CMS Adds Alternative Medicare Bundled-Pay Model for Physicians

Kerry Dooley Young

January 10, 2018

Federal officials have introduced another option for physicians and other healthcare professionals to try to increase their Medicare reimbursement with an initiative centered on bundling pay for episodes of care, such as a major joint replacement.

The Centers for Medicare & Medicaid Services (CMS) on January 9 announced the introduction of the Bundled Payments for Care Improvement Advanced (BPCI Advanced) model. CMS is in the midst of implementing a major physician payment overhaul, which the 2015 Medicare Access and Chip Reauthorization Act (MACRA) mandated. Physicians and other healthcare professionals can work within CMS' Merit-Based Incentive Payment System (MIPS) to get judgements about the quality of their service or seek to participate in more challenging models, such as the new BPCI Advanced initiative.

In the BPCI Advanced model, hospitals, physician group practices, and healthcare professionals will be tasked with trying to keep Medicare costs in check while maintaining or improving their performance on specific quality measures set by the agency. CMS will judge how well participants do on 32 kinds of so-called "clinical episodes," such as percutaneous coronary intervention. CMS plans a retrospective approach for this model, with Medicare making its usual fee-for-service (FFS) payments and CMS later determining whether participants owe the program money or are in line for extra pay. Other bundling programs instead work with a payment negotiated ahead of time for an episode of care.

"BPCI Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value," said CMS Administrator Seema Verma in a press release.

Financial Risk

CMS for years has been seeking to shift Medicare away from volume-based payment and instead peg its reimbursement more to judgements about the care delivered. The agency cited the Medicare Participating Heart Bypass Center Demonstration project, conducted in the 1990s, as an example it used in considering the BPCI Advanced model. The bundled-payment approach of the Medicare Participating Heart Bypass Center Demonstration achieved "cost efficiencies through streamlined processes leading to fewer reoperations, lower readmissions, and shorter average lengths of stay,"CMS said.

The BPCI Advanced model is geared toward hospitals, physician group practices, and healthcare professionals who have the ability to meet "aggressive timelines" that may be used for the new program, according to CMS. Participants in the model should already have experience with the coordinated "cross-provider" care approach that is at the heart of the BPCI Advanced model, the agency said.

CMS will ask applicants for the BPCI Advanced model to demonstrate that they can withstand the program's financial risk and repay Medicare if necessary. "This assurance could take the form of an irrevocable letter of credit for the full amount of risk undertaken, or it could take the form of any similarly enforceable mechanism that covers either the full amount or a percentage of the risk," CMS said.

This program will run from October 1, 2018, to December 31, 2023. The initial application deadline is March 12; a single subsequent enrollment date is set for January 1, 2020. The CMS Innovation Center will hold a question-and-answer forum on January 30 from 12:00 pm to 1:00 pm Eastern Daylight Time. Interested parties can register online for the forum.

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