BPCI Advanced: Ten key differences from original BPCI

What CMS bundled payment initiative are we on? It can be hard to keep track.

First there was the Bundled Payments for Care Improvement (“BPCI”) model, a voluntary bundled payment program beginning in 2013. Then in 2016, CMS introduced the CJR (Comprehensive Joint Replacement) bundled payment model, which was initially mandatory in 67 MSAs (now 34 excluding rural and low volume providers), and then voluntary Oncology Care model which also started in 2016. And now, CMS has released BPCI Advanced--a new voluntary bundled payment initiative with a new set of rules to learn.

While initial applications for BPCI Advanced were due March 12th, applicants have until August to submit final participation agreements, so there is time to analyze the claims data and targets that will be provided by CMS to make informed decisions. Participants will be able to select from the top 28 inpatient clinical episodes with the highest volumes and participation rates in the initial BPCI program, one new inpatient clinical episode, as well as three new outpatient bundles.

While BPCI Advanced will look familiar to those that have participated in the original BPCI program, there are ten important differences to be aware of when considering whether to pursue the new initiative:

1. All participants will be responsible for 90-day bundles. The option of choosing between 30, 60, or 90-day bundles has been eliminated. Since the majority of participants in the initial BPCI program selected 90-day bundles, most will be ready – though some participants will need to change care management models and data analytics/reporting frameworks to address the change.1

2. There are fewer exclusions.2 The Advanced initiative will include all Part A services resulting from the Anchor Stay or Anchor Procedure, plus post-acute care services including home care and hospice care (a new addition), during the Clinical Episode.

Part B services are included unless they are incurred during a hospital admission and/or readmission that is excluded from the bundle for that patient because it is in an unrelated MS-DRG (e.g. a broken leg following a heart attack admission). BPCI Advanced will not follow the original BPCI clinician-developed list of excluded services aimed at excluding unrelated claims. This may mean that participants will be responsible for certain costs that are harder for physicians to control.

3. Under BPCI Advanced, up to 10% of payments are at risk for quality performance. There was no quality component in original BPCI; quality was first introduced in CJR.

Participants’ performance on quality measures will be measured across all episodes and all downstream providers and suppliers. A raw score will be calculated for each quality measure at the clinical episode level, and rolled up to the episode initiator level. These scores will be scaled, benchmarked, and combined as a volume-weighted average to generate a composite score, and ultimately used to calculate final reconciliation payments.

All bundles will be subject to the All-cause Hospital Readmission measure and Advance Care Plan measure. Five other quality measures will only apply to select Clinical Episodes. These measures are among those used in the MIPS program; providers can select their MIPS measures so that they align with those for BPCI Advanced, if they want.

4. There is now only a single track for treatment of outliers. Previously under BPCI, participants could choose from three options for determining which patient episodes would be capped before inclusion in cost calculations based on their outlier status: Those at the 1st and 99th percentile of costs, the 5th and 95th percentile, or the 5th and 75th percentile.

In BPCI Advanced, only the 1st and 99th percentile apply; there is no other option. Episodes with costs above the nationally set 99th percentile or below the 1st percentile will be capped at those respective percentiles when calculating targets and payments.

This will pose a higher burden for participants previously in the more “forgiving” tracks, because fewer of their high cost episodes will now be treated as outliers.

5. Downside financial risk will be effective immediately. Under original BPCI, there was a phase-in period in which participants were sheltered from downside risk to allow participants to become familiar with the program. When downside risk was introduced in October 2015, many prior participants dropped out of the program.3

There is no transition period under BPCI Advanced; CMS appears to be assuming that participants will be familiar enough with how their particular hospital or practice interacts with the program that they are ready to be held to stricter standards from the get-go. Given the response to the introduction of downside risk in the initial BPCI program, this provision may reduce the attractiveness of BPCI Advanced.

6. Participants will get the same data, but less often. At the same time that CMS is adding nuances to these reconciliation amounts, they are providing less opportunity for participants to assess their performance. Under BPCI Advanced, reconciliation reports will only be sent bi-annually (only two performance periods per calendar year), rather than quarterly as under the previous program.4 Participants may want to get third party assistance to generate interim reports for their organization.

7. Target prices will be set prospectively. The original BPCI program provided target costs at reconciliation, based on historical spend and regional targets.5 CJR transitioned from primarily historical targets to entirely regional targets throughout the five-year participation period.

