VOLUME 9 - ISSUE 123
JUNE 6, 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.



Many Oncologists Will Lose Money Under CMS' Two-Sided Risk Payment Model, Study Finds
A new analysis from Avalere Health predicts that more than half of all oncology practices participating in the Centers for Medicare & Medicaid Services' (CMS) Oncology Care Model could end up owing the government money if they are required to join in a two-sided risk payment model. Beginning in July, CMS plans to require practices that have not yet achieved a performance-based payment in any of the first four performance periods of the program to switch to a two-sided risk arrangement or exit the program, Avalere said. Estimates from Avalere project that around 70% of the oncology practices participating in the Oncology Care Model would owe CMS payments to recoup costs if they are pushed from their current one-sided, upside risk arrangement to a two-sided risk arrangement. Under a two-sided risk arrangement, many practices will be made to pay penalties for delivering care at a cost that does not meet, or comes in below, the cost threshold set by CMS. Starting in July, participants can choose from two risk-bearing arrangements where they will face penalties for not meeting cost targets. One is the original track created at the start of the program and the other is a recently announced alternative track that offers less downside risk by creating a neutral performance zone in which providers neither get paid or owe money based on a cost threshold. Based on Avalere's evaluation, nearly all practices would fare better in the new alternative arrangement, but roughly half would still owe payments even under the less risky model.


Courtesy of Avalere Health

Practices will have to weigh the pros and cons of the program, Avalere experts said. They will need to evaluate not only their ability to earn performance-based payments in the program but also improvement costs, the value of the program's monthly enhanced services payments and the potential to receive 5% bonus payments for qualifying as an alternative payment model participant under CMS' Quality Payment Program, established under MACRA. (FierceHealthcare, May 23, 2019)

Reduced Spending with Mandatory Bundled Payments for Joint Replacements

SUMMARY
Launched in 2016, the Centers for Medicare & Medicaid Services (CMS) Comprehensive Care for Joint Replacement (CJR) model provides a wide-scale, mandatory, episode-based bundled payment program for lower extremity joint replacement.1 This alternative payment model incentivizes hospitals, physicians, and postacute care from initial hospitalization through 90 days of recovery to reduce episodic costs without negatively affecting outcomes.1 Market-level randomization of the CJR program to an array of metropolitan statistical areas forms a natural test-bed for health policy experiments, including the well-designed, intention-to-treat, difference-in-differences study in this issue of JAMA Internal Medicine.2 The study provides a timely analysis of how the CJR program is progressing toward its goal of slowing Medicare spending without sacrificing quality.1,3,4 We comment on the assessment of differences in spending, use, quality, and patient characteristics between hospitals participating in CJR with non-CJR institutions during the first 18 months of the program.

(JAMA Internal Medicine, June 3, 2019)

Evaluation of Economic and Clinical Outcomes Under Centers for Medicare & Medicaid Services Mandatory Bundled Payments for Joint Replacements

KEY POINTS

Question How did Medicare spending, quality, volume of episodes, and patient characteristics change for primary lower extremity joint replacements after the Comprehensive Care for Joint Replacement model was instituted?

Findings In the first 2 years, 90-day Medicare Part A spending decreased significantly by $582 per episode (-2.5%) associated with the Comprehensive Care for Joint Replacement model, driven by a 5.5% decrease in postacute spending. No detectable changes in hospital length of stay, readmissions, complications, 30- or 90-day mortality, volume of episodes, or patient characteristics relative to control were found.

Meaning Over 2 years, the Comprehensive Care for Joint Replacement model was associated with reduced Medicare Part A spending driven by postacute savings, without changes in volume, quality, or patient selection.

ABSTRACT

Importance In 2016, the Centers for Medicare & Medicaid Services (CMS) launched its first mandatory bundled payment program, the Comprehensive Care for Joint Replacement (CJR) model, by randomizing metropolitan statistical areas (MSAs) into the payment model.

Objective To evaluate changes in key economic and clinical outcomes associated with the CJR model.

Design, Setting, and Participants A retrospective, national, population-based analysis of Medicare fee-for-service beneficiaries undergoing lower extremity joint replacement was conducted using 100% Medicare Part A data and 5% Medicare Part B data. Within an intention-to-treat framework, a difference-in-differences approach was used to compare Medicare spending, quality of care, volume of episodes, and patient selection in episodes of lower extremity joint replacements in the first 2 years of the program between propensity score--matched CJR and non-CJR hospitals (episodes initiated from April 1, 2016, through December 31, 2017, with the latter completed by March 31, 2018). Lower extremity joint replacement episodes in MSAs randomly assigned to the CJR model were compared with those in MSAs not assigned to the CJR model.

Exposures Random assignment of MSAs into the CJR model within prespecified strata.

Main Outcomes and Measures Spending and its components, quality of care, volume of episodes, and patient characteristics were the main outcomes.

