CMS Announces New Voluntary Bundled Payment Model

(Photo courtesy of former HHS Secretary Tom Price's Flickr page. Photo has been cropped for size.)

In December, CMS issued a final rule to cancel the Obama-era mandatory bundled payment programs for joint and cardiac interventions that were set to begin on January 1^st. This week, the agency announced a new plan to encourage bundled payments, though participation is voluntary.

Under the new program, Bundled Payments for Care Improvement Advanced (BPCI Advanced), health systems can receive additional reimbursement for administering a quality episode of care within a set spending target.

BPCI Advanced will apply to 32 different clinical episodes, including some of those that would have been covered by the now-cancelled mandatory rules, like lower extremity joint replacement and certain cardiac interventions. The original BPCI initiative, launched in 2013, included only inpatient interventions, while the newly-established program will also cover a handful of outpatient episodes

The program will qualify as an Advanced Payment Model under the Medicare Access and Chip Reauthorization Act (MACRA)’s Quality Payment Program. The performance period will begin on October 1^st, 2018, and end on the last day of 2023.

CMS Administrator Seema Verma said the organization was “proud to announce this Administration’s first Advanced APM,” and described the program as “is an important step in the move away from fee-for-service and towards paying for value.”

The first BPCI initiative was also voluntary. A study published in JAMA this week notes that only 12% of eligible hospitals joined, almost all of which were in urban locations. Those that did join had high attrition rates: By the start of 2017, more than half of the hospitals abandoned the program for at least 1 of its covered conditions, while a fifth stopped participating altogether.

A previous JAMA study, published in 2016, showed that the model did provide savings. “The mean Medicare episode payments declined by an estimated $1166 more for BPCI episodes than for comparison episodes, primarily due to reduced use of institutional postacute care,” the authors wrote, finding no statistical differences in quality measures like unplanned readmissions and emergency department visits.

According to CMS’s official statement, the new BPCI Advanced program “seeks to support and encourage” health systems that are interested in “continuously redesigning and improving care,” and “decreasing costs by eliminating care that is unnecessary or provides little benefit to patients.”

Enrollment in the program ends at 11:59PM EST on March 12^th, 2018, and must be submitted through the official application portal. The CMS’s Center for Medicare and Medicaid Innovation, which designed the initiative, will hold an open Q & A about the program on January 30^th.