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CMS announces new voluntary episode-payment program: BPCI Advanced

John Howard Ken Farris January 10, 2018

On Jan. 9, 2018, the Centers for Medicare and Medicaid Services (CMS) announced a new voluntary episode-payment program, Bundled Payments for Care Improvement Advanced (BPCI Advanced). Following on the success of the initial Bundled Payment for Care Improvement program, BPCI Advanced is designed to test at-risk, episode-based payments for 32 clinical episodes.

The bundled payment model allows health care providers to accept risk for the cost of care associated with a clinical episode “based on how successfully they manage resources and total costs throughout each episode of care.” BPCI Advanced payments will be based on performance compared to a target episode price and the satisfaction of various quality measures.

BPCI Advanced allows providers to choose from one or more of 32 different clinical episodes, including 29 inpatient episodes and three outpatient episodes. Clinical episodes begin upon the admission for the episode (an inpatient stay or for the outpatient procedure) and continue for 90 days.

The BPCI Advanced bundled payment amount is based on managing the cost of episode care and certain quality metrics. BPCI Advanced considers the total cost of care — i.e., the total Medicare fee-for-service payments on all items and services related to a clinical episode received by a BPCI Advanced Medicare beneficiary — in comparison to the CMS target price for the episode. Like the previous voluntary payment program, BPCI Advanced participants bear the risk of managing these costs. If the actual total cost of care is less than the target price, the BPCI Advanced participant is eligible to realize a gain. If the total cost of care is greater than the target price, the BPCI Advanced participant will be responsible for the excess costs of care. The BCI Advanced program encourages providers to work collaboratively in managing the health care of Medicare beneficiaries in these clinical episodes.

BPCI Advanced payments are also subject to successful quality performance. Two of these quality metrics are included in all clinical episodes:

  • All-Cause Hospital Readmission Measure; and,
  • Advanced Care Plan.

The remaining five quality metrics apply only to certain clinical episodes:

  • Perioperative Care: Selection of Prophylactic Antibiotic: First or Second Generation Cephalosporin;

  • Hospital-Level Risk-Standardized Complication Rate Following Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty;

  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft Surgery;

  • Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction; and,

  • AHRQ Patient Safety Indicators.

CMS may add additional quality measures to the program on an annual basis.

Unlike its predecessor program, BPCI Advanced has simplified precedence rules – that is, a CMS method of attributing bundled payment risk to BPCI Advanced participants – based on type of group. In general the precedence order is as follows: (1) Physician Group Practice with the attending physician, (2) Physician Group Practice with the operating physician, and (3) acute care hospital with the anchor admission.

BPCI Advanced qualifies as an advanced alternative payment model with tracking for purposes of related alternative payment incentive beginning on Jan. 1, 2019.

Currently, the Secretary of Health and Human Services has not issued any waivers of fraud and abuse laws for providers participating in BPCI Advanced. The Secretary may issue waivers that are necessary to develop and implement the BPCI Advanced program.

Currently, providers have the opportunity to enroll for an initial performance period starting Oct. 1, 2018. Applications to enroll in this performance period are due by March 12, 2018 and must be submitted to CMS through an initiative-specific online portal. CMS currently anticipates a second enrollment period for a new performance period starting Jan. 1, 2020.

John Howard and Ken Farris are attorneys in Thompson Coburn’s Health Care group.