What you need to know to succeed at BPCI-A: Secrets from the bundled payments front line

Over the next few weeks, health systems, hospitals and doctors are contemplating whether they will move forward with the Centers for Medicare and Medicaid Services’ Bundled Payments for Care Improvement—Advanced program.

Having implemented one of the first-ever BP programs at Exempla St. Joseph Hospital, then rolled out new payment models at more than 200 organizations with employers, commercial payers, and public payers over the last 10 years and having served as a CMS BP program reviewer, I can offer two key pieces of advice:

1. Do it. Those who have already rolled out bundles are going to be expanding them because of their progress in improving quality and outcomes while reducing costs. For those providers new to bundles, CMS has added a compelling enticement to this latest program with a ”no risk, try before you buy” option that allows participants to drop out before they encounter downside financial risk.

If that isn’t enough incentive, here’s more: If you don’t do it, you will fall behind on the path to becoming a high value provider. Bundles are a cornerstone of any accountable care organization or other value-based care delivery model. Period.

2. Pick your bundles carefully. Nearly 25% of ACOs dropped out of the previous CMMI BP programs in large part due to flawed strategies.

What many organizations do not understand is how important early successes are. I never recommend any bundle if I am uncertain about the outcome because doctors don’t like to fail, clinically or financially. Early wins with new payment models generate the necessary momentum and knowledge for building on that success.

When choosing bundles, my no-go zone includes:

Small populations. If you don’t have enough of a sample size to distribute the risk, everyone loses. A population of no less than 150 patients per year is a good threshold for ensuring adequate consideration of the actuarial risk. For a chronic disease, the number of cases may need to be higher.

Gaps in clinical performance. Given the retrospective nature of data, gaps in quality performance take 12–18 months to fix, whether the root cause is process- or outcome- related. Even if you have resolved your high readmission rates in a particular population, you must plan for payers to not see the improvement for up to a year or more. To avoid this issue, put the population on an evidence-based protocol and validate that the gap in clinical performance is a thing of the past and only then take risk.

Low price point. Taking clinical and financial risk will require investments in care redesign, telehealth, care navigation, claims analysis and reporting and more. But providing a better clinical outcome AND a better cost outcome is not a race to the bottom. It requires moving beyond historical cost-shifting approaches to a willingness to pay for and value the importance of gold-standard care redesign and care management. If payers aren’t willing to pay for care management, most chronic disease DRGs, for example, will likely be too low a price point for a bundle and would be better managed in a per member per month (PMPM) construct.

Unnecessary actuarial risk. Most executives and clinicians believe that they can improve their historical performance and do better than their competitors. But if the population is losing money today, go fix that problem first. Make sure that you are stacking the deck in your favor at the outset as much as possible. You can always scale up complexity once you have a foundation of success from which to build on.

Lack of physician support. Payment reform is, in essence, care delivery reform. It doesn’t matter much where you start but that you start with a strategy that physicians feel a part of and can lead. New payment models should be a tool to further integrate clinically with your medical staff. The work necessary to drive the clinical redesign is real and requires physician leadership, enthusiasm, and engagement.

Taking on risk that you aren’t clinically, operationally, actuarially and culturally ready to tackle is not the formula for delivering greater healthcare value. The key to succeeding with the latest CMS BP program depends on following the evidence and setting up physicians, staff and patients to win at the outset.

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