Bundled Payments for Care Improvement (BPCI) was an initiative created by the Center for Medicare and Medicaid Innovation (CMMI) to test the efficacy of several different episode-based payment models in producing higher quality, more coordinated health care at a lower cost to Medicare. BPCI was launched in 2013 concluded in 2018. The BPCI Advanced Model is a new iteration of the program and a continuation of efforts to implement episode-based payment models, also referred to as bundled payments.
In traditional fee-for-service (FFS) payment models, providers are paid for each individual service they furnish to patients for a single illness or course of treatment. Bundled payments provide a single, comprehensive payment that covers all services provided during a patient’s episode of care (services provided to a beneficiary with a medical condition within a specific time frame and across the continuum of care).
Medicare has been working towards reducing healthcare costs through episode-based payments for more than three decades, beginning with the introduction of the inpatient prospective payment system (IPPS) in 1983. BPCI was the most ambitious and wide-ranging bundled payment initiative CMS had ever attempted, and included hospitals, physician groups, post-acute facilities, and more. BPCI participants could choose from one of four models, and three of the four models gave participants the ability to further specify which of 48 different clinical episodes they would include.
Each of the four BPCI models had important differences in which portions of the continuum of care were included, as well as in how payments were made and discounts calculated. Specifically, each model varied in:
The overarching goal of bundled payment models, including BPCI, is to reduce the cost of care while preserving or improving outcomes. There is clear evidence that BPCI participants that included surgical procedures in their bundle have achieved both cost and quality improvements, but more progress needs to be made in bundles focused on chronic conditions. Timing may be an issue, as hospitalizations correlate well as the beginning of a surgery-involved episode, but are unlikely to align with the onset of a chronic medical condition. In order to thrive under bundles for chronic conditions, hospitals will have to take a more proactive approach and tackle non-clinical issues that feed into chronic conditions, including social determinants, though most currently lack the mechanisms to do so.
The Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model is the new iteration of BPCI. The new model aims to build on the successes of BPCI, while making modifications to correct deficiencies in the old program. Some key differences include:
The opportunities presented by BPCI Advanced will allow participants to progress in terms of value-based care, but will also present increased risk and less flexibility than the original program. It remains to be seen whether the updates to the BPCI model will produce additional benefits, but it’s clear that CMS will continue to drive towards value-based care with episode-based reimbursement models.
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