Geisinger, Mayo Clinic and Dignity Health are among the nearly 1,300 entities that include more than 1,500 Medicare providers and suppliers signing up to take part in the Bundled Payment for Care Improvement-Advanced model, CMS announced Tuesday.
Results were seen as better than expected by some industry observers, perhaps in part due to a new opt-out option, new care episode options and rising pressure from non-traditional players into the healthcare space.
Clay Richards, CEO of naviHealth, told Healthcare Dive that the opt-out shows CMS listened to providers' concerns about creating a program with more flexibility. "We believe this opt-out option may have encouraged more participation in the program," he said.
The program qualifies as an advanced alternative payment model under MACRA, allowing providers to avoid reporting requirements in the Merit-Based Incentive Payment System.
BPCI-A will include 832 acute care hospitals and 715 physician group practices. The bundled payment model features 32 bundled clinical episodes: 29 inpatient (including major joint replacement of the lower extremity, congestive heart failure and sepsis) and three outpatient.
CMS Administrator Seema Verma said providers must have the ability to use a range of voluntary payment models to find those that work best for them. These kinds of programs will "accelerate the value-based transformation of America's healthcare system," she said in a statement.
Providers will get additional payments if expenditures for a beneficiary's episode of care is less than a spending target, which includes quality measures. If they exceed the goal, the provider must repay money to Medicare.
One factor in the number of sign-ups for BPCI-A is that providers can drop out of the program by March.
Building on the original
The latest iteration began Oct. 1 and runs until to Dec. 31, 2023, building on the Bundled Payments for Care Improvement initiative, which ended in September. CMS found that the earlier Models 2 and 3 reduced Medicare payments for most clinical episodes and maintained quality of care for Medicare beneficiaries.
However, the original BPCI also caused net losses for Medicare. CMS blamed implementation issues for the losses. The agency said it's optimistic that BPCI-A will result in net savings since the new payment model resolves the complaints BPCI received.
Also, unlike the first iteration, the new program includes outpatient episodes, additional clinical episodes and preliminary target prices before the start of each month.
BPCI-A is the Trump administration's first advanced APM. The current leadership prefers the voluntary model, rather than mandatory programs tried in the Obama administration.
Advocates for mandatory programs say they provide enough data to determine a program's effectiveness. However, voluntary program supporters say that some providers can't take on the added administrative burden and risk, so they should get to choose whether to participate in alternative payment models.
A recent JAMA report found that few post-acute care facilities took part in Model 3 of BPCI and nearly half dropped out. The lead author of the report, A. Jay Holmgren from the Harvard Business School, said organizations likely to participate in a bundled payment program are ones that can succeed.
Voluntary programs "aren't going to move the needle on the high-cost providers who can simply choose not to participate," Holmgren said at the time.
A mandatory payment program would avoid issues like not being able to evaluate the program adequately and adverse selection found in voluntary programs.
Nevertheless, with BPCI-A, CMS has pushed ahead with two-sided risk replacing fee-for-service. This is an attempt to require accountability for cost and quality and give providers a choice.
Why such a positive response?
Experts on bundled payments said there were multiple reasons for the interest in BPCI-A.
In addition to the opt-out, Richards said providers found success improving patient care and lowering the cost of care for 90-day episodes in BPCI. Hospital and health system partners with naviHealth saved more than 8%, which was about $2,000 per episode, in BPCI. That translated to more than $83 million. The partners also had reduced readmission rates and length of stay in post-acute care facilities, he said.
Keely Macmillan, general manager of BPCI-A for Archway Health, told Healthcare Dive that providers liked the new additions to the program. Macmillan pointed specifically to the three new outpatient bundles: cardiac, back and neck (except spinal fusion) and cardiac defibrillator outpatient procedures. Plus, more than 200 participants chose the only new inpatient bundle: disorders of the liver, Macmillan said.
"It proves what we’ve known all along — bundles are attractive and they work. Now it's time to drive improvement," MacMillan said.
Michael Abrams, managing director at Numerof & Associates, told Healthcare Dive that BPCI-A offers a range of choices. The model allows entities to pick an area where they're confident they can deliver care at "competitive cost and levels of quality."
Plus, new for-profit players in healthcare delivery are pushing providers more accepting of new payment models, Abrams said.
"The entry of for-profit players to the healthcare delivery industry — vertical consolidation by payers of providers, and the announcement by the Amazon, Berkshire Hathaway and J.P. Morgan healthcare partnership has convinced many resistors that change is inevitable, and if they don't reinvent themselves, others will make them irrelevant," he said.