AHA Calls for Bundled Payments Delay, Reform for BPCI Advanced

February 21, 2018 - Though supportive of the Bundled Payments for Care Improvement Advanced (BPCI Advanced), the American Hospital Association (AHA) recently urged CMS to delay the model’s application deadline until the federal agency provides additional information and possible reforms.

“CMS’s announcement of BPCI Advanced and the corresponding materials raise important questions for our members about the model’s implementation,” the organization’s Executive Vice President of Government Relations and Public Policy Thomas P. Nickels wrote. “Of particular concern is the lack of sufficient operational detail about the model, making it difficult for hospitals and clinicians to make well-informed decisions as to participation.”

The AHA advised CMS to postpone the application deadline from March 12 to April 16 so the federal agency has time to provide a “complete package of detailed programmatic information…by March 1.”

The industry group particularly wants additional BPCI Advanced information and reforms for target price calculations, attribution methodology, and quality measures.

Target price calculation

Each BPCI Advanced participant will receive a target price that they must stay under to earn incentive payments. For the model’s first two years, CMS plans to calculate the target price based on historical Medicare fee-for-service spending during care episodes, adjusted for a hospital’s past performance, patient characteristics, and peer group characteristics.

READ MORE: Key Strategies for Succeeding with Healthcare Bundled Payments

The AHA commended CMS for adjusting target prices for hospital case mix. Adjusting for peer group and regional spending in the target price can hold hospitals accountable for the same target price without accounting for differing levels of severity of patient populations at each facility.

Therefore, patient case mix adjustments prevent the BCPI Advanced from penalizing hospitals that treat the sickest, most vulnerable patient populations, the industry group explained.

However, additional policies are needed to prevent hospitals from competing against their best performance, AHA added. BCPI Advanced target prices account for past performance, but cost-efficient hospitals will not benefit from this practice because CMS will eventually have to lower their target prices to a point that could jeopardize care quality.

Regional and peer group adjustments should partially counteract this effect. However, cost-efficient hospitals in historically low-spending areas will face the same challenge with constantly falling target prices.

CMS should use the higher of the national or regional historical episode spending to adjust the target price, AHA suggested. This policy will provide appropriate incentives for BCPI Advanced hospitals in both low- and high-spending areas.

READ MORE: How to Address Bundled Payment Cost Reduction Challenges

The federal agency should also adjust target prices on an annual basis, the industry group advised. Participants in the original BPCI initiative and accountable care organization (ACO) models have faced changing target prices during a performance period, making it difficult to achieve cost reduction goals.

Updating target prices on an annual versus semi-annual basis will help to stabilize target prices for BPCI Advanced participants, AHA explained.

The industry group added that CMS should “provide a detailed methodology for how it will re-base target prices and to ensure that any re-basing methodologies do not progressively lower target prices at an unachievable rate.”

Attribution methodology

With the BPCI Advanced holding participants accountable for care spending attributable to providers and suppliers not participating in the bundled payments model, CMS should consider more equitable options for attribution, AHA advised.

Currently, the BPCI Advanced attributes clinical episodes at the episode initiator level according to the following hierarchy:

READ MORE: Key Considerations for Bundled Payment Model Adoption, Success

• CMS attributes episodes to a physician group practice that submits a claim that includes an attending physician

• CMS attributes the episode to the physician group practice that includes the operating physician

• CMS attributes the episode to the hospital that furnished the services that triggered the episode

The AHA expressed concerns that placing hospitals at the bottom of the attribution hierarchy would discourage hospitals from participating in the BPCI Advanced.

Furthermore, CMS did not incorporate time-based precedence rules in the newest iteration of the BCPI.

“This further handicaps hospitals, as physician groups who enter the program in later years can significantly reduce the episodes attributed to a hospital that has participated in the model since its inception,” Nickels wrote. “Hospitals are well poised to bring providers together to improve the value and patient experience of care, and a more equitable attribution model would support their participation in BPCI Advanced.”

Quality measures

The AHA called on CMS to provide comprehensive information on the BPCI Advanced’s Composite Quality Score methodology.

Under the bundled payments model, CMS will link provider reimbursement to quality performance using a Composite Quality Score. Participants will receive a score on each applicable quality measure at the episode level and the federal agency will scale the scores across all episodes attributed to the episode initiator. Then, CMS will weight the scores based on episode volume and sum the scores for an episode initiator Composite Quality Score.

For the first two years of the BPCI Advanced, CMS anticipates capping the amount by which the composite score can adjust payment reconciliation at 10 percent.

However, the AHA urged CMS to provide additional information on how Composite Quality Scores can adjust reconciliations and how quality measure benchmarks factor into composite scores. The information is key for applicants to see how the Composite Quality Score adjustment methodology will impact their revenue.

The industry group also advised CMS to clarify which quality measures can be applied to specific care episodes. For example, CMS will require a hospital-wide readmission measure for all episode initiators and the advanced care plan measure for all physician group practice initiators.

But the AHA was unclear which of the five other measures included in the initial quality measure set would be applied to certain care episodes.

Additionally, CMS should reconsider the appropriateness of certain quality measures in the BPCI Advanced. Certain measures should be reconsidered because they do not align with the care episodes and patient populations in the bundled payments model.

For example, the hospital-wide readmissions measure needs clarification on whether all hospitalized patients are included in the measure or just patients in BPCI Advanced. PSI-90 should also be eliminated because it is not currently specified for ICD-10.

Finally, CMS should adjust for sociodemographic factors for readmission, complication, and mortality measures, the AHA suggested.

“While these three topics are important, a significant body of research has demonstrated that community factors beyond providers’ control – such as the ability for patients to afford medications, easy access to appropriate food and so forth – can significantly influence the likelihood of a patient’s health improving after discharge or after an outpatient procedure,” Nickels wrote.

“A sociodemographic adjustment using a well-established proxy for community factors – such as income or dual-eligibility for Medicare and Medicaid – would help to level the playing field among providers caring for large numbers of disadvantaged patients and those who do not do so.”

The AHA advised CMS to implement a sociodemographic adjustment methodology similar to the approach used in the Hospital Readmissions Reduction Program (HRRP). The HRRP places hospitals into peer groups based on the number of dual-eligible patients treated at the facility.

CMS could also use a similar methodology as that in the Merit-Based Incentive Payment System (MIPS), the AHA offered. Under MIPS, eligible clinicians earn bonus points based on the proportion of dual-eligible patients treated and their Hierarchical Condition Categories (HCC) scores.

In addition to reforms for target prices, attribution, and quality measures, the AHA also advised CMS to do the following before the BPCI Advanced application deadline:

• Clarify Medicare enrolled and non-Medicare enrolled convener participants, and permit the latter to join the model without downside risk like the awardee and facilitator distinction in the original BCPI program

• Complete waivers for Physician Self-Referral law and Anti-Kickback Statute to allow participants to form financial relationships with other providers in the model

• Waive the inpatient rehabilitation facility (IRF) “60% rule,” IRF “three-hour rule,” the 25% Patient Threshold rule, as well as the home health homebound rule to allow post-acute care providers to participate

• Provide episode-specific list of MS-DRGs that will be excluded from the bundled payment model as soon as possible

• Enter Data Use Agreements with participants to allow CMS to provide data on a routine basis without the data request process

• Provide aggregate, non-beneficiary-identifiable information on the average total spending for relevant episodes in their region on at least a monthly basis

• Qualify the BPCI Advanced as a MIPS Alternative Payment Model

“The changes we recommend above would help facilitate hospitals’ participation in and success under the BPCI Advanced model with regard to providing quality care to Medicare beneficiaries and achieving savings for the Medicare program,” Nickels concluded. “We appreciate your consideration of these issues and look forward to continuing to work with CMS on matters of great importance to hospitals, beneficiaries and the Medicare program.”