WASHINGTON -- The Centers for Medicare & Medicaid Services (CMS) is implementing a new voluntary bundled services payment model for Medicare, the agency announced.
"BPCI [Bundled Payment for Care Improvement] Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value," CMS administrator Seema Verma said in a . "Under this model, providers will have an incentive to deliver efficient, high-quality care."
Unlike fee-for-service Medicare, in which providers are paid a separate fee for each service they perform, bundled payment schemes offer a single payment for a particular "episode" of care, which may include just outpatient care, or a hospital stay plus outpatient post-operative care. The earlier BPCI models, some of which began rolling out in 2013, offered participants 48 different episodes of care from which to choose; the new BPCI Advanced model offers 32 different episodes -- 29 inpatient and three outpatient.
The Trump Administration has resisted the use of mandatory bundled care models. In November, CMS canceled mandatory bundled care payment models for hip fractures and cardiac care, and scaled back the number of regions required to participate in a bundled care payment system for joint replacement.
BPCI Advanced, which will start in October, is different in several important respects from the older model, according to Carter Paine, chief operating officer of naviHealth, a Brentwood, Tennessee-based company that helps manage patients' transition to post-acute care and has participated in the older model. For one thing, CMS is incentivizing providers to reduce costs by 3% for each episode of care, rather than 2% as in the old model. "It's going to be interesting to see how that plays out," he said during an interview at which a public relations person was present.
In addition, "it lasts longer, up to 2023, which we think is a good thing," he said.
Finally, the fact that it has fewer episodes of care to choose from may indicate that "of the 48 original [episode types], many of those weren't being executed on, so probably they just bore down to episodes that actually have real volume," said Paine.
"I think BPCI 1.0 has proven to be successful for those participants that have hung in there," he added. "On the last go-round, people were sticking their toes in the water, and a lot of people were too nervous to get in -- that felt more like a pilot, and this is more of a long-term commitment. Given the success we've had in BPCI 1.0 ... I think people will participate more in this one, given there's a game plan in hand."
CMS's bundled payment initiative is part of the changes occurring in Medicare reimbursement under the Medicare Access and CHIP Reauthorization Act (MACRA). Under that regulation, physicians choose from two reimbursement systems: the Merit-Based Incentive Payment System (MIPS) program -- in which they must report at least 3 months of quality data -- or an an advanced alternative payment model (APM) such as an accountable care organization. BPCI Advanced will qualify as an advanced APM, the agency noted. That would allow physicians who participate to qualify for a 5% bonus.
Avalere, a consulting firm here, pointed out several other unique features in the new program. For example, unlike previous bundled payment initiatives, the agency will mandate participants to accept downside risk right away. That means participants won't be able to try out the model before accepting risk. And the program allows only hospitals and physician groups to participate, excluding other post-acute care providers.
"The BPCI Advanced announcement makes two things clear -- first, contrary to conventional wisdom, the current administration strongly endorses the bundled payment model," Fred Bentley, vice president at Avalere, said in a statement. "Second, the inclusion of BPCI Advanced as an advanced APM creates a powerful incentive for physicians to venture into episodic bundling."
The National Coalition on Health Care, a group that includes medical societies, businesses, unions, and healthcare providers, applauded the new model. "This is an important step forward and is evidence of CMS' commitment, under the leadership of Seema Verma, to advance delivery innovation in the Medicare program," John Rother, the coalition's president and CEO, said in a statement. "A voluntary episodic bundling program is an important element in the transition from volume to value. We look forward to continuing the conversation on value-based care with Congress and the administration moving forward in 2018."
Providers interested in participating in BPCI Advanced must submit an application by March 12 through the agency's . The CMS Innovation Center will hold an on Tuesday, Jan. 30, 2017 for those interested in learning more about the model.