New Medicare Bundled Payment Initiative
The Centers for Medicare and Medicaid Services (CMS) has announced a new voluntary Medicare bundled payment initiative known as “Bundled Payments for Care Improvement (BPCI) Advanced.” This alternative payment model is intended to “incentivize financial accountability, care redesign, data analysis and feedback, provider engagement, and patient engagement.” Although the new model does not permit post-acute care providers to serve as “episode initiators” (unlike the original BPCI model), it provides an opportunity for post-acute care providers to partner with acute care hospitals and physician practices to optimize quality and share savings and risk in specified clinical episodes.
Episode Initiators and Participants: Under BPCI Advanced, a clinical episode is triggered by an inpatient stay or an outpatient procedure and includes most Medicare Part A and Part B expenditures for 90 days post-discharge. Only Acute Care Hospitals (ACHs) and Physician Group Practices (PGPs) may serve as “Episode Initiators.” Episode Initiators that want to engage in the Model may serve as “Participants” and enter into a Participation Agreement with CMS, or they may opt to serve as downstream providers that partner with a Participant. There are two types of "Participants":
- Non-Convener Participants: A Non-Convener Participant is an Episode Initiator that enters into a Participation Agreement with CMS and bears financial risk only for itself.
- Convener Participants: A Convener Participant brings together multiple “Episode Initiators”—which must be either ACHs or PGPs—and potentially other downstream providers. It facilitates care coordination and bears and apportions financial risk among multiple providers. Any Medicare provider or supplier, and even entities not enrolled in Medicare, may serve as a Convener Participant.
While post-acute care providers may not serve as Episode Initiators or Non-Convener Participants, they may enter into agreements with Participants to coordinate care and improve outcomes while reducing costs. These agreements may also provide for shared savings and risk with the post-acute care providers. To the extent that a post-acute care provider is prepared to convene and coordinate Episode Initiators and bear risk, it could also, in theory, serve as a Convener Participant.
Risk Sharing: BPCI Advanced will require Participants to take on upside and downside financial risk from the outset. The Model will use a retrospective bundled payment approach – participating providers will receive their usual fee-for-service (FFS) payments, and the total FFS expenditures for the clinical episode will be retrospectively reconciled against a predetermined Target Price. The Target Price will be calculated by applying a discount to historic FFS expenditures for the specified clinical episode. As a result of the reconciliation, Participants will either have the opportunity to earn a Net Payment Reconciliation Amount (NPRA), to be paid by CMS, or may owe CMS a Repayment Amount. Participants may share the NPRA or the Repayment Amount with downstream providers through agreements with physicians and other clinicians or with post-acute care providers.
Clinical Episodes: BPCI Advanced will initially include 29 inpatient Clinical Episodes and three outpatient Clinical Episodes. Participants selected to participate in BPCI Advanced beginning on Oct. 1, 2018 must commit to be held accountable for the Clinical Episodes selected until Jan. 1, 2020.
Payment Waivers: CMS is offering BPCI Advanced Participants conditional waivers of certain Medicare payment rules, including the three-day stay requirement for Skilled Nursing Facility (SNF) coverage, geographic area requirements for telehealth coverage, and the direct supervision requirement for auxiliary personnel providing post-discharge home visit services.
To qualify for a waiver of the three-day stay requirement, a SNF must: (1) have an overall rating of three or more stars in the Nursing Home Five-Star Quality Rating System for at least seven of the 12 preceding months; and (2) be identified on the list of Qualified SNFs posted on the CMS website, based on the most recent rolling 12 months of SNF star rating data available that includes the date of the beneficiary’s admission to the SNF. CMS will post the list of SNFs that it determines are eligible to be Qualified SNFs on a quarterly basis here.
Freedom of Choice: The BPCI Advanced initiative will not affect beneficiaries’ freedom to choose their health care providers. Beneficiaries that receive services from an Episode Initiator need not select a post-acute care provider that is partnering with that Initiator for their clinical episode.
More Information: Applications to serve as a Participant in BPCI Advanced are due on March 12, 2018. More information and the RFA are available here.
Open Door Forums on the Model will be held on Jan. 30th from 12 to 1 pm and Feb. 15th from 12 to 1 pm. Registration is available here. Questions regarding the BPCI Advanced Model can be directed to BPCIAdvanced@cms.hhs.gov.
LeadingAge NY members interested in learning more about bundled payments and alternative payment arrangements are encouraged to view our free webinar series, available here.
Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383, ext. 124