Early data indicate the CJR program’s participants likewise are not experiencing volume spikes, says a consultant.


Feb. 8—New research sought to address the ongoing concern that bundled payment models will inadvertently drive volume increases and higher costs.

Researchers at the Altarum Institute and the Centers for Medicare & Medicaid Services compared major lower joint replacement rates among participants in Medicare’s Bundled Payment for Care Improvement (BPCI) program with rates of all other Medicare hospitals from 2011 through 2015.

Among BPCI hospitals that began participating in either October 2013 or January 2014, yearly lower joint replacement volumes increased by 2.5 percent, compared with 9.7 percent among other hospitals. When BPCI participants added through 2015 were included, volumes increased by 7.3 percent, compared to 9.6 percent among non-participants.

François de Brantes, vice president and director of Altarum’s Center for Payment Innovation and one of the paper’s authors, said the research shows “there is no evidence of volume increase and that widespread bundled payment programs shouldn’t result in increases in volume of procedures (although factors such as an aging population and people living longer may). There is no evidence whatsoever that the financial incentives artificially stimulate increased volume.”

The research followed a September 2016 JAMA editorial by Elliott Fisher, MD, director of the Dartmouth Institute for Health Policy and Clinical Practice, who warned that volume increases seen in BPCI research that was presented in the same issue indicated that total spending may increase as the program becomes more widespread.

“This has always been one of the major concerns about bundled payment,” said David Grabowski, PhD, a professor of healthcare policy at Harvard Medical School. “If we pay for bundles, we will get more bundles.”

In an email, Fisher highlighted the new study’s finding that there was a greater per-hospital volume increase among participants (4.8 percent per year) than among non-participants (1.7 percent per year).

“They find that this difference is not statistically significant,” Fisher said. “But the numbers show that volumes went up. This is exactly the same finding observed in the JAMA study that I discussed in my editorial.”

The authors of the new research said Fisher’s conclusion did not account for the possibility that the volume of the procedures at BPCI hospitals reflected variance in the numbers of local Medicare beneficiaries or regional prevalence rates for joint procedures. They noted facilities that experienced significant volume increases were affected by regional market forces, such as hospital consolidation that included a merging of surgery units.

The new research appeared to effectively account for the increased BPCI volume found in the JAMA study and established that “the increase was independent of participation in BPCI,” said Andrei Gonzales, MD, associate vice president of value-based payments for McKesson Health Solutions.

CJR Impact

A key question about the new findings was whether they would carry over to participants in Medicare’s Comprehensive Care for Joint Replacement (CJR) model, which started in April at about 800 hospitals. That much larger program also focuses on lower joint replacement but differs from BPCI in many ways, including by mandating participation for most hospitals in certain geographic regions.

“I think the findings are applicable because it’s reasonable to think that dynamics would be similar for organizations in mandatory programs to what they are in voluntary programs once the organizations study the model and adjust their clinical and business practices to improve performance,” Gonzales said.

That assessment mirrors what some hospital advisers have seen among CJR participants.

“We just have not seen an increase in volume related to BPCI or CJR,” Deirdre Baggot, PhD, principal at ECG, said in an interview.

Her company has advised about 120 organizations in BPCI since 2012 and consults for about 40 in CJR. Among those CJR hospitals, the share of patients discharged directly home increased from  61 percent in 2014 pre-CJR to 74 percent in Q2 of 2016; skilled nursing facility length of stay declined from 21 days in baseline period to 14.2 days in Q2 2016; and their total spend declined by 11 percent from CY14 to Q2 2016.

It is too soon for CJR data to reflect any volume increases, said Kelly Price, vice president and chief of healthcare data analytics at DataGen, a subsidiary of the Healthcare Association of New York State.

“Increasing volumes can make sense for an individual hospital or physician or physician group because the more surgeries you do, the better your quality should be, and because higher volumes protect from extreme outliers affecting your average [cost],” Price said.

However, Price said she would be surprised by an increase in overall volumes in CJR because that would involve siphoning volume from other local providers, which would not affect the region’s overall volume, or expanding surgery to higher-risk patients. 

“These are patients that you might have discouraged in the past or at least delayed while you optimize them for surgery by bringing down their BMI, getting their blood pressure under control, etc.,” Price said. “Operating on higher-risk patients is more likely to produce a loss because they will be more expensive and exceed target.”

Other Concerns

Even if concerns about volume increases are unfounded, de Brantes said, CJR participants may have a harder time replicating some benefits found in BPCI, such as significant savings for participating hospitals and reduced Medicare spending.

“For those who aren’t ready, it will take a little longer for them to improve their performance,” de Brantes said. “But this is the advantage of having programs that are applicable to all providers in a specific region. The motivation for improvements ends up being greater as no one wants to be left behind.”

Grabowski’s primary concern about BPCI was the non-randomized nature of its participants and the episodes they chose.

“That is, higher-performing providers likely enrolled and then chose those episodes that had a high likelihood of success,” Grabowski said. “Thus, I really struggle with determining how much of the improvement we are seeing with bundles is due to true performance improvement and how much is due to selection. If it is selection, these results will not generalize to other providers.”

The mandatory bundles under CJR should answer that question, he said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare 

Publication Date: Wednesday, February 08, 2017