Analyses of CMS data on Medicare's largest bundled-payment demonstration suggest providers may have reached the limit of their ability to streamline joint replacement procedures.
While the joint replacement bundle for hips and knees has been one of the most popular of Medicare's Bundled Payment for Care Improvement Advanced program, providers are shifting to bundles for medical and chronic conditions like sepsis and chronic obstructive pulmonary disease.
On total joints, participants already may have done all they could to make care more cost-effective by reducing use of post-acute skilled nursing care, said Dr. Amol Navathe, assistant professor of health policy at University of Pennsylvania who studies bundled payment models.
For physician groups, the bundle for back and neck except spinal fusion replaced total joint replacement of the hip and knee as the mostly commonly selected episode—with 34% choosing back and neck, while selection of the joint replacement bundle plunged to 22% from 77%.
The target pricing on the joint replacement bundle often is moving lower, making it harder for providers to be financially successful with it, said Keely Macmillan, senior vice president of policy for Archway Health.
In addition, the CMS has changed the rules to allow traditional Medicare to pay for hip and knee replacements in outpatient settings, which may reduce the volume and increase the risk profile for patients in the BPCI Advanced program.
Outpatient hip surgeries are not eligible for BPCI Advanced.
Demonstration participation has strengthened even though its most popular bundles don't have the same allure. For the third model year of the BPCI Advanced program, 2,039 hospitals and physician groups signed up by Dec. 1, 2019. The number of participating hospitals grew by 41%, to 1,010, while the number of physician groups rose by 77%, to 1,029, according to Archway Health.
Nearly 80% of providers who joined the program in the first two years decided to stick it out for the third year.
The total number of clinical episodes selected by all participants increased 65%, to 12,719, though the average number of episodes selected per provided remained relatively flat at 6.5, according to Archway. Providers could choose from 33 inpatient and four outpatient conditions.
That's good news for the federal government's most ambitious bundled-payment experiment, a five-year demonstration that ends in 2023. The program, started in October 2018, is widely seen as one of the most promising approaches to accelerating the nation's transition to value-based payment.
Expensive medical and chronic conditions still show the promise of savings in the third year of the program. Back and neck, sepsis and percutaneous coronary intervention episodes of care saw the largest increases in participation, according to Archway.
The CMS increased the target price for the sepsis bundle in many parts of the country, Macmillan said.
Sepsis surpassed congestive heart failure as the bundled episode of care most frequently selected by hospitals—with 75% choosing sepsis, while selection of heart failure plummeted to 31% from 61%, according to an analysis by Singletrack Analytics.
Participating academic medical centers see opportunities to improve care and achieve savings with sepsis patients through earlier identification of their condition, said Dr. Keith Horvath, senior director of clinical transformation for the Association of American Medical Colleges.