Industry Insights

CMS Commits to Bundles

January 2018
Author:  Eric Rogers

Eric Rogers

Senior Managing Consultant

Health Care Performance Advisory