On October 1st
, 2018, The Centers for Medicare & Medicaid Services (CMS) launched Bundled Payments for Care Improvement (BPCI) Advanced, its second-generation voluntary bundled payment program, cementing its commitment to value-based care, and specifically bundled payments for years to come. BPCI Advanced builds on the original BPCI demonstration program (BPCI Classic) initiated in 2013, which received widespread industry support as a value-based care program that captured savings for the government and providers, while affording providers an opportunity to learn and improve. Overall, many providers participating in BPCI Classic experienced positive results and top performing providers consistently realized savings of up to 20%1
, although provider performance was subject to significant variation across different providers, episodes, and geographies.
BPCI Advanced presents a new opportunity for providers to participate in bundled payments under a refreshed set of guidelines, methodologies, and timelines. This blog provides a brief review of what we learned from BPCI Classic and our expectations for BPCI Advanced, including program specifics, the role of conveners, and our view of market receptivity and adoption.
What is a Bundle?
A bundle is defined as a single payment for a complete episode of care, typically initiated by an anchor procedure at the start of an inpatient stay or outpatient visit. For BPCI, CMS combines the payments for physicians, hospitals, device, and other providers (e.g., post-acute) into a single bundled payment that encompasses all costs associated with the defined episode of care. By providing a single payment, providers are motivated to increase efficiency, better coordinate care, and achieve quality outcomes at a lower cost. In BPCI Advanced, CMS has a 3% discount threshold for each episode, generating direct savings for the government while encouraging providers to deliver care more efficiently without compromising quality. Providers involved in the bundle share in the savings they generate above the threshold, motivating them to reduce costs during the episode.
Comparison – BPCI Classic vs. BPCI Advanced
BPCI Advanced arrives with a set of rules that are more sophisticated and strict, particularly when it comes to how bundles are priced. Learning from BPCI Classic, CMS also sought to reduce or eliminate certain “low hanging fruit” opportunities for providers in the program. In general, program changes raise the bar for providers and require better clinical/operational performance to generate savings. One aspect of the program attractive to providers is the ability to add or drop bundles six months into the program, enabling the flexibility to review performance and adjust bundles as appropriate.
Note: Visit CMS’s BPCI Advanced landing page for more detail on target pricing, methodology, etc.
BPCI Advanced Program Timeline
Provider applications for BPCI Advanced were due in March 2018 with final participant agreements and clinical episode selection required by mid-August. Managing to a tight timeline, the program launched in October 2018 and runs through the end of 2023. The next application period begins in the spring of 2019, with the second cohort of participants scheduled to go live in January 2020.
Role of Conveners in BPCI Advanced
Providers can elect to engage convening organizations to help manage their participation in the BPCI program. Convener support comes in several forms, but typically involves a convener engaging an episode initiator (defined as a provider or set of providers that are permitted to initiate a care episode) to provide BPCI expertise, episode selection, and analytic tools that improve the provider’s visibility into performance and likelihood of success. For their efforts, conveners typically share in the risk and reward of the bundles. We believe program changes, which are adding complexity and nuance to the program, could open the door for broader adoption of conveners to provide much-needed support in navigating and excelling in the program. Below, we highlight a few market-leading conveners with varying models:
Our Take on BPCI Advanced
Remedy Partners –
A full-service convener based out of Darien, CT, Wall Street research analysts have estimated Remedy’s market share in BPCI Classic to be 60% of the estimated $10 billion2
total program spend. According to a recent interview with senior leadership3
, Remedy expects to triple its program in BPCI Advanced from the ~200 hospitals it partnered with during BPCI Classic.
- naviHealth – A convener and post-acute service company based out of Brentwood, TN, naviHealth offers a broad portfolio of technology and services to support providers in BPCI and, according to their website, manages 25 different inpatient BPCI Advanced bundles across more than 50 hospitals today.
- Premier – A national group purchasing organization that offers providers a more basic set of BPCI tools and analytics. Premier describes its program as a Bundled Payment Collaborative, which includes more than 120 healthcare facilities as members.
- Signature Care Management – A service and technology offering from Signature Medical Group, a multi-specialty physician group based out of St. Louis, MO, Signature serves as a specialty convener focused primarily on orthopedics in BPCI Advanced, building on its BPCI Classic footprint that included 27 states, 1,200 doctors, and $1 billion in spend.
Across the TripleTree platform, we believe bundled payments will be driving force and catalyst in the shift to value-based care for years to come. While BPCI Advanced is in its early stages, BPCI Classic established enough positive proof points and potential for bundles to gain momentum inside and outside of Medicare. We have a few predictions as BPCI Advanced begins to take shape:
- Marquee health systems and large hospitalist / specialty surgery groups will participate more meaningfully in BPCI Advanced than in BPCI Classic, contributing to a significant growth of the spend, potentially well above the $10 billion of total spend in BPCI Classic
- Commercial health plans and large employers, following the lead of CMS, will more meaningfully enter the bundled payment market – through partnership, in-house offerings, or as customers of conveners
- The role of conveners will evolve as organizations (e.g., commercial health plans and employers) step into bundle payments more meaningfully
- Software and analytics will play an even larger role in bundles as technology vendors improve their offerings and providers seek more visibility into clinical and financial aspects of their bundled payment programs
We are excited to watch the BPCI Advanced program launch and monitor participation levels and market success over the coming years. In the meantime, let us know what you think.