In BPCI advanced, CMS will provide prospective Preliminary Target Prices before the start of each year. Benchmarks will be calculated based on patient case-mix (adjusted later based on the actual case mix), spending relative to peers, and historic Medicare FFS expenditures. Target prices will be set at 3% below the benchmark, and participants will need to meet that target in order to share in savings. For many participants, this will be a higher level of required savings than that for initial BPCI (1% - 3.25% below benchmark prices, depending on the model)

8. BPCI Advanced will qualify as an Advanced APM through MACRA, providing physician group practices (PGPs) and hospitals with employed physicians with an incentive to participate. Participation in an Advanced APM may enable physicians to avoid Medicare payment adjustments under MIPS if they are able to meet, and continue meeting, the patient volume or revenue thresholds for Qualifying Participant Status. These thresholds will increase over time, making it increasingly difficult to achieve Advanced APM qualification.

9. Beneficiaries in a Next Generation or a Track 3 MSSP ACO will be excluded from BPCI Advanced. Participants will need to be aware of overlap with other APMs, particularly when analyzing Medicare data to identify target bundles. They will also have to pay more attention to the interplay between participants (hospitals vs. PGPs vs. other risk bearing entities).

10. Hospitals could find themselves losing more episodes to physician group practices (PGPs). In original BPCI, fewer than 20 percent of awardees were PGPs who applied to participate on their own and were accountable for episodes of care.6 Participants who joined BPCI in Phase I held precedence over those that joined in Phase II.

Under BPCI Advanced, PGPs always take precedence. Hospitals that joined BPCI in Phase I and previously benefitted from the contract timing component could potentially find PGPs accountable for episodes from which they previously benefitted. While this removes a source of risk for hospitals, it also removes the opportunity for incentive payments unless the hospital has a downstream agreement with the PGP, which is very unlikely.

Conclusion
With BPCI Advanced, CMS appears to be increasing risk for participants while reducing flexibility. The program requirements have been simplified with the elimination of alternative options, but not necessarily made easier. It remains to be seen how attractive this more standardized program will be to providers.

While participation in BPCI Advanced may be attractive as part of a value-based care strategy, hospitals and PGPs alike will have to be very careful in selecting the bundles in which they will participate, and will need to pay attention to the potential impact of ACO-BPCI Advanced overlap.

Given CMS demonstrated willingness to change ground rules in bundled payment programs, provider response to BPCI Advanced will likely result in further changes in future versions of the model.

Amanda Brown, MHA, Senior Associate, Veralon
Amanda’s focus is on strategic, business, and financial planning for healthcare organizations; modeling physician compensation arrangements; value-based payment and care delivery models; business valuations; and medical lease arrangements. Her clients have included health systems, academic medical centers, community hospitals, ACOs, and CINs.

Molly Johnson, MHSA, Manager, Veralon
Molly has more than 10 years of experience in the healthcare field, including work on clinical research and quality measurement systems. She advises healthcare organizations on strategic planning and physician engagement, clinical transformation, and valuation assessments.

Molly has authored several articles in national publications and has spoken at a number of events for regional health care organizations.

Amanda Kueh, Analyst, Veralon
Amanda assists Veralon clients with strategic and financial analysis, modeling, business valuation, and value-based payment arrangements.

1 Veralon analysis of Center for Medicare & Medicaid Innovation (CMS Innovation Center) BPCI Initiative Episode Analytic File. Available at: https://innovation.cms.gov/Files/x/bpcianalyticfile.xlsx
2 Center for Medicare & Medicaid Innovation (CMS Innovation Center) Comparison Table of Bundled Payment Models. Available at: https://innovation.cms.gov/Files/x/bpciadvanced-comparetable.pdf
3 Veralon analysis of Center for Medicare & Medicaid Innovation (CMS Innovation Center) BPCI Fact sheets, August 13, 2015, and April 18, 2016. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-08-13-html?DLPage=1&DLEntries=10&DLFilter=BPCI&DLSort=0&DLSortDir=descending and https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-04-18.html
4 Center for Medicare & Medicaid Innovation (CMS Innovation Center) BPCI Advanced Model Overview. January 2018. Available at: https://innovation.cms.gov/Files/slides/bpciadvanced-wc-modeloverview-slides.pdf
5 Center for Medicare & Medicaid Innovation (CMS Innovation Center) BPCI Advanced Model Overview. January 2018. Available at: https://innovation.cms.gov/Files/slides/bpciadvanced-wc-modeloverview-slides.pdf
6 Center for Medicare & Medicaid Innovation (CMS Innovation Center) BPCI Fact Sheet. August 13, 2015. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-08-13-2.html?DLPage=1&DLEntries=10&DLFilter=BPCI&DLSort=0&DLSortDir=descending

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