One change could lead skittish hospitals to drop out of the program if they don’t see fast ROI from participating, an adviser warned.


July 16—Some key timing parameters of the next large Medicare alternative payment model were changed in recent weeks.

The Centers for Medicare & Medicaid Services (CMS) will allow providers in the voluntary Bundled Payments for Care Improvement Advanced (BPCI-A) model to retroactively withdraw all or some episode initiators and clinical episodes from the model in March 2019. Additionally, CMS extended the deadline for submitting signed participation agreements and selecting clinical episodes for BPCI-A by one week, to Aug. 8, and extended the due date for program deliverables to Sept. 14.

“CMS is trying to be flexible, given the tight timeline to go live with the program, given the complexity, and also given that there was an error with some of the target prices they sent out, so [participants] had to resubmit data,” said Clay Richards, president and CEO of naviHealth, a care transitions company.

BPCI-A involves retrospective reconciliation of payments based on a comparison of all Medicare fee-for-service (FFS) spending for a clinical episode, for which the hospital commits to beat a target price. Those that beat the target garner bonus pay and those that miss it face payment cuts.

The American Hospital Association (AHA) noted in a June 21 letter to CMS that hospitals had been promised a “complete suite of data from CMS (including episode target prices, and summary and raw claims data)” by the end of May, but many applicants had yet to receive it.

“For hospitals, particularly large hospitals and health systems that operate several facilities and/or in multiple markets, this truncated timeline makes it nearly impossible to make an informed decision about participation in BPCI Advanced, and may lead them to forgo participation altogether,” AHA wrote.

Participation in the model still is scheduled to start Oct. 1, but the change allows participants to retrospectively drop episodes in the first quarter of 2019. The option to drop episodes was announced as CMS began uploading new preliminary target prices and claims data for some applicants due to inaccurate allowed amounts for some inpatient claims.

“It’s a great thing; it will assuage some of the concerns that our customers had about the tight timeline and allow folks to jump into the program—and if there are some episodes that they think, given target pricing and performance, they were uncomfortable with, they have the ability to drop those,” Richards said in an interview.

The chance to drop episodes was expected to give providers that have been “on the fence” about their participation in some episodes the confidence to proceed, he said.

The additional week to submit signed participation agreements also was needed because CMS sent the agreements to providers later than anticipated, Richards said.

CMS did not implement other changes sought by provider advocates, such as the request by Premier for another opportunity to enter the model prior to 2020.

“Applicants should have the option to apply and enter the program for the second performance period in 2019,” Premier wrote.

However, the latest program timeline confirmed that that second cohort still starts Jan. 1, 2020.

Jump the Gun?

One concern about the new opportunity for hospitals to end their participation six months into the program is that it may lead to some hasty decisions before providers have had a chance to see any ROI under the program.

“Because of the lag in the data, you won’t know a ton by March,” Richards said. “It’s still very early, so we would encourage our partners to not make any knee-jerk reactions and really look at the impact we’re making from a clinical redesign and utilization perspective.”

Richards said naviHealth is in discussions with several large health systems to serve as a BCPCI-A convener, a role the company also serves in the predecessor BPCI program, which wraps up in September. Their hospital clients are in the process of selecting from among 29 inpatient clinical episodes and three outpatient clinical episodes.

Investments Needed

A key consideration that Richards is highlighting for hospitals and health systems looking to participate in BPCI-A is the need to implement a range of new spending to succeed.

“We do have to make investments in change management, clinical redesign, clinical analytics, and reporting,” Richards said. “This is not an easy program, and the dollars at risk are significant.”

Richards said the cohort of hospital and health systems looking to enroll in BPCI-A has expanded beyond those currently enrolled in BPCI and even those with any value-based payment experience.

“The response from the market has been very encouraging.” Richards said.

Meanwhile, June research in Health Affairs analyzed data from Medicare and the AHA Annual Survey and found BPCI hospitals had higher mean patient volume and were larger and more teaching-intensive than those in the mandatory Comprehensive Care for Joint Replacement model (CJR).

However, the two groups had similar risk exposure and baseline-episode quality and cost. BPCI hospitals also had higher costs attributable to institutional post-acute care, largely driven by inpatient rehabilitation facility costs.

“These findings suggest that while both voluntary and mandatory approaches can play a role in engaging hospitals in bundled payment, mandatory programs can produce more robust, generalizable evidence,” the authors wrote. “Either mandatory or additional targeted voluntary programs may be required to engage more hospitals in bundled payment programs.”


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

Publication Date: Tuesday, July 17, 2018