Healthmonix Advisor

Bundled Payments Part II

Posted by Lauren Patrick on November 3, 2016


Recently, we highlighted one of the fastest growing types of initiatives for improving the delivery of value-based care--the bundled payment model--and offered some popular opinions about why it is taking off. This week we’ll dive into some specific bundled payment initiatives past and present.

Bundled Payment for Care Improvement Initiative

The Bundled Payment for Care Improvement Initiative (BPCI) is an ongoing, voluntary program which CMS began in 2013 and which tests four different models based on one or several of 48 different episodes of care involving inpatient hospital stays. Providers may participate in the BPCI initiative individually or as part of a larger group such as a hospital association or health system. While the most recent Medicare report doesn’t contain enough data to clearly define how much impact these models have on cost and quality, a CMS blog post calls the early results, especially those related to orthopedic surgery bundles, “encouraging.”

In April, CMS announced that participants can now extend participation in Models 2, 3, and 4 through September 30, 2018. As of this announcement, the program had 1,522 participants. CMS lays out more specific information about the BPCI initiative, including a detailed list of the 48 episodes of care and an interactive map of innovation models, here.

Oncology Care Model

The Oncology Care Model (OCM) is another voluntary program whose goal is to enable improved coordination, appropriateness, and access of care to chemotherapy patients during a six-month period following their initial chemotherapy treatment. This is a five-year model that began in July 2016 and runs through June 2021. Payment is episode-based, and uses a two-part system including a $160 Monthly Enhanced Oncology Services (MEOS) payment for the duration of the episode per beneficiary and a potential performance-based payment, in addition to fee for service billing. OCM participants include 195 practices and 16 payers. More specific information about participants can be found on CMS’s OCM page.

Comprehensive Care for Joint Replacement

CMS finalized the Comprehensive Care for Joint Replacement (CJR) model late last year, and it went into effect in April 2016. The CJR model is the first mandatory model on our list, and is being implemented in almost 800 hospitals across 67 communities over the course of five years. The model focuses on episodes of care for lower extremity joint replacement or reattachment of a lower extremity.

Some organizations, including the American Academy of Orthopaedic Surgeons, expressed concerns about potential dangers of CRJ such as its lack of risk-adjustment and short implementation timeline. Two surveys released in March of this year also suggested that participants felt unprepared for the changes. Still, CMS believes that if it is effectively implemented, the CRJ model “will improve the quality and efficiency of care for Medicare beneficiaries.” More information and a list of participants can be found here.

Cardiac Rehabilitation Incentive Payment Model

The Cardiac Rehabilitation Incentive Payment Model was announced in July of this year with the goal of testing the impact of incentive payments on the use of cardiac rehabilitation services for patients who have been hospitalized for a heart attack or bypass surgery. This model is compulsory for randomly selected hospitals in 98 geographic areas, and is scheduled to begin in July 2017. In years 3-5 of implementation, savings or penalties up to 5% will be calculated based on regional baselines instead of being limited to baselines within local communities.

The American Medical Group Association (AMGA) recently published comments to CMS regarding this model, proposing changes such as a reconsideration of how to determine appropriate financial benchmarks, accounting for patient-based risk factors, and care integration and coordination with ACOs.

In our next installment of this series, we will focus on the benefits and caveats of bundled payment initiatives, and the steps providers can take to use bundled payments to their advantage.

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Topics: Bundled Payments, Policy