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Medicare Announces New Bundled Payments

February 5, 2018

The Centers for Medicare and Medicaid Services (CMS) announced on January 9, 2018 that it is creating the voluntary Bundled Payments for Care Improvement Advanced (BPCI Advanced) demonstration that requires participants to take on financial risk. In addition, the program, which includes outpatient and inpatient episodes of care, would count as an Advanced APM for MACRA (Medicare’s physician payment program) for a 5 percent provider bonus.

Unfortunately, the proposal could have a harmful effect on markets that are affected by the Comprehensive Center for Joint Replacement (CJR) mandate. Those markets may not be able to participate in BPCI Advanced. Click here for full information.

TOA’s April 13-14, 2018 Annual Conference in Fort Worth will include a panel discussion on Medicare’s new bundled payment program.

Medicare-certified acute care hospitals and physician group practices (PGPs) may participate as either Convener Participants or Non-Convener Participants. The application ends on March 12, 2018. The next application period will not occur until January 1, 2020.

Some of the new program’s highlights include:

  • It will include a single payment and risk track. The original BPCI included four models.
  • The program begins on October 1, 2018 and runs through 2023, and it will include all participants to take on downside financial risk. Applications must be submitted by March 12, 2018.
  • For those who miss the initial application, a second application opportunity will open in 2020.
  • BPCI Advanced relies on a retrospective approach. CMS will provide a preliminary target price in advance of the first performance period of each model year prior to calculating a final target price retrospectively based on patient case-mix. The “CMS Discount” will subtract 3 percent from the benchmark that is based on historical fee-for-service spending.
  • As a result of BPCI Advanced not being a shared-savings initiative, participants can participate in this model and accountable care organizations (ACOs).
  • The episodes will last 90 days.
  • BPCI Advanced will qualify as an Advanced APM under MACRA beginning on October 1, 2018, which is the performance period’s effective date. On January 1, 2019, BPCI Advanced participation will result in a 5 percent APM incentive payment and the Qualifying APM Participant (QP) determination.

The CMS Innovation Center will hold a Q&A Open Forum on Tuesday, January 30, 2018 from 11 a.m. – 12 p.m. CST. This event is open to those who are interested in learning more about the model and how to apply. Please register in advance here.

Click here to learn more about the model.

Thirty-two types of clinical episodes will be included. Three outpatient episodes have been added to the inpatient episodes in the earlier BPCI model. Most of the episodes are found in the original BPCI model. However, an episode related to liver disorders is new.

For a list of the 29 Inpatient Clinical Episodes, please see below:

  • Disorders of the liver excluding malignancy, cirrhosis, alcoholic hepatitis *
    *(New episode added to BPCI Advanced)
  • Acute myocardial infarction
  • Back & neck except spinal fusion
  • Cardiac arrhythmia
  • Cardiac defibrillator
  • Cardiac valve
  • Cellulitis
  • Cervical spinal fusion
  • COPD, bronchitis, asthma
  • Combined anterior posterior spinal fusion
  • Congestive heart failure
  • Coronary artery bypass graft
  • Double joint replacement of the lower extremity
  • Fractures of the femur and hip or pelvis
  • Gastrointestinal hemorrhage
  • Gastrointestinal obstruction
  • Hip & femur procedures except major joint
  • Lower extremity/humerus procedure except hip, foot, femur
  • Major bowel procedure
  • Major joint replacement of the lower extremity
  • Major joint replacement of the upper extremity
  • Pacemaker
  • Percutaneous coronary intervention
  • Renal failure
  • Sepsis
  • Simple pneumonia and respiratory infections
  • Spinal fusion (non-cervical)
  • Stroke
  • Urinary tract infection

For a list of the 3 Outpatient Clinical Episodes, please see below:

  • Percutaneous Coronary Intervention (PCI)
  • Cardiac Defibrillator
  • Back & Neck except Spinal Fusion

Key Dates
March 12, 2018 – Application portal closes.

May 2018 – CMS distributes target prices.

June 2018 – CMS offers participant agreements.

August 2018 – Signed participant agreements are due.

October 1, 2018 – Model goes live.

March 31, 2019 – First date for Advanced Alternative Payment Model (APM) qualified participant determination.

January 1, 2020 – Next application period.

December 31, 2023 – End of the first cycle.