The New York State Society of Orthopedic Surgeons and Archway Health hosted this webinar on December 14th, 2017. This video highlights some insightful commentary from Dr. Jordan Simon of Northeast Orthopedics and Sports Medicine about why his practice joined the BPCI program and their experience working closely with Archway to design a successful program.
The Centers for Medicare and Medicaid (CMS) released in October the third annual Bundled Payments for Care Improvement (BPCI) evaluation report, produced by healthcare consulting firm The Lewin Group. Skeptics of this particular CMS Advanced Alternative Payment Model (APM) say it is difficult to confirm whether or not the payment model is beneficial. However, we were encouraged by the report, as it demonstrates where BPCI bundled payments have been successful, and addresses program design deficiencies that CMS has begun correcting in newer programs.
With regards to quality, the 2017 BPCI report did not show significant improvement among the program’s participating providers. While CMS does track quality performance in BPCI, provider payments are not adjusted by quality scores, signaling a lack of concrete incentive for providers.
CMS began to address this shortcoming in more recent bundled payment programs, including Comprehensive Care for Joint Replacement (CJR), Oncology Care Models (OCM) and the recently canceled Episode Payment Models (EPM) by adopting quality scoring methodologies that impact provider reimbursement. And, in the forthcoming next generation of BPCI, CMS will close the loop by requiring that provider payment be adjusted by quality performance so that providers qualify for the Advanced APM track under Medicare Access and CHIP Reauthorization Act (MACRA).
Target Pricing Methodology
The BPCI report also statistically confirmed previous concerns voiced by providers about the program’s pricing methodology. The current BPCI methodology is based on provider-specific historical data; participants are rewarded for improving efficiencies in relation to their historical spend. As a result, many providers who had already made efforts in care redesign before the start of BPCI opted not to participate in the program, as they’d be disadvantaged under the target pricing methodology.
In the subsequent CJR and EPMs programs, CMS incorporated regional spend into target prices to incentivize high-performing providers to continue to engage in care improvement efforts. For OCM, CMS adopted national pricing factors to establish more equitable target pricing among participants. Additionally, CMS has indicated that the next version of BPCI will strive to bring both highly efficient and less efficient providers into the fold.
Reliance on Medicare-Severity Diagnosis Related Group (MS-DRG) Assignment
The 2017 BPCI report also revealed challenges in determining the appropriate bundle for patients with comorbid conditions. Currently, episodes in the BPCI program are triggered by an inpatient admission, and the corresponding MS-DRG assignment dictates the target price. For patients with multiple diagnoses, it can be difficult to know which bundle the patient will be assigned to.
CMS recently announced it is field-testing new ambulatory bundles for physicians under the Merit-based Incentive Payment System (MIPS). These bundles demonstrate CMS is looking to identify ways to define bundles that are not reliant on MS-DRG assignment. And, in finding more effective ways to assign bundles to the most appropriate physician, instead of defaulting to the attending or operating physician at the time of admission, CMS will have better insight to create a more adaptable assignment system for future bundled payment programs.
Turning Hindsight into Foresight
Archway was also encouraged by the physician-focused language in last month’s RFI concerning CMMI’s “new direction” as we believe this is a peek into the future of value-based payment models. Based on the language and priorities outlined in the RFI, Archway predicts that forthcoming payment models, including BPCI Advanced, will be more inclusive of specialty and independent physician practices.
So, despite limited data and some program design flaws, the third annual BPCI evaluation report reinforces that this innovative program is driving change in the healthcare market. BPCI participants consider bundled payments as “the future of payment reform” as they continue to be a championed tool of value-based care for Medicare, commercial payers, and employers.
Learn how Archway can be an ideal partner for your organization to participate in future bundled payments.
The survey results are based on responses from 70 participants across the U.S. The participants, which included executives, administrators and clinicians, represented the continuum of healthcare from hospitals, specialty care, post-acute facilities and home health care.
Key findings from Archway’s survey indicate the impact of bundled payments:
- 75% of respondents say involvement in these programs has improved quality of care, whether it lowered costs or not.
- 63% of respondents say bundled payments has both improved quality and lowered cost.
- The most prominent reason for not participating in bundled payments was the potential administrative burden. No respondents cited a limited return on investment as a reason for not participating.
“It was great to get such a strong and positive response that confirms what we’re seeing with our provider partners – bundled payments work,” said Dave Terry, founder and CEO of Archway Health. “Bundled payments will continue to play a major role in healthcare as we move from volume to value, especially as we move toward models that encourage efficiency and improvements in care quality. Archway is dedicated to helping specialists succeed in all of these programs as they continue to grow.”
