Published in the February 2018 Today’s Hospitalist
LAST MONTH, the Centers for Medicare and Medicaid Services (CMS) released a long-awaited announcement: The agency is launching a new iteration of its Bundled Payments for Care Improvement (BPCI) initiative later this year.
Called BPCI Advanced, the new model will usher in bundled payments for 32 separate clinical episodes, 29 of which are inpatient, for physicians and hospitals that choose to participate. Groups and organizations will take risk for 90-day episodes in each bundle chosen; those that bring episode costs in under price targets will be able to gainshare the savings.
Further, BPCI Advanced—unlike the regular BPCI program, which several hundred physician groups and hospitals have participated in since 2013—qualifies as an advanced alternative payment model under MACRA. That means that participants are potentially eligible for alternative-payment bonuses. The CMS is now accepting applications through March 12 to participate in BPCI Advanced, which begins Oct. 1.
“Many groups may just sit this out and see what happens.”
Given the fact that hospitalists have by far been the specialty with the highest participation in the regular BPCI program, isn’t this great news? Maybe, says Ronald Greeno, MD, MHM, the senior advisor for medical affairs at TeamHealth and the long-time chair of the public policy committee for the Society of Hospital Medicine, as well as its current president. According to Dr. Greeno, the model has many new features and unanswered questions, making it very complicated for organizations to determine whether they should participate.
“It’s still very early,” says Dr. Greeno, “but decisions need to be made fast.”
He spoke to Today’s Hospitalist.
Is this an opportunity for hospitalists?
We’ll have to see, and we’re still assessing this. It’s good news that the CMS is moving ahead with a new, qualifying advanced alternative payment model (APM).
But there will still be challenges in terms of allowing most hospitalist groups to participate in the APM track. Even under BPCI Advanced, most hospitalists will still be stuck in the merit-based incentive payment system (MIPS) track.
It has to do with the math set up to calculate the thresholds of patients and payments in the alternative payment model. To qualify for an APM bonus in the first couple of years of the program, 25% of all your payments for all Medicare beneficiaries or 20% of the Medicare patients you treat in a year must come through some kind of advanced APM, like BPCI Advanced. And that’s hard to do.
Most physician groups and hospitals will take risk on only a handful of these bundles, not all 29. Say you decide to participate in five bundles: You’ll still see many more Medicare patients for DRGs outside those bundles, so it will be very hard to reach the 25% threshold. Some hospitalists may hit it if they participate in both BPCI Advanced and in an ACO that qualifies as an advanced model. But in a couple of years, the threshold goes to 50%, so it will continue to get harder.
We were aware of this as soon as MACRA came out, and we’re trying to convince Congress to change those thresholds. The CMS can’t make that change because the thresholds are part of a statute, so it’s going to take a change in the law.
So even with BPCI Advanced, most hospitalists won’t qualify for the lump-sum APM bonus of 5% of their fee-for-service Medicare payments from the previous year?
That’s right. Hospitalists may very well have another option so they won’t have to report under MIPS: the facility-based option, which we expect to be available in 2019. And hospitalists who don’t qualify for an APM bonus will still be able to gainshare in BPCI Advanced if they help bring episode costs in under price targets.
How will those price targets be set?
Those will vary by hospital, based on each hospital’s historic performance. So organizations or groups will apply and then find out their individual price targets for the bundles they choose.
At that point, they don’t have to move forward if they don’t think those targets will work for them. If they do move forward, one good piece of news is that the targets in this model won’t change over the course of the risk period, except for a final risk adjustment. But in BPCI Advanced, organizations also won’t be able to drop bundles until 2020, another new feature of this model that’s different from the existing BPCI. They’ll be essentially underwriting risk for five quarters without an opportunity to change that risk, and that’s a big deal.
Another difference with this new model vs. the existing one: Medicare will keep the first 3% of savings instead of the first 2%. So there’s significant risk in how this model is being structured.
BPCI Advanced also features quite a few quality measures that participants will have to meet.
That’s another new feature of this model—and it’s the reason why the existing BPCI program didn’t qualify as an advanced APM: It didn’t make gainsharing payments contingent on meeting quality criteria. This one does, so those are more criteria you’ll need to evaluate in deciding whether to apply. You could participate in BPCI Advanced bundles and save money, but if you don’t meet the quality outcomes, you won’t get paid.
And the next chance to apply to participate in this model won’t be until 2020?
That’s right. So groups and organizations will have to take a lot of factors into account to decide if they want to participate, and these are tough decisions. What kind of investment in staffing and infrastructure do they need to succeed, what’s the potential payoff of that investment, what’s their tolerance for risk, and what capabilities do they need to handle that risk?
Many groups may feel they can’t make that assessment by the time they need to apply, so they may just sit this out and see what happens. The CMS may introduce other advanced APM models for which it could be easier to assess risk and, hopefully, those models would be available to hospitalist groups.
Phyllis Maguire is Executive Editor of Today’s Hospitalist