Medicare's bundled-payment initiatives are designed to reduce costs and improve care for beneficiaries. But the first analysis (PDF) of whether the alternative payment model is succeeding provides few definitive findings.
“We are limited in our ability to draw conclusions about the effects of (the Bundled Payments for Care Improvement program) because of the small sample sizes and short time-frames,” reads the report, which was drafted by the Lewin Group. “As a result, this first Annual Report may be better thought of as the outline for future analyses as more participants enter BPCI and gain greater experiences under the initiative.”
The CMS Innovation Center's bundled payment initiatives are part of a broader effort by the administration to overhaul the way that providers are paid for treating Medicare beneficiaries and move away from the traditional fee-for-service model. Other alternative payment models include accountable care organizations and medical homes. In January, the CMS announced a goal of having 50% of payments tied to quality- or value-based payment models by 2018.
There are three bundled payment initiatives that were scrutinized for the annual report. Under each model, an episode of care is defined as an inpatient hospitalization for one of 48 eligible clinical episodes.
The initial group of participants were either hospitals or physician group practices that began in Oct. 2013 with 15 awardees. That group expanded to 93 participants for the first quarter of 2014. The report found that those providers were more likely to be not-for-profit organizations operating in competitive markets. Nearly 90% of providers participating in the Medicare payment program were not-for-profit entities, compared with 60% of non-participants. In addition, the average occupancy rate for participating providers was 61%, compared with 49% for other providers.
The study, the first of five annual reports, also found a significant difference in the share of patients enrolled in both Medicare and Medicaid. Among providers participating in the bundled-payment initiative, just 14% of their patients were so-called dual eligibles, compared with 25% for non-participants.
The study found some initial evidence that participating providers might be able to reduce costs for the Medicare program. For example, providers participating in the bundled payments program were less likely to refer patients to skilled nursing facilities and more likely to rely on home health agencies, which don't cost as much.
But the authors of the report were reluctant to attribute such changes to participation in the payment program. "It could be the case, for example, that providers with improving outcomes were more likely to sign up for the program, inducing a spurious positive correlation between BPCI participation and outcomes," the report noted.
The most common clinical episode paid for with bundled payments was joint replacement, which accounted for just over 40% of procedures during the first two quarters that the program was in place. Other common clinical episodes in the payment initiatives were congestive heart failure, pulmonary disease and pneumonia.
Participation in the bundled payments initiatives will continue to expand. As of Aug. 5, 2014, more than 2,000 providers had applied to participate in the program.
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