Other findings from the survey indicate healthcare professionals’ attitudes towards bundled payments:
- As CMS is expected to release a second generation of Bundled Payments for Care Improvement (BPCI), 75% of respondents are “definitely” or “probably” planning to participate.
- When it comes to bundled payments, 25% of healthcare professionals say they are “100% ready” to implement them, while 56% are “getting prepared” or “just started the process” with more to do.
“It’s great to see that healthcare professionals want to participate in bundled payments and are actively preparing to do so,” said Keely Macmillan, general manager of BPCI for Archway Health. “Bundled payments offer clinicians and healthcare professionals the opportunity to take control of the entire care process and ensure patients achieve the best outcomes in a cost-efficient manner.”
Since its inception in 2014, Archway Health has been active and solely focused on bundled payments. Specialists and providers partner with Archway to receive guidance on how to navigate every step of bundled payments participation.
To learn more about bundled payments, the survey, the anticipated new CMS program and how it impacts providers, please contact email@example.com.
About Archway Health
Archway Health, founded in 2014 and built on a deep foundation of healthcare payment reform expertise, works with providers to design and execute care and risk management initiatives that drive success in bundled payment programs. Archway is currently working with leading healthcare providers participating in the CMS BPCI and OCM programs, as well as with commercial payers operating bundled payment initiatives. To support these programs, Archway works with providers to analyze their opportunities and risks and to deploy its comprehensive platform of analytics, patient tracking tools, and advisory services to ensure their success in bundled payments. For more information, please visit www.archwayhealth.com.
For Archway Health Olivia Armstrong, 781-924-6714 firstname.lastname@example.org
This week, the Centers for Medicare & Medicaid Services (CMS) announced it will cancel its mandatory cardiac and orthopedic Episode Payment Models (EPM), in addition to scaling back the Comprehensive Care for Joint Replacement (CJR) model. While the news has left some questioning the future of value-based care, the cancellation of these mandatory bundled payment programs is a favorable indication of the future of voluntary reimbursement programs. The recent cancellation of mandatory bundles has been brewing for some time. Prior to the cancellations, Tom Price, Secretary of the U.S. Department of Health and Human Services delayed the effective start date of EPM, and openly criticized the mandated programs. And while it may seem that bundled payments have been through the fire in just a few short days, two voluntary models that have seen much success among providers have emerged unscathed: Bundled Payments for Care Improvement (BPCI) initiative and Oncology Care Model (OCM).
Even when mandated programs were in place, hospitals and other stakeholders were pressing for voluntary initiatives. Results from the voluntary programs have shown greater engagement and increased savings among providers who are eager to improve quality and reduce costs in a pressured healthcare environment. As success of the voluntary models continues, we expect the adoption of these programs will only continue to grow.
At Archway, we have a rather unique opinion on the recent news and the mandatory versus voluntary debate. As a bundled payment company, one would likely assume we are in favor of mandatory bundled payment participation. In fact, we believe the best approach for bundled payment programs is to allow voluntary participation.
While we were initially excited about the CJR and EPM programs that included mandatory participation for certain areas and hospitals, we have concluded over the past two years that voluntary programs will have a bigger and more rapid impact on the shift from volume to value.
Even better news in the announcement this week is the clear indication that CMS is moving full speed ahead with a new voluntary bundled payment program that will allow hospitals, specialists and post-acute providers to serve as Episode Initiators. We view this as a very positive development for providers who missed the last voluntary open enrollment period in early 2014. This program will also enable CMS to offer an opportunity for specialists to participate in a MACRA qualifying Advanced Alternative Payment Model (APM) in 2018.
As CMS prepares to launch the next generation of BPCI in the coming weeks, we’ve actively advocated for the program to be voluntary. There are three main reasons why we believe voluntary bundled payment programs will be more successful in this transition:
The first is the willingness of providers to commit to payment reform. Because they have signed up, provider organizations participating in the voluntary programs are more engaged and motivated to change processes, improve care, and reduce costs. As a result, the improvements are more significant and the adoption occurs more rapidly.
The second is that voluntary programs don’t have to appeal to all providers. In order to make mandatory programs palatable to reluctant participants, the rules tend to be watered down compared to the rules within the voluntary programs. As a result, there is less urgency to change behavior, and the improvements in care and cost are not as substantial.
Finally, we have seen many specialty groups, hospitals and post-acute providers achieve significant success in these voluntary initiatives. In the programs we have helped manage, we have seen outcomes improve, patients return home faster, and significant savings earned by both CMS and the Episode Initiating providers.
Even in losing these mandatory bundled payment programs, CMS continues to push the industry toward value. By having voluntary participants show the benefits and significant improvements from bundle payment programs, more providers will eventually want to participate, and we are confident we will see a more impactful shift in payment reform.