Blog | Bundled Payment

CMMI announcement foreshadows more mandatory bundled payment models

Blog | Bundled Payment

CMMI announcement foreshadows more mandatory bundled payment models

  • On Sept. 10, CMMI announced to Bundled Payments for Care Improvement Advanced (BPCI-A) participants that it anticipates launching a mandatory episodic payment model after BPCI-A concludes its last performance year on Dec. 31, 2023.
  • For a mandatory model, CMMI will need to issue a proposed/final rule outlining the model, offering stakeholders an opportunity to comment.
  • Unless CMMI can come up with an alternative way of aggregating volume for physicians, it’s likely that hospitals will be the responsible party or episode initiator (like in the Comprehensive Care for Joint Replacement model).

CMMI announced Sept. 10 to Bundled Payments for Care Improvement Advanced (BPCI-A) participants that it anticipates launching a mandatory episodic payment model after BPCI-A concludes its last performance year on Dec. 31, 2023. HFMA’s Rich Daly provides additional coverage of the CMMI announcement.  

Key questions include:

  • Who will be the responsible party for the episode?
  • What episodes will be included?
  • How will those episodes be defined?
  • How will the target prices be calculated?

However, it may be awhile before we get more details. For a mandatory model, CMMI will need to issue a proposed/final rule outlining the model, offering stakeholders an opportunity to comment. Using Comprehensive Care for Joint Replacement model (CJR) as a guide, if you assume the first performance period for the mandatory model starts Jan. 1, 2024, then we can expect a proposed rule late 2022/early 2023, with the final released in the summer of 2023. 

Unless CMMI can come up with an alternative way of aggregating volume for physicians, it’s likely that hospitals will be the responsible party or episode initiator (like in CJR). In a voluntary model like BPCI-A, physician practices can opt in based on their determination of whether they have sufficient volume to make the investment in care redesign activities. The only other option would be to excuse physician TINs below a certain volume threshold which invites all sorts of gaming.

At the risk of stating the obvious, it’s likely CMMI will focus on high volume episodes that exhibit significant, unexplained spending variation. Which under the traditional BPCI/BPCI-A construct would lead me to focus on the usual suspects — lower joint replacement, hip and femur procedures (except lower joint replacement), renal failure, UTI, medical non-infectious orthopedic, stroke, COPD, CHF and pneumonia. These are all episodes that generated savings in the most recent BPCI evaluation report and were commonly selected episodes in BPCI-A.

However, this is thinking about “episodes” in the current BPCI/BPCI-A framework. The breadcrumb about mandatory models was included in a notice to BPCI-A participants about widely anticipated changes to episode pricing. One of the changes shifts the model from a focus on specific procedures/conditions to service lines. So, a mandatory model may also expand the definition of conditions/procedures included in an episode, which makes it hard to speculate on which episodes might be included in a mandatory model.

Bundled payment success factors

What will carry over from prior efforts around bundles are the key success factors. At a high level, these capabilities include the ability to:

  • Analyze internal data and claims data to understand opportunities to standardize care pathways.
  • Align incentives and engage providers in care pathway re-engineering.
  • Support patients through navigation across the care continuum.
  • Discharge patients to high-value providers in the most appropriate PAC setting.  

HFMA's Value Project provides needed insight

HFMA’s Value Project research provides insight into how progressive organizations are developing and deploying these capabilities.

About the Author

Chad Mulvany, FHFMA,

is director, healthcare finance policy, strategy and development, HFMA’s Washington, D.C., office.

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