APRIL 2, 2019

Welcome to the Bundled Payment Update eNewsletter
Editor: Philip L. Ronning
This issue sponsored by the collocated National Bundled Payment Summit, the National ACO Summit, and the National MACRA Summit.

MedPAC Considers Bundled Payments for Post-Acute Care: 5 Things to Know
The Medicare Payment Advisory Commission, a federal group that advises Congress on Medicare, discussed using bundled payments for post-acute services, according to a March 8 presentation. Here are Five things to know:

  1. MedPAC said current fee-for-service policies can result in inaccurate and inequitable payments for post-acute care.
  2. Instead, bundled payments could encourage providers to make care more efficient and take on greater accountability for the continuum of care, the federal group said.
  3. MedPAC also said a bundled payment model could improve care coordination for Medicare beneficiaries, as the number of transitions between providers would decrease.
  4. The federal group also considered a stay-based payment model, but presenters cautioned payments based on stays wouldn't incentivize providers to move from fee-for-service operations.
  5. While bundled payments have the potential to shorten episodes, MedPAC analysts said they could inadvertently lead providers to select patients, withhold costly care or base transfer decisions on financial factors, according to the presentation.

For the full presentation, click here. (Becker's Hospital CFO Report, March 13, 2019)

Participation in Advanced Bundled Payments Model Falls 16%
Over 200 entities dropped out of Medicare's new advanced bundled payments model within the first five months, CMS reports. Provider participation in Medicare's new advanced bundled payments model dropped by about 16 percent in the first five months, according to updated data from CMS. The federal agency recently announced via email that 1,086 healthcare providers are still participating in the Bundled Payments for Care Improvement Advanced (BPCI Advanced). CMS initially launched the model in October 2018 with 1,299 entities signed up. BPCI Advanced was the first alternative payment model from the Trump Administration. The voluntary model, which runs until December 31, 2023, tests a new iteration of bundled payments for 32 clinical episodes, including inpatient and outpatient episodes. Hospitals and providers in the model receive a single, retrospective payment to cover the costs of a 90-day clinical episode. Participants can also earn additional payments by joining the shared risk track, in which Medicare will share savings with providers if they keep total episode costs less than the benchmark price minus three percent. However, providers in the shared risk track could also have to repay Medicare up to 20 percent of episode costs that exceed the benchmark price. The model qualifies as an Advanced Alternative Payment Model (Advanced APM) under Medicare's new Quality Payment Program, meaning participants are exempted from reporting to the Merit-Based Incentive Payment System (MIPS) and they can earn an extra incentive payment through BCPI Advanced participation. (RevCycle Intelligence, March 25, 2019)

BPCI Advanced Down to 1,295 Providers as 252 Drop Out
CMS announces 715 acute care hospitals and 580 physician group practices remain in the bundled payments for care improvement advanced program. More than 250 providers have dropped out of BPCI Advanced, but despite the 16 percent drop in numbers, the Centers for Medicare and Medicaid Services and two conveners interviewed still call participation in the bundled payment model robust. CMS on Thursday announced 715 acute care hospitals and 580 physician group practices remain in the bundled payments for care improvement advanced program, for a total of 1,295 Medicare providers. This is a loss of 252 providers from the 832 acute care hospitals and 715 physician group practices, a total of 1,547, which began the program in October. A total of 1,086 contracts, that can cover numerous providers, remain as participants for the BPCI Advanced model for year 2. In October 2018, that number was 1,299. "My take is that I'm not surprised, participants were aware of this withdrawal opportunity," said Gina Bruno, vice president clinical strategy, naviHealth. Most providers "saw this as participation at scale. I think knowing that they had that get-out-of-jail free card led some to be more ambitious in participation. I'm also not surprised so many have remained." Archway Health expected to see some providers drop-out completely and also to drop-out of certain bundles, said Keely Macmillan, general manager of BPCI Advanced for Archway. About 35 percent dropped out of the bundled model for major joint replacement of the lower extremity. This was due to CMS's change in payment, taking total knee replacement off the inpatient only list and reimbursing as outpatient surgery. Hospitals volume dropped so much it didn't make sense to participate in program, she said. (Healthcare Finance, March 2, 2019)

Bundle Payment Model Analysis of Emerging Breast Cancer Screening
Bundled payments have been touted as mechanisms to optimize quality and costs. A prior feasibility study evaluating bundled payments for screening mammography episodes predated widespread adoption of digital breast tomosynthesis (DBT). A new study, published online in the Journal of the American College of Radiology (JACR), explores an episodic bundled payment model for breast cancer screening that reflects the emerging widespread adoption of DBT. "Bundled episodic payments are an important type of alternative payment model (APM) that incentivize cost savings within discrete episodes of care," said the new study's lead author Margaret Fleming, assistant professor of radiology and imaging sciences at Emory University. "More recent interest has been expressed in developing outpatient imaging-based cancer screening episodes." In the earlier 2016 JACR study, Hughes and colleagues explored the feasibility of screening mammography as a potential bundle payment model. The claims data they used predated the implementation of Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes to report digital breast tomosynthesis (DBT), and thus did not consider the potential impact of this emerging service on their proposed bundled prices. Since receiving approval from the US FDA in 2011, DBT has gained widespread acceptance. (Eureka!, March 4, 2019)

