CMS is going to make key changes to Bundled Payments for Care Improvement (BPCI) Advanced next year to stop the model from generating financial losses of close to $2 billion over the model’s ten performance periods.
Model year 4 will begin on Jan 1, 2021. CMS’s Innovation Center will modify target pricing calculations using an adjusted retrospective element. There is one thing that participants need to choose clinical episodes groups versus individual episodes, address clinical episode overlap, remove the physician group practice offset, and alter risk adjustment for major joint replacement episodes.
According to CMS Innovations, the Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model is a new iteration of the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (Innovation Center) continuing efforts in implementing voluntary episode payment models.
The Model aims to support healthcare providers who invest in practice innovation and care redesign to better coordinate care and reduce expenditures while improving the quality of care for Medicare beneficiaries. BPCI Advanced qualifies as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.
The overarching goals of the BPCI Advanced Model are: Care Redesign, Health Care Provider Engagement, Patient and Caregiver Engagement, Data Analysis/Feedback, and Financial Accountability.
The first cohort of Participants started participation in the Model on October 1, 2018, and the Model Performance Period will run through December 31, 2023. The second cohort started on January 1, 2020. At this time, CMS is not planning any additional application opportunities for the Model. You can review the Request for Applications (RFA) for Model Year 3.
BPCI-Advanced is defined by the following characteristics:
- Voluntary Model
- A single retrospective bundled payment and one risk track, with a 90-day Clinical Episode duration
- 31 Inpatient Clinical Episodes starting Model Year 3
- 4 Outpatient Clinical Episodes starting Model Year 3
- Qualifies as an Advanced Alternative Payment Model (AAPM)
- Payment is tied to performance on Quality Measures
- Preliminary Target Prices provided prior to each Model Year
The BPCI Advanced Model aims to encourage clinicians to redesign care delivery by adopting best practices, reducing variation from standards of care, and providing a clinically appropriate level of services for patients throughout a Clinical Episode.
BPCI Advanced will operate under a total-cost-of-care concept, in which the total Medicare Fee for Services (FFS) spending on all items and services furnished to a BPCI Advanced Beneficiary during the Clinical Episode, including outlier payments, will be part of the Clinical Episode expenditures for purposes of the Target Price and reconciliation calculations, unless specifically excluded.
A BPCI Advanced Clinical Episode is structured to begin either at the start of inpatient admission (the Anchor Stay) to an Acute Care Hospital (ACH) or at the start of an outpatient procedure (the Anchor Procedure). Inpatient admissions that qualify as an Anchor Stay will be identified by Medicare Severity-Diagnosis Related Group (MS-DRGs) codes, while outpatient procedures that qualify as an Anchor Procedure will be identified by Healthcare Common Procedure Coding System (HCPCS) codes.
The Clinical Episode length will be the Anchor Stay plus 90 days beginning the day of discharge or the Anchor Procedure plus 90 days beginning on the day of completion of the outpatient procedure. Clinical Episodes are constructed to include all services that overlap the Clinical Episode window, with some exclusions.
Pricing Methodology and Payment
The BPCI Advanced Model uses a retrospective bundled payment approach. Specifically, under BPCI Advanced, CMS may make payments to Model Participants or Model Participants may owe a payment to CMS after CMS reconciles all non-excluded Medicare FFS expenditures for a Clinical Episode against a Target Price for that Clinical Episode. The Target Price calculations, Reconciliation calculations, and attribution of Clinical Episodes to Participants will each occur at the Episode Initiator (EI) level.
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