1,300 providers left in the program.
At its inception, Bundled Payments for Care Improvement was made up of four distinct care models that coordinate payments and penalties for distinct episodes of care. Participating hospitals and other care facilities are under an agreement to increase physician accountability for financial decisions as well as improve clinical performance during an episode of care. CMS research concluded that bundled payments s reduce care fragmentation by incentivizing effective communication between providers and care facilities, ameliorating care quality and outcomes. Hospitals participating in BPCI were more likely to be larger, non-profit facilities in urban areas. Participants were also located in larger and more competitive markets, often with fewer skilled nursing facilities, than markets with no participating hospitals.
BPCI Model 2 is the most popular among hospitals tracked by Definitive Healthcare, with over 400 participating facilities. Model 2 officially began in October 2013, when hospitals began bearing financial risk through the program. Retroactive bundled payments or penalties were assigned to participants to reconcile actual spending with CMS targets. An evaluation of the BPCI program, co-sponsored by CMS and the Lewin Group, reported the keys to success for Model 2 participants as well as common stumbling blocks faced in the attempt to reduce costs and improve communication between providers at disparate facilities.
In the first two years of the BPCI program, from 2013 to 2015, 14 percent of hospitals and physician groups stopped participating in at least one clinical episode out of the 48 being tracked. Six percent of hospitals withdrew completely in this period.
|Hospital Name||Net Patient Revenue (B)||Discharges|
|Vanderbilt University Hospital||$3,443||57,902|
|Yale New Haven Hospital||$2,750||65,019|
|Baystate Medical Center||$2,545||37,985|
|Mount Sinai Medical Center||$2,468||56,276|
|Hospital of the University of Pennsylvania||$2,448||37,929|
|UC San Diego Medical Center||$1,843||30,647|
|Northwestern Memorial Hospital||$1,746||45,506|
|University of Utah Medical Center||$1,730||31,550|
Fig 1 Data from Definitive Healthcare's Hospitals & IDNs platform, June 2019, based on CMS reporting guidelines
Though bundled payments have been linked to improved care quality at lower costs, some industry experts have reservations. The American Academy of Orthopaedic Surgeons (AAOS) voiced several concerns in January 2018. Leaders at the AAOS questioned whether physicians would be likely to participate in BPCI due to the popularity and precedence of the Comprehensive Care for Joint Replacement (CJR) program. In terms of care costs, lower-extremity joint replacements at CJR hospitals did not see lower expenditures. Rather, it was independent physician groups participating in CJR that reduced lower-extremity joint replacement costs by $12.6 million in comparison.
And, as of June 2019, CJR hospitals saw significant changes in discharges to skilled nursing facilities, from 45 percent of patients to 26 percent. For skilled nursing facilities, these bundled payment models may be an area of concern. The bundled payment models tend to bypass skilled nursing facilities entirely, as rehabilitation for procedures like joint replacements increasingly move into the less-costly outpatient care settings. Because BPCI provides a single reimbursement for an entire episode of care — for instance, a hip or knee replacement — hospitals now have a significant incentive to encourage patients to go directly from the hospital to the home health setting for recovery.
Interested in supporting providers that are part of alternative payment programs? Want to understand which hospitals and physician groups are currently participating in these BPCI programs? Whether it's Model 2, 3, 4, Advanced, or CJR bundled payment, Definitive Healthcare can enable you search for and fully understand CMS Programs, as well as all types of payment programs across the entire continuum of care.
Fig 2 Data from Definitive Healthcare's Hospitals & IDNs platform, CMS Programs tab
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