Value-Based Care News

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.

Bundled payments model

Source: Thinkstock

By Jacqueline LaPointe

- 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.

Over 830 acute care hospitals and 715 physician group practices signed up to participate in BPCI Advanced in October 2018, bringing the total number of Medicare providers and suppliers in the program to 1,547.

CMS gave providers until March 1, 2019, to decide if they want to continue participating in the advanced bundled payments model. Initial participants could terminate their participation completely or withdraw some of their clinical episodes or episode initiators by the deadline without any penalty.

Over 200 entities dropped out of the program by the March 1 deadline, CMS recently reported. Specifically, 715 acute care hospitals and 580 physician group practices remain in the program, totaling 1,295 Medicare providers.

The advanced bundled payments model has had a rocky start. CMS had to delay deadlines for potential participants prior to the October 2018 start date because the agency failed to deliver data on episode target prices in May 2018 as they intended.

Some providers told the American Hospital Association (AHA) that they never received the information by June 2018. Providers needed the data to make decisions about which clinical episodes to include.

Despite early setbacks, CMS still described the number of BCPI Advanced participants as “robust” in the emailed announcement about participation data. And the agency expects more providers to join the program.

In a separate email, CMS announced the application period for the program’s third performance year. The agency intends to open the application period for the second cohort of participants in April 2019. The third performance year will start on January 1, 2020.

CMS also does not plan to have additional enrollment periods for the program’s fourth or fifth performance years (2021 and 2022).

Through BPCI Advanced, CMS plans to improve quality and reduce costs for inpatient and outpatient care, as well as advance the value-based care transformation.

The new program notably builds on previous bundled payments models by including greater downside financial risk. The 20 percent risk exposure level in the model aims to incentivize providers to improve care quality and lower costs.

Currently, only two other Medicare bundled payments models – the Oncology Care (OCM) and Comprehensive Care for Joint Replacement (CJR) models – also qualify as Advanced APMs, which require providers to assume downside financial risk.

Financial risk levels may be behind recent BPCI Advanced drop-outs. Most providers are risk-averse and assuming downside financial risk for certain clinical episodes may be preventing BPCI Advanced participants from continuing in the program.

The Government Accountability Office (GAO) recently found that providers are likely to discontinue their participation in voluntary bundled payment models if they have to assume downside financial risk.

A group of oncology providers told the federal watchdog that “many physician practices were willing to participate in OCM when they only faced the possibility of losing bonus payments (i.e. ‘upside risk’), but they said providers might not continue to participate when the model required them to bear financial responsibility for episodes and face the prospect of financial penalties (i.e., ‘downside risk’).”