Value of CMS' voluntary bundled-payment program remains unclear

For the third consecutive year, researchers cannot determine whether a voluntary Medicare bundled-pay initiative actually cut costs and improved care.

In a CMS-funded analysis released Oct. 26, the Lewin Group said providers were starting to reap the benefits of the Bundled Payments for Care Improvement initiative, but it's still unclear whether the savings and improved quality actually stemmed from the program.

Under BPCI, providers can participate in four broadly defined models of care that pay them for multiple services during an episode of care. Participants can withdraw from the experiment at any time, and 27 BPCI hospitals had exited the initiative by the third quarter of 2015, according to Lewin's third annual report. Many cited administrative burdens as the reason for their departure, the group found.

The report found most surveyed participants engaged in BPCI for three quarters, which Lewin said isn't enough time to see results on payments and quality from care redesign.

"The lack of consistent or significant results may be partly due to the short average tenure of participants in the initiative," according to the report.

The group looked at BPCI data from late 2013 to fall 2015, and found that Medicare payments for joint replacements decreased an average of $1,273, or 4.5%, per case. Congestive heart failure spending also dropped by an average of $970 per case, or 3.6% lower than the baseline.

But even those successes came with an asterisk. BPCI providers often participated in multiple value-based pay initiatives, so researchers couldn't tell whether BPCI led to the savings.

"Because we are measuring multiple outcomes across the range of model, participant, and episode combinations, by chance alone some results will appear significant, although in reality, they are not true effects of the initiative," the report stated.

The results are disappointing, as BPCI is one of the longest-running programs to transition Medicare from a fee-for-service system to one that focuses on value and quality.

"We still don't know the answer to whether bundled payments improve care," said James Scott, CEO of Applied Policy, a reimbursement consulting firm.

The report comes at a time when the Trump administration wants to focus on voluntary pay models and scale back or cancel mandatory ones. The Lewin Group's findings highlight the downside of a voluntary value-based approach, policy insiders said.

"With voluntary models you lose the ability to draw conclusions if results are applicable across all providers," said Cristina Boccuti, associate director of the program on Medicare policy at the Kaiser Family Foundation.

Despite the BPCI report's inconclusive findings, hospital and policy insiders hope the Trump administration doesn't reverse course and embrace mandatory models as the Obama administration did. Instead it should use the document as a road map to develop better voluntary models.

"Hospitals should not be forced to bear the expense of participation in these complicated programs if they do not believe they will benefit patients," said Joanna Hiatt Kim, vice president of payment policy at the American Hospital Association.

Keeping models voluntary allows safety-net hospitals to pursue value-based care without financial risk.

"There is a real appetite in the rural space to be innovative," said Brock Slabach, senior vice president of member services at the National Rural Health Association. "Unfortunately, due to their size and lack of capital, they don't have the ability to make a lot of mistakes."

BPCI allowed providers to shape participation in the program and choose which clinical episodes to test in the model. All in all, there were 48 episodes that could have fallen under BPCI's four tracks.

That may have been too many options, and tracking so many ailments at once would have hampered researchers' ability to say if the BPCI model worked, according to Scott.

Many BPCI participants chose to focus on joint or cardiac procedures, and an updated BPCI program could target these episodes of care because hospitals and other providers see them as a savings generator.

"Use these results to fine-tune the program so that more people can participate and be successful in the next iteration," said Darcie Hurteau, director at the DataGen Group, a healthcare data analytics and policy firm.