You are here

Providers Quit Bundled Payment Program as Risk Increases

CMS changes the rules

Many of the providers that entered the Centers for Medicare & Medicaid Services’ (CMS) voluntary Bundled Payment for Care Improvement (BPCI) program in the initial phase are reluctant to continue now that the CMS has increased the downside risk, according to a new analysis by Avalere Health.

Whereas the BPCI program’s first phase gave providers free access to new data with no commitment required, beginning in October 2015, the CMS has required all participants to accept downside risk for all program bundles. The current participants represent only about 25% of the providers that initially expressed interest in the program, according to the analysis. The decrease in participation raises questions about whether the CMS will continue with voluntary demonstrations, such as BPCI, or will move into mandatory programs, such as the Comprehensive Care for Joint Replacement program.

“Strong participation in a voluntary program shows providers’ willingness to test new alternative payment models,” said Josh Seidman, senior vice president of Avalere. “However, the fact that many providers that entered the program decided it’s not currently in their financial interest to accept downside risk may cause CMS to consider additional mandatory programs in the future.”

BPCI is a voluntary program in which hospitals, physician group practices, and post-acute care providers accept clinical and financial risk for patients over specified time frames. Skilled nursing facilities and hospitals are the most common provider types participating, with 47% and 27% of all participants, respectively. Episodes are 30, 60, or 90 days long, and providers are responsible for all clinical care provided to the patient over those time frames. Before October 2015, participants could test conditions but not be responsible for spending above the target price. As participants, providers received access to Medicare claims data and target prices, which allowed them to assess their opportunity under the program. With the new requirement for downside risk, many providers determined that the BPCI program was not beneficial for them, the analysis says.

The CMS allows participating providers to select episodes to test from a group of 48 clinical conditions ranging from procedures (such as joint replacements) to medical conditions (such as sepsis). On average, each participant tests episodes for nine unique clinical conditions; however, there is considerable variation among participants. While many providers are testing only a few episodes, almost 15% of participants are testing more than 20 conditions. The four most commonly tested conditions are lower-extremity joint replacement, pneumonia, chronic obstructive pulmonary disease, and congestive heart failure. These top conditions represent about 18% of the 14,000 bundles in the demonstration. 

“The BPCI program serves as an important foundation on which CMS can build toward its goal of shifting 50 percent of Medicare fee-for-service payments to alternative payment models by 2018,” said Erica Breese, a manager at Avalere.

Source: Avalere Health; December 14, 2015.

Recent Headlines

WHO to meet tomorrow to decide on international public heath emergency declaration
Study of posted prices finds wild variations and missing data
Potential contamination could lead to supply chain disruptions
Despite older, sicker patients, mortality rate fell by a third in 10 years
Study finds fewer than half of trials followed the law
Declining lung cancer mortality helped fuel the progress
Kinase inhibitor targets tumors with a PDGFRA exon 18 mutation
Delayed surgery reduces benefits; premature surgery raises risks
Mortality nearly doubled when patients stopped using their drugs