CMS to Begin Accepting BPCI Advanced Applications for 2020 in April
The Centers for Medicare & Medicaid Services next month will begin accepting applications to participate in its second cohort of the Bundled Payments for Care Improvement Advanced Model starting in January 2020. Launched last October, the Advanced Alternative Payment model will run through 2023. However, CMS currently does not intend to have enrollment periods for 2021 and 2022. Participants assume risk for patients' health care costs and can qualify for incentive payments and exemption from reporting requirements under Medicare's Quality Payment Program for clinicians if they meet certain quality and other requirements. Acute-care hospitals and physician group practices may apply as a non-convener, meaning they initiate clinical episodes under the model, or as a convener, meaning they bear risk for multiple downstream clinical episode initiators. Post-acute care providers and accountable care organizations may apply to participate as a convener. After the March 1 deadline for participants to withdraw completely or from selected episodes without financial risk, a total of 715 acute-care hospitals and 580 physician group practices are participating this year in the model, which currently includes 29 inpatient and three outpatient bundled clinical episodes. This is down from 832 hospitals and 715 physician group practices in the first year of the model. CMS is finalizing the selection of new clinical episodes for 2020, which will include outpatient total knee arthroplasty. For more information and an updated list of participants, episode initiators and clinical episode selections for 2019 (year 2), visit https://innovation.cms.gov/initiatives/bpci-advanced. (American Hospital Association, March 22, 2019)

Humana Launches Bundled Payment for Spinal Fusions at 4 Practices, Wxpands Joint Replacement Program -- 6 Insights
Humana is expanding its value-based orthopedic care program by offering Humana Medicare Advantage members access to bundled payments for spinal fusion surgery. What you should know:

  1. The Spinal Fusion Episode-Based Model will offer physicians additional payments based on patient outcomes and cost across the episode-of-care. Humana measures outcome improvement by weighing readmissions, cervical complications and lumbar complications. The payer compares that figure to average risk-adjusted episodic cost-of-care.
  2. Humana also expanded its total joint replacement bundle program by entering into agreements with eight more orthopedic groups across the U.S.
  3. The total joint bundle is offered at more than 60 practices in 19 states. Humana launched its spinal fusion bundle with four practices: Fort Wayne (Ind.) Orthopedics, Fort Wayne-based Ortho NorthEast, Cincinnati-based Mayfield Brain & Spine and OrthoVirginia with locations in Lynchburg, Richmond and northern Virginia.
  4. Since Humana launched the total joint replacement bundle in 2016, it has expanded its reach on a yearly basis.
  5. Humana has three value-based bundled payment offerings in total, the aforementioned two in orthopedics and a maternity episode-based model.
  6. Humana's President of Value-Based Strategies Organization Oraida Roman said, "We're excited to focus on spinal fusion surgery with our newest orthopedic episode-of-care model. This program is a logical 'next step' for us in value-based care."

(Becker's Spine Review, March 13, 2019)

BPCI Data Update

One of the most important goals at CMS is fostering an affordable, accessible healthcare system that puts patients first. A bundled payment methodology involves combining the payments for physician, hospital, and other health care provider services into a single bundled payment amount. This amount is calculated based on the expected costs of all items and services furnished to a beneficiary during an episode of care. Payment models that provide a single bundled payment to health care providers can motivate health care providers to furnish services efficiently, to better coordinate care, and to improve the quality of care. Health care providers receiving a bundled payment may either realize a gain or loss, based on how successfully they manage resources and total costs throughout each episode of care. A bundled payment also creates an incentive for providers and suppliers to coordinate and deliver care more efficiently because a single bundled payment will often cover services furnished by various health care providers in multiple care delivery settings.

Model Overview
BPCI-Advanced is defined by following characteristics:

  • Voluntary Model
  • A single retrospective bundled payment and one risk track, with a 90-day Clinical Episode duration
  • 29 Inpatient Clinical Episodes
  • 3 Outpatient Clinical Episodes
  • Qualifies as an Advanced APM
  • Payment is tied to performance on quality measures
  • Preliminary Target Prices provided in advance of the first Performance Period of each Model Year

BPCI Advanced aims to encourage clinicians to redesign care delivery by adopting best practices, reducing variation from standards of care, and providing a clinically appropriate level of services for patients throughout a Clinical Episode.

BPCI Advanced will operate under a total-cost-of-care concept, in which the total Medicare fee for services (FFS) spending on all items and services furnished to a BPCI Advanced Beneficiary during the Clinical Episode, including outlier payments, will be part of the Clinical Episode expenditures for purposes of the Target Price and reconciliation calculations, unless specifically excluded.

(CMS, accessed March 25, 2019)

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Is the Value Movement Delivering Value?

Joseph J. Grogan
Associate Director, Health Programs, Office of Management and Budget, The White House