With the changes in place, the chance for rewards are high. The procedures outlined in the inpatient bundles account for more than 55%, or $70 billion, in annual Medicare spending, according to a January report from Archway Health, which assists providers with implementing bundled-payment initiatives. The model may end up saving the CMS as much as $2 billion and generate up to $15 billion of shared savings for providers.
However, there is some risk. Providers can only make money under BPCI Advanced if they keep total costs below a benchmark price, discounted by 3%. That's a lower target price than in the current BPCI program, which includes just a 2% discount. They will be at risk for up to 20% of costs that exceed the target price.
“This resetting of targets is a race to the bottom in the sense that there isn't enough to incentivize providers,” said Dr. Greg Sheff, chief medical officer at AccentCare, a BPCI Advanced convener and a home health and hospice provider. “I understand the desire for Medicare to push risk but at the same time you can't create a situation where there is not enough viable opportunity.”
Jessica Walradt, program manager of value-based care at Northwestern Medicine in the Chicago area has similar concerns and is helping to lead a group of academic medical centers to lobby the CMS to address the pay issues.
As hospitals improve the care they provide under the bundles, there should be a floor on how low target prices can reach, Walradt said. Without that, they may continue to decrease at an unsustainable rate. “If there's not a floor, then it's going to keep moving the goal posts to such an extent that there won't be sufficient room for providers to produce savings,” she said.
These concerns are causing providers, who previously experienced success in other Medicare bundled-payment models, to scale back or eliminate involvement in BPCI Advanced. “I think people are absolutely going to use the March off-ramp,” Walradt said.
A CMS spokesman did not return a request for comment on industry concerns.
Not everyone is worried about the target prices, with others noting that unlike the original BPCI, at least they know what their goals are. Under the last model, some providers were given initial goals, only for them to change later, according to Carter Paine, chief operating officer for naviHealth, a Brentwood, Tenn.-based convener company with more than 150 hospitals in BPCI Advanced.
Paine says the model is so attractive that around two-thirds of the hospitals his company is working with are entering into value-based care arrangements for the first time. “BPCI has been identified as this way of getting better clinical outcomes and make good money doing it,” Paine said.
Monterey, Calif.-based Montage Health is an example of a health system making its first foray into value-based care under BPCI Advanced.
Montage is the parent company of Community Hospital of the Monterey Peninsula and was drawn to the model after the CMS canceled a mandatory cardiac bundled-payment program that it had prepared to implement last year.
“We have been enhancing our ability to take on episodic risk, and the BPCI Advanced program was a natural opportunity to test those abilities,” said Matt Morgan, vice president of finance at Montage Health.
Others say they're pleased with improvements made since the launch of the original BPCI. Those include a universal standard over how many days constitutes an episode of care, a streamlined list of bundles to choose from, and recognition that more procedures are taking place in outpatient settings.