Bundled Payments for Care Improvement Initiative
The Bundled Payments for Care Improvement (BPCI) initiative tests four different models based on episodes of care that involve an inpatient hospital stay.
What’s the Issue?
The Affordable Care Act (ACA) gave the Centers for Medicare and Medicaid Services (CMS) broad authority to test out new payment models that have the potential to reduce Medicare spending, as long as those models preserve or enhance the quality of care provided to beneficiaries. Sylvia Mathews Burwell, secretary for health and human services, has committed to tying 50 percent of Medicare payments to these new alternative payment models by the end of 2018.
The Center for Medicare and Medicaid Innovation (CMMI) within CMS is testing a variety of new approaches, including paying providers for episodes of care instead of for each service provided. The Bundled Payments for Care Improvement (BPCI) initiative tests four different models based on episodes of care that involve an inpatient hospital stay. One model focuses on care provided during the hospital stay, while the other three models include postacute care provided once the patient is released from the hospital. CMS hopes that by paying for related care as part of a broad payment bundle, different providers that treat a patient during a single episode will have incentives to better coordinate care, avoid unnecessary services, and improve patient health. Most of the savings are expected to come from reducing spending on physician services during the hospital stay and efficiencies in providing postacute care.
This brief describes the different models being tested and CMS’s experience with the project to date.
Both CMS and providers are continuing to gain experience with and learn from the BPCI initiative. All four models have projects underway that will continue into 2016.
Congress gave CMS the authority to expand use of a tested model without requiring a change in law if CMS finds that the model reduces spending without reducing the quality of care or improves the quality of care without increasing spending. CMS has not proposed to expand the use of any BPCI initiative model at this time but could do so in the future.
However, CMS is proposing to expand testing of concepts used in the BPCI initiative on a non-voluntary basis. Under its comprehensive care for joint replacement (CCJR) model, hospitals in the sixty-seven metropolitan areas selected for the model will receive a bundled payment for the inpatient stay and ninety days of postacute care.
While the structure of the CCJR model is similar to model 2, there are significant differences. Hospitals in selected areas will be required to participate in the CCJR model (unless the hospital is already participating in certain tracks of the BPCI initiative), and hospitals in other areas will not be able to participate. All lower extremity joint replacement cases at hospitals within those geographic areas will receive the bundled payment; under the BPCI initiative, cases could be limited to those from specific episode initiators, such as only those physician group practices with which the hospital has a relationship. CMS will implement this new payment model on April 1, 2016.
CMS is also testing bundled payments for care that does not include an inpatient hospital stay. Under its oncology care model, CMS is creating bundled payments for six-month episodes that start with the first claim for chemotherapy. This model is expected to start in spring 2016.