Who, what, when, why, how: Everything you need to know about BPCI

Bundled payments have arrived, and they are likely here to stay, as CMS continues to align more of its Medicare contracts with quality and cost incentives.

"This is not a galaxy far, far away," Asim Usman, MD, divisional executive vice president of EmCare, said in a webinar hosted by Becker's Hospital Review and EmCare. Joining Dr. Usman was EmCare divisional executive vice president Alexander Strachan Jr., MD, who agreed bundles are not a distant star in the sky, especially considering the recent launch of CMS' mandatory Comprehensive Care for Joint Replacement program.

Both Drs. Usman and Strachan advised providers to start preparing for this inevitable shift in healthcare delivery. To get preparations rolling, they offered the following guide to CMS' Bundled Payments for Care Improvement initiative.

What is BPCI?
"We all know there is a shift going on in payment methodology," Dr. Usman said, describing a trend of transitioning payment models from fee-for-service to entirely population-based payments. Bundled payments fall closer to the population-based payment end of the spectrum, but are still based on fee-for-service architecture, Dr. Usman said.

More than 6,500 Medicare providers have signed up to participate in BCPI soon after it launched in January 2013. BPCI includes four broad models of care that link single, fixed payments to multiple related services provided to a patient during a defined time period. These episodes vary as to what they include, depending on which BPCI model an organization chooses.

In first three models payments are reconciled retrospectively, and in the fourth model payments are determined prospectively. Models 1 and 4 define the episode as acute care hospital stay only. Model 3 covers only post-acute care and Model 2 covers both acute and post-acute care. Dr. Usman said the most popular models are 2 and 3, with north of 600 participants and 800 participants, respectively.  

The payments for each "episode" of related services cover costs for hospitals, physicians, therapists and this includes professional and facility fees (Medicare Part A and B), according to Dr. Usman. "The hope is it will lead to improved quality and efficiency in the delivery of care."

The episodes are defined by an anchor admission to an acute care facility and all costs associated with that anchor DRG over a predetermined period of 30, 60 or 90 days. The BPCI program includes 181 DRGs collapsed into 48 clinical episodes, he said.

Who are the stakeholders?
Although not formal arms of the program, faciltators can be classifed as either risk-bearing or non-risk-bearing. Those entities that bear risk are "awardees" and "awardee conveners," Dr. Usman said.

Awardee conveners are parent companies, health systems or other organizations that wish to take risk and partner with other groups. Awardee conveners are responsible for risk of their own bundled payment patients and the bundled payment patients of their partners, regardless of where the patients receive care, Dr. Usman said. For example, EmCare works with an awardee convener called Remedy Partners that affiliates with hospitalist groups that are the episode initiators. In this example, Remedy Partners and EmCare bear risk, but the hospitalist groups do not.

In the case of single awardees, these organizations bear risk for themselves and initiate the episode of care, such as a single acute care hospital or physician group.  

"Facilitator conveners" are facilitators that partner with other organizations that take risk for the care redesign within the BPCI framework. These partner organizations are called "designated awardees" and "designated awardee conveners." For example, a facilitator convener could be a state hospital association or a venture capital company that does not take risk, but engages with a designated awardee like a hospital, or an awardee convener, such as a health system with five acute care hospitals, which would be the episode initiators.

Why consider this model?
"We see hospitals previously required to be concerned with inpatient cost and utilization now asked to be able to control costs after the patient leaves the building," said Dr. Strachan. Healthcare administrators and physicians have always managed to survive in a fee-for-service world by charging more or seeing more patients. Many who have been successful and continue to be successful in this environment may ask — why change?

One reason is because acute care patients are being discharged earlier and sicker than before. Dr. Strachan pointed to CDC data that showed the average length of stay for a patient age 65 and over in 1970 was 12 to 14 days. Over the last forty years, that LOS has dropped to just four to six days. "Although this is true of all patient populations, interestingly it is most dramatic for the older and sicker patients," he said.

Another reason to change is the huge gaps in care patients experience after they are discharged from the hospital. Approximately 50 percent of 30-day readmissions had no primary care physician follow-up, Dr. Strachan noted. With more hospitals owning and affiliating with physicians, they have the potential avenues to become more engaged with patients after they leave. "Getting the patient into the doctor's office is more critical than ever," he said.

Lastly, a reason to change is that the BPCI initiative is likely to grow in the near term, Dr. Strachan said. He expects 225 DRGs will be in the bundles in the next few years, with the potential to reach 540 DRGs by 2025.

When will it be mandatory?
"A recent Becker's article suggested we should have all seen this coming and I think that's probably true given the fact that CMS' track record has really been to do demonstration projects, validate that this change is going to save them money and then eventually mandate it," Dr. Strachan said. Bundles are now mandatory under the CJR program for hospitals in 67 market service areas, which marks a continuation of the trend toward value-based care.

HHS' timeline for tying Medicare payments to quality is short — and it's ahead of schedule, according to Dr. Strachan. It has already reached its goal of tying 30 percent of Medicare payments to quality and now it has set its sights on reaching 50 percent by 2018. Dr. Strachan said it is unlikely HHS will stop there.

"This is CMS' attempt to lead the charge in shifting risk to providers and making payments based on quality and outcomes," said Dr. Strachan. The voluntary BPCI program launched in 2013 and became mandatory for select providers under CJR in just three years. "We at least expect that bundles will be mandated eventually for medical diagnoses," Dr. Strachan said.

How should organizations approach this change?
First, Dr. Strachan said provider communication with patients is critical to success. "Interestingly one of the things we have noted is patients are not informed of this program," he said. Implementing the program really does require a lot of coaching and patient engagement because it will create highly visible changes in terms of what patients can expect during the inpatient stay, as well as during the post-acute recovery period. Similarly the program requires a level of nonmedical management as well. Many patients face social factors that impact their health, so identifying and addressing those are imperative to success.

Second, Dr. Strachan recommends providers proactively map patient progress across the episode time frame and identify deviation. If patients end up readmitted often after receiving care from a post acute partner, it is possible that facility might not be a good partner, he said. "Now that hospitals have penalties against them for readmissions, we need to start to identify the network of providers that will help us succeed."

To learn more, view the full webinar here or view a PDF of the slides here. View archived webinars here.

Editor's Note: This article was updated May 18 at 5:20 p.m. It incorrectly stated that there are two phases of the BPCI program. The program did initially have two phases, but the first phase ended Sept. 30, 2015 and now all participants are in "Phase 2." It also incorrectly categorized all Medicare Pioneer accountable care organizations as category four, population-based programs. While some Pioneer ACOs are category 4, they cannot all be classified in this category, so the example was removed. Finally, it previously stated there was a risk-bearing arm and a non-risk-bearing arm within the BPCI program. However, all participants in the program must bear risk, though some facilitators may not. The article has been adjusted to reflect this. We regret these errors.

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