BPCI Data: Episode Definition

The Bundled Payment for Care Improvement (BPCI) initiative is a program composed of four distinct models, conveniently called Model 1, Model 2, Model 3 and Model 4. Each model has its own definition for an episode of care, specifying how to detect them, what's included and how to deal with overlapping episodes and other situations as well. In Model 2 for instance, only certain MS-DRGs are considered when detecting episodes, but a Model 1 episode will be triggered by any MS-DRG and only Part A DRG-based payments are considered. For Model 1, 2 and 3 payments are made retrospectively, whereas for Model 4, CMS makes the initial payment for an episode and participant submits "no-pay" claims.

CMS thus defined all the rules on how to detect episodes, which claims to assign to an episode, and more.

Precedence rules

Each episode is attributed to an episode initiator (participant). There could be multiple participants involved over a certain timeframe, therefore CMS established precedence rule to ensure there will be only one episode of care taken into account at any time. In a nutshell, Model 4 participants trumps everyone else. Then comes the notion of earlier participation. Any Model 2 or 3 enrolled before another Model 2 or 3 will take precedence. Finally, within the same participation period, PGP trumps non-PGP, both preceding Model 2s, which, in most cases, trumps Model 3s.

This is a very important aspect of the program to understand as a participant, as this can affect your volumes.

Inclusion/Exclusion rules

This is yet another important aspect in this program. There are three different levels of inclusion/exclusion rules:

  • Beneficiary, where coverage and other status must match certain criteria, otherwise episode is discarded for the purpose of this program
  • Inpatient stay, based on MS-DRG, where an included inpatient stay (aka readmission) will raise the costs, but an excluded stay can either be the trigger for a new episode, or simply be discarded.
  • Claims, based on ICD10, can be either included (adding up costs) or discarded.


CMS defined a proration algorithm that apply to all claims, including Home Health Agency. Costs are associated to three different periods of an episode:

  • Anchor costs will represent all inpatient, part B and DME costs during the acute care inpatient stay.
  • Post-discharge costs represent any inpatient, SNF, HHA, DME, OP, Carrier costs happening during the period length you chose for that bundle. If a SNF stay or the HHA episode goes beyond that period, those costs will be prorated. There is right now one exception which is hospice costs. Those happening during the post-discharge period are applied towards the post-episode period costs.
  • Post-episode costs represent any costs happening within 30 days after the end of the post-discharge period. CMS monitors those costs and in some cases, you might be responsible for a portion of those costs.

Archway Health

Archway Health developed its own BPCI Engine, following the specifications provided by CMS. This allows us to detect episodes of care, provided necessary claims, and calculate pro-rated costs and estimated performance before reconciliation. With this technology, Archway Health can provide participants faster feedback and reporting, and even simulate different configurations when evaluating participation and figuring out bundle selection.

For you to focus on your core activities, Archway Health takes care of staying on top of the specifics of the BPCI program and provides the tools and services so you know where you stand.