Providers ramp up for bundled payments under Affordable Care Act

Providers ramp up for bundled payments under Affordable Care Act

por John W. Mitchell, Senior Correspondent | December 16, 2015
Business Affairs Population Health Primary Care Risk Management
In its quest to evolve 50 percent of fee-for-service payments to alternative payments models by 2018, CMS has moved to The Bundled Payments for Care Improvement Initiative (BPCI). The agency recently announced that all 1,500 voluntary participants — ranging from hospitals and doctors to home health agencies and rehabilitation facilities — have taken the plunge to risk-sharing models for many common inpatient illnesses and procedures.

“On October 1, CMS required all BPCI participants to transition to the full risk-bearing stage of the programs,” Josh Seidman, senior vice president with Avalere told HCB News. Under the model, providers make money if they deliver care for below a set historical price for a procedure, such as simple pneumonia and respiratory infections.

“CMS has set the target price two, three percent below the historical cost for the episode,” he explained. According to CMS, the providers must also meet quality metrics to improve outcomes to receive payments.

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Seidman noted that the current BPCI participating providers represent only 25 percent who initially expressed interest in the program. He said the program demonstrates willingness by providers to consider new payment models, but the programs could become mandatory. CMS recently made such a decision with the recent announcement of the mandatory Comprehensive Care for Joint Replacement payment model in most major cities.

“Strong participation in a voluntary program shows providers’ willingness to test new alternative payment models,” said Seidman. “However, the fact that many providers that entered the (initial) program decided it’s not currently in their financial interest to accept downside risk may cause CMS to consider additional mandatory programs in the future.”

According to Seidman, CMS allows the participating providers to select from 48 clinical conditions. The top four selected conditions are: major joint replacement; simple pneumonia and respiratory infections; congestive heart failure; and pulmonary disorders such as bronchitis and asthma. He said that while many providers are testing only a few conditions, almost 15 percent are testing more than 20 conditions.

“We are seeing BPCI participants implement a variety of strategies. Hospitals are attempting to reduce length of stay and discharge patients home where medically appropriate,” he said. “Skilled nursing facilities are pursuing partnerships with both upstream and downstream referral partners to better track and monitor patients.”

In a BPCI Fact Sheet released by CMS, the agency noted that the program is designed to move away from separate payments for each incidence of care – known as fee-for-service. According to CMS, fee-for-service “can result in fragmented care with minimal coordination” and “rewards the quantity of service by providers rather than the quality of care furnished.” BPCI was created by the Affordable Care Act (ACA) to test new payment and delivery of care solutions to control costs and improve quality of care.

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