Skip to main content

New Version of Bundled Payments Will Have Broader Appeal

Analysis  |  By Gregory A. Freeman  
   December 04, 2017

CMS may appear to be slowing the path to value-based care by ditching some bundled payment models, but a new program could revitalize the effort. The new initiative will draw in more physicians who were not attracted to the earlier versions.

The CMS decision to eliminate two mandatory bundled-payment models and reduce participation in a third should not be taken as a sign that value-based care has lost momentum. To the contrary, the upcoming Bundled Payments for Care Improvement (BPCI) Initiative will actually speed up this shift and be a catalyst to end the fee-for-service model altogether, one analyst says.

CMS recently finalized plans to cancel mandatory hip fracture and cardiac bundled payment models, as well as the Episode Payment Models and Cardiac Rehabilitation Incentive Payment Model that were due to go into effect on January 1, 2018. The rule also reduces the geographic areas required to participate in the Comprehensive Care for Joint Replacement Model from 67 to 34.

CMS also published its third annual evaluation of BPCI Models 2 to 4, which found that during the first two years of the BPCI model, Medicare payments for major joint replacement of the lower extremity fell $1,273. However, there were few statistically significant quality changes during the first two years of the BPCI initiative under Model 2.

These moves raise questions about whether the shift to value-based payments will continue at the pace of recent years, but the imminent release of the next incarnation of BPCI should increase momentum, says Keely Macmillan, general manager of BPCI with Archway Health, which assists healthcare providers with bundled payments.

The original BPCI program will end in September 2018 and CMS is expected to announce plans for the next phase any day now, she notes.

“The BPCI Advanced program will be a major catalyst for the adoption of value-based payments because it will bring so many new participants to the market,” Macmillan says. “There is a lot of pent up demand because at first physicians weren’t ready for BCPI and now it’s been several years. There is a better understanding of the program and a recognition of the outside revenue that can be earned.”

Hospitals have been the primary focus for value-based payments but the Medicare Access and CHIP Reauthorization Act (MACRA) is compelling physicians to consider value-based payments more than ever before, she says. For many specialists, BPCI Advanced will be the only way to quality for the advanced Alternative Payment Model (APM) track under MACRA and avoid the less desirable ranking mechanism of the Merit-based Incentive Payment System (MIPS), Macmillan explains.

CMS Administrator Seema Verma has been vocal about prioritizing physician-driven APMs, Macmillan notes.

 “CMS has been under a lot of pressure to offer a way for specialists to participate in advance APMs in Medicare,” she says. “MACRA adds a new element that was not in the market the first time BPCI was announced.”

The next generation of the program will have outpatient bundles, which will draw more participants because the first iterations of BPCI were all focused on inpatient admissions, Macmillan says.

“The new BPCI will generally be more sophisticated because CMS has learned a lot. The target pricing and risk adjustment methodology will be more sophisticated, and it will involve a quality adjustment for shared savings,” she says. “The outpatient bundles and the increased sophistication of the program will combine to pull in many more participants who have been waiting for BPCI to take a form that works for them and promises them a successful transition to value-based care.”

The announcement of the rule will be accompanied by a time period in which healthcare providers and hospitals can state their intentions to participate in the new BPCI, and Macmillan expects the response to be swift.

“You’ll at least see a lot of response from physicians and hospitals that want to look at the data the same way CMS will and see what the opportunities are,” Macmillan says. “The industry has not given up on bundling for value-based care by a long shot. They’re looking for a way to make it work for them, and BPCI 2.0 could be the path a lot of them will want to take.”

Gregory A. Freeman is a contributing writer for HealthLeaders.


Get the latest on healthcare leadership in your inbox.