Results After propensity score matching, there were 157,828 primary lower extremity joint replacement cases across 684 hospitals in the CJR (treatment) group (101 641 [64.4%] women; mean [SD] age, 72.8 [8.9] years) and 180?594 cases across 726 hospitals in the non-CJR (control) group (115,580 women [64.0%] women; mean [SD] age, 72.6 [8.8] years). The CJR was associated with a decrease of $582 per episode in Medicare Part A spending, a 2.5% savings on claims (95% CI, -$873 to -$290; P<.001) driven by a 5.5% decline in 90-day postacute care spending, concentrated in skilled nursing facilities (-4.5% change from baseline; 95% CI, -$460 to -$26; P?=?.03) and inpatient rehabilitation facilities (-22.9% change from baseline; 95% CI,-$497 to -$176; P<.001). Estimated savings on claims, while consistent with changes in practice patterns, may not have exceeded the reconciliation payments to hospitals reported by CMS to date. No significant changes in hospital length of stay, readmissions, complications, 30- or 90-day mortality, volume of episodes, or patient characteristics relative to control were found.

Conclusions and Relevance The CJR was associated with reduced Medicare Part A spending on claims over 2 years, largely through lower postacute spending. Mandatory bundled payments may serve as a useful model for policy efforts to change clinicians' and facilities' behavior without harming quality.

(JAMA Internal Medicine, June 3, 2019)



The Problems of Bundled Payments in Spine: Dr. Praveen Mummaneni
Praveen Mummaneni, MD, of the University of California San Francisco is a neurosurgeon who directs several UCSF programs on the cervical spine, including the fellowship program in minimally invasive and complex spine surgery. He currently serves as co-director of the UCSF Spine Center. Here, Dr. Mummaneni provides his opinion on bundled payments in spine. (Becker's Spine Review, May 30, 2019)

UnitedHealthcare Launches New Maternity Care Bundled Payment Program
As part of its larger effort to move the bulk of its business to value-based payment models, UnitedHealthcare has launched a bundled payment program for maternity care meant to help close gaps in care, support healthy pregnancies and reduce the risk of complications. The new program, which has launched with Lifeline Medical Associates in New Jersey and Privia Medical Group -- Gulf Coast in Texas, will be expanded to as many as 20 provider groups by the end of 2019. The two launch clinics are a part of the U.S. Women's Health Alliance, a national consortium of OBGYN practices dedicated to improving the quality of women's healthcare. The bundled payment model applies to commercially insured members who have access to the program at no additional cost. Maternity care accounts for one of the largest reasons for hospitalization and studies have shown large variation in cost for care across facilities. (MedCity News, May 9, 2019)

Dr Michael E. Chernew Discusses Mandatory and Voluntary Bundled Payment Models
The advantage of having mandatory models is it enables you to get participation broadly across the community and it allows you to design the bundle in a way that's not so intent on encouraging participation.

If you have voluntary participation you are somewhat limited as to how you could design the bundle, because if you design it too aggressively no one will participate, explained Michael E. Chernew, PhD, the Leonard D. Schaeffer Professor of Health Care Policy; director of the Healthcare Markets and Regulation Lab in the Department of Health Care Policy at Harvard Medical School; and co-editor-in-chief of The American Journal of Managed Care®. (The American Journal of Managed Care, May 12, 2019)




The Future of Payment Reform: Why Providers Can't Afford to Ignore BPCI Advanced Cohort 2
A new analysis from Avalere Health predicts that more than half of all oncology practices participating in the Centers for Medicare & Medicaid Services' (CMS) Oncology Care Model could end up owing the government money if they are required to join in a two-sided risk payment model. Beginning in July, CMS plans to require practices that have not yet achieved a performance-based payment in any of the first four performance periods of the program to switch to a two-sided risk arrangement or exit the program, Avalere said. Estimates from Avalere project that around 70% of the oncology practices participating in the Oncology Care Model would owe CMS payments to recoup costs if they are pushed from their current one-sided, upside risk arrangement to a two-sided risk arrangement. Under a two-sided risk arrangement, many practices will be made to pay penalties for delivering care at a cost that does not meet, or comes in below, the cost threshold set by CMS. Starting in July, participants can choose from two risk-bearing arrangements where they will face penalties for not meeting cost targets. One is the original track created at the start of the program and the other is a recently announced alternative track that offers less downside risk by creating a neutral performance zone in which providers neither get paid or owe money based on a cost threshold. Based on Avalere's evaluation, nearly all practices would fare better in the new alternative arrangement, but roughly half would still owe payments even under the less risky model.

See a related article in Becker's CFO Report here: Why Providers Can't Ignore BPCI Advanced


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Panel I: Private Sector Value-based Payment Initiatives

Julian Harris, MD, MBA
President, CareAllies, a CIGNA Company; External Advisory Board Member, Department of Population Health, NYU School of Medicine; Fellow, Mossavar-Rahmani Center for Business and Government and Taubman Center for State and Local Government, Harvard Kennedy School, New York, NY