Medicare Payment and Reimbursement

Some Practices Leave Largest Bundle Program

May 6, 2019 7:12 pm

March 18—Physician practices were more likely than other providers to depart from Medicare’s largest bundled payment program by the March 1 deadline to drop out, according to industry advisers.

Medicare’s Bundled Payments for Care Improvement Advanced (BPCI Advanced) bundled payment model launched Oct. 1, 2018, and runs through the end of 2023. Providers that volunteered to participate face two-sided risk in managing all spending compared to a specified target for episodes of care within 32 clinical bundles, with quality measures factored in.

The 1,299 BPCI Advanced participants were given a one-time opportunity to drop out on March 1 for any reason. The Centers for Medicare & Medicaid Services (CMS) will not confirm how many participants left until “later in the spring,” according to a spokesman.

However, advisers and providers in BPCI Advanced said hospitals tended to remain in the program, while physician practices dropped out for a variety of reasons. The model included 832 acute care hospitals and 715 physician group practices, according to CMS.

For instance, an unspecified number of the 150 hospitals across 12 health systems that naviHealth manages in BPCI Advanced left the program, according to the company. naviHealth serves as one of several “conveners,” which share downside financial risk with provider organizations in BPCI Advanced in exchange for a share of any bonus payments.

“You may see some patterns in hospitals that didn’t have enough volume to merit the investment in care redesign,” Gina Bruno, vice president, clinical strategy at naviHealth, said in an interview. 

The company expects some departing hospitals to rejoin and for new providers to join BPCI Advanced as part of a new cohort of enrollees starting Jan. 1, 2020.

Issues for Physician Practices

In contrast, 20 percent to 30 percent of the 100 provider organizations managed by Archway Health dropped out of the program March 1, according to Dave Terry, CEO. Many of those dropouts were orthopedics practices—in addition to one hospital.

One of the 13 practices managed by New Century Health also dropped out, said Fernando Villacian, MD, medical director. That practice, an electrophysiology practice, was enrolled in all of the model’s cardiac bundles—as is every other BPCI Advanced practice managed by New Century Health.

Other providers previously expressed skepticism about remaining with the program but did not drop out.

“As a system, Northwestern Medicine remains a participant in the BPCI Advanced bundled payments program,” said Jessica Walradt, manager of value-based care at the 10-hospital system in the Chicago area.

However, one of the health system’s episode initiators, Northwestern Memorial Hospital, dropped the COPD episode because the target price was seen as too low.

“Based on internal data review, we believed that even if we employed all possible care interventions, we would still be unable to break even,” Walradt said in a statement to HFMA.

Reasons for Departures

The departing orthopedic practices—as well as still-participating practices within health systems—found success within the program’s parameters difficult to achieve, said Terry. Specifically, the pricing for orthopedic episodes of care made those bundles much tighter than those for cardiologists or specific chronic conditions, like chronic obstructive pulmonary disease (COPD).

“Even for many of the folks that stayed in, we are worried that there are going to be significant losses for when they reconcile in October if they weren’t looking frankly at their data,” Terry said in an interview.

Another complication was lower-than-expected volumes, which in some cases arose from the program’s Medicare patient attribution being prioritized behind attributions to Next Generation accountable care organizations.

Another challenge for providers was the need to get up to speed quickly, Terry said.

“We had a number of folks who we spoke to who felt like they learned in the last four or five months of doing this and were dropping out, but they were going to significantly evaluate getting back into the program when the next opportunity arose,” Terry said, referring to the 2020 start date for the next round of provider participants.

Terry said the stated goal of CMS officials for all providers to be in a downside-risk agreement by 2025 may necessitate some changes to the program.

“If they are seeing a lot of drops from the program then I think they are going to need to make adjustments around pricing—particularly on orthopedics—and maybe some other aspects of the program, to encourage more folks to participate,” Terry said.

Terry also heard from providers working with other conveners or operating in BPCI Advanced on their own that they haven’t been able to get high-quality data from CMS.

“So, it’s unclear how informed the decision was around March 1,” he said.

The electrophysiology practice left the model because its physicians focus on managing cardiac technology and were not well-positioned to manage—and take on financial risk for—patients’ overall cardiac health, Villacian said.

A small interventional-cardiology practice dropped the heart failure bundle from the set it was managing in BPCI Advanced because its physicians do not manage heart failure patients, Villacian said.

“They felt that they were not going to have enough volume and that the little volume that they could get could work against them because they didn’t manage the patient post-discharge that often,” Villacian said.

Bruno said care process redesign challenges found by some BPCI Advanced hospitals stemmed in part from their efforts to straddle both value-based payment and continued fee-for-service payments. Specifically, health systems that own their post-acute care providers found themselves financially conflicted when bundles required them to cut PAC providers in order to derive savings.

“Those will be some challenges that you see for those that lean on those (PAC) partners more heavily than others,” Bruno said.


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