CMS offers bundled payment participants two-year extension

Providers in Medicare's Bundled Payments for Care Improvement initiative (BPCI) are invited to extend their participation for an additional two years. The CMS said the extension will give the agency more time to evaluate the effectiveness of the initiative.

BPCI is composed of four broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care.

The voluntary demonstration program, underway since 2013, is testing the payment arrangement for 48 conditions, including stroke, renal failure, heart attack and diabetes.

The initiative is part of a broader effort by the administration to overhaul the way Medicare pays providers and move away from the traditional fee-for-service model. Other alternative payment models include accountable care organizations and medical homes. Last year, the CMS announced a goal of having 50% of payments tied to quality- or value-based payment models by 2018.

Each of the four models in the BPCI involves a different type of care that may be provided to Medicare beneficiaries who have been hospitalized. Models 1 and 4 focus on care provided during an inpatient hospital stay, while models 2 and 3 include a period of post-acute care, the length of which is determined by the participant.

In Model 1, all Medicare patients admitted to a participating hospital are included.

Nearly all of the programs participants, however, are in models 2, 3 and 4, which allow them to choose to include patients with only certain diagnoses from a list of 48 episodes. The CMS is giving these organizations the ability to extend their participation through Sept. 30, 2018. The agreements had been scheduled to end Sept. 30 of this year.

"By extending their participation, CMS will be able to provide a more robust and rigorous evaluation of the initiative and determine whether the efforts of bundling payments are successful in providing better care while spending healthcare dollars more wisely," CMS Acting Principal Deputy Administrator Dr. Patrick Conway wrote in a blog post Monday announcing the extension.

As of April 1, 2016, there were 1,522 organizations participating in the BPCI initiative, including acute-care hospitals, physician group practices, home health agencies, inpatient rehabilitation facilities, long-term-care hospitals, and skilled-nursing facilities.

BPCI has received a mixed reaction from the industry since its launch in 2013. Physicians have complained that their payments under the program don't take into account the risk pool of patients being seen, said Francois de Brantes, executive director of Health Care Incentives Improvement Institute, or HCI3.

Other participants have expressed frustration that, over the course of the program, the CMS has changed the goals providers are asked to meet, said de Brantes. HCI3 is a not-for-profit organization dedicated to developing and testing incentive and payment programs aimed at improving healthcare affordability and quality.

In February, hospital and behavioral-health company Universal Health Services announced it was considering exiting the program because it has struggled to get useful data from federal officials. It has 25 acute-care hospitals involved in the BPCI.

It's likely that most participating providers will take the CMS up on its offer to extend, as the ones unhappy with the initiative have already exited the program and those that remain are seeing some sort of benefit, de Brantes said.


Virgil Dickson

Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Modern Healthcare in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor's degree from DePaul University in 2007.

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