To Bundle Or Not To Bundle?

In August of 2017, CMS announced the cancellation of a proposed Cardiac Care Bundled Payment model as well as reversing course on a proposal to expand the Comprehensive Joint Replacement Bundled Payment model. Participation in both payment models would have been mandatory for certain providers in specified markets.

In January 2018, to considerable fanfare, CMS announced the creation of “Bundled Payments for Care Improvement Advanced” (BPCI Advanced). As of the publication date of this article, CMS will be distributing pricing to BPCI Advanced program applicants and, per the model program timeline, will move to execute participation agreements by the end of August 2018. This voluntary model is proposed to go live on October 1, 2018, with the first determination date for program payments on March 31, 2019. BPCI Advanced will be treated as an Advanced Alternate Payment Model under the CMS Quality Payment Program. The following is an introduction to some of the key components of BPCI Advanced.

First, acute care hospitals and physician groups may participate as “covener” or “non-covener” participants. The former will agree to coordinate care among patients throughout a 90-day “clinical episode,” which commences on the date of inpatient discharge or on the date of a covered outpatient procedure. Coveners will also assume some financial risk for the entire episode of care, whereas a non-covener participant bears no financial risk for care provided by other providers. Providers other than acute care hospitals and physician groups will be permitted to participate only as non-coveners.

Secondly, BPCI Advanced includes 29 distinct inpatient Medicare Severity-Diagnosis Related Group (MS-DRG) codes and three types of outpatient surgical encounters. A BPCI Advanced clinical episode is triggered by submission of a Medicare fee-for-service program claim by an “episode initiator.”

Thirdly, subject to certain exclusions, the clinical episode will generally include all physician services; inpatient, outpatient, long-term care, and inpatient rehab hospital services; hospital readmissions; skilled nursing; home health; clinical lab services; durable medical equipment; Part B drugs; and hospice services relating to the MS-DRG or the event that triggered the outpatient surgery.

Lastly, the payment reconciliation model is extremely complex, but is largely predicated on performance against select process-and-outcome quality measures and by comparing the aggregate costs of care provided during a clinical episode against an established target.

As an interesting backdrop, the Trump administration under former HHS Secretary Price, has taken aim at rolling back mandatory bundled payment initiatives, whereas Alex Azar, confirmed in January to fill that important role, has expressed support for alternate and bundled payment models. So, to bundle or not to bundle? Stay tuned for further developments.

Sharon Parsley

Director of Content Development