Exploring the Bundled Payments for Care Improvement Advanced Model
The Bundled Payments for Care Improvement (BPCI) Advanced initiative is a retrospective bundled payments model from Medicare that qualifies as an Advanced APM under MACRA.
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By - CMS recently unveiled the Bundled Payments for Care Improvement (BPCI) Advanced initiative, a new bundled payments model that will include inpatient and outpatient clinical episodes and qualify as an Advanced Alternative Payment Model (APM) under MACRA.
The newest CMS Innovation Center addition will build off the existing Bundled Payments for Care Improvement initiative, which launched in 2015. The newest iteration of the BPCI notably differs from the original because of its financial risk structure.
CMS increased the financial risk providers assume for clinical episodes under the BPCI Advanced model. Participating providers will assume more than nominal financial risk according to Advanced APM standards.
Participating in the BPCI Advanced will qualify Medicare providers for maximum incentive payments under MACRA’s Quality Payment Program, making the model an attractive option for providers already engaging in bundled payments.
In the following article, RevCycleIntelligence.com will examine the basics of the BPCI Advanced initiative and how providers can join the new bundled payments model.
What is the BPCI Advanced model?
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CMS describes the BPCI Advanced initiative as a “single retrospective bundled payment and one risk track, with a 90-day clinical episode duration.” The model is a voluntary program for acute care hospitals and physician group practices that will launch in Oct. 2018 and runs until the end of 2023.
The bundled payments model includes 29 inpatient and 3 outpatient clinical episodes. The addition of outpatient episodes marks a distinct difference between the original BPCI initiative. The original BCPI only contains 48 inpatient clinical episodes.
Outpatient clinical episodes in the BPCI Advanced model are percutaneous coronary intervention (PCI), cardiac defibrillator, and back and neck episodes, excluding spinal fusions.
Providers are increasingly delivering these interventions in the outpatient setting. Inpatient rates tend to be significantly higher than those for outpatient services, incentivizing providers to admit patients. But CMS recently increased its inpatient versus outpatient scrutiny in efforts to reduce healthcare spending and unnecessary utilization, causing providers to shift where they perform certain procedures.
The BPCI Advanced addresses recent utilization trends and further incentivizes providers to deliver certain interventions in the cheaper outpatient setting if patients do not need intensive inpatient services.
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CMS intends to add more outpatient services to the BPCI Advanced as the model matures.
Clinical episodes start with an inpatient admission at an acute care hospital or the beginning of an outpatient procedure.
CMS will attribute the 90-day clinical episode to the episode initiator. The attribution hierarchy for the different types of episode initiators is as follows, in descending order of precedence:
• Physician group practices that submit a claim including a National Provider Identifier (NPI) for the attending physician
• Physician group practices that submit a claim including the NPI of the operating physician
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• Acute care hospitals where the services triggered the clinical episode
The federal agency noted that it will not use time-based precedence rules for the BCPI Advanced model.
How will providers get paid under the BPCI Advanced?
The BCPI Advanced in a retrospective bundled payments model. Participating providers will receive Medicare fee-for-service payments throughout the 90-day clinical episode and CMS will reconcile the payments semi-annually by comparing actual care costs to a target price.
Providers can either share in the savings if actual care costs for a clinical episode are below the target price or repay CMS a portion of the financial losses if actual costs exceed the price.
Episode initiators will receive target prices before selecting clinical episodes. The price is based on the benchmark price and the CMS discount, which is 3 percent for the model’s initial performance periods.
CMS will determine clinical episode benchmarks for acute care hospitals based on the following:
• Patient case mix
• Spending patterns compared to the hospital’s peer group
• Historical Medicare fee-for-service spending efficiency in resource use
Physician group practices will face a modified benchmark methodology because, “since physician affiliation to a PGP changes over time, discrepancies often occur between the pool of clinical episodes in the baseline period and the pool of clinical episodes in the performance period,” CMS wrote in a fact sheet.
A practice’s benchmark will be based on the spending target for the hospital where the admission or outpatient procedure occurred. CMS will then adjust the hospital’s benchmark based on the physician group practice’s historical efficiency and patient case mix relative to the acute care hospital.
Payment reconciliations also factor in quality performance. Providers will be assessed on the following quality measures:
• All-cause Hospital Readmission Measure (NQF #1789)
• Advanced Care Plan (NQF #0326)
• Perioperative Care: Selection of Prophylactic Antibiotic: First or Second Generation Cephalosporin (NQF #0268)
• Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550)
• Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Coronary Artery Bypass Graft Surgery (NQF #2558)
• Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (NQF #2881)
• AHRQ Patient Safety Indicators (PSI 90)
Positive and negative reconciliations are adjusted based on quality performance.
What is the financial risk structure of the BCPI Advanced?
What sets BPCI Advanced apart from other Medicare bundled payment models is its downside financial risk component, which qualifies the model as an Advanced APM. The Oncology Care and Comprehensive Care for Joint Replacement models are the only other bundled payment programs that currently qualify for Advanced APM status.
According to CMS, the financial risk structure of the bundled payments model is as follows:
“Reconciliation payments, both to participants from CMS, and from participants to CMS, are capped at +/- 20% of the volume-weighted sum of the final target prices across all clinical episodes netted to the level of the episode initiator within the performance period.”
CMS explained in an FAQ response that the risk exposure level of 20 percent is the same as predecessor bundled payment models. The federal agency finalized this structure rather than the 8 percent revenue-based nominal amount standard or 3 percent expected expenditure standard under the Advanced APM program.
CMS intends to increase Advanced APM financial risk standards as the Quality Payment Program matures. Lower risk exposure in the BPCI Advanced would make the model insufficient for Advanced APM status by the 2021 Quality Payment Program performance year.
The risk exposure level will be the same for hospitals and physician group practices because the level “appropriately balances expected gains given overall spending during the clinical episode.”
Who is eligible to participate and how to apply
Acute care hospitals and physician group practices, as well as suppliers, are eligible to join the BPCI Advanced model as convener participants. A convener participant “brings together multiple downstream entities referred to as ‘Episode Initiators’—which must be either Acute Care Hospitals (ACHs) or Physician Group Practices (PGPs)—to participate in BPCI Advanced, facilitates coordination among them, and bears and apportions financial risks,” the FAQs stated.
Hospitals and physician group practices can also be non-convener participants, which are episode initiators and bear financial risk for only for themselves.
The following entities are prohibited from joining the BCPI Advanced model because of their unique reimbursement structures:
• Cancer hospitals exempt from the prospective payment system
• Inpatient psychiatric facilities
• Critical access hospitals
• Hospitals in Maryland
• Hospitals participating in the Rural Community Hospital Demonstration
• Hospitals participating in the Pennsylvania Rural Health model
Eligible providers can apply to the bundled payments model by submitting a Request for Application, which can be found on the BPCI Advanced webpage along with additional required documents.
Providers can submit actual applications and required documents on the BPCI Advanced Application Portal starting on Jan. 11, 2018. The application period will end on March 12, 2018.
CMS will also offer another application period for the 2020 performance year at a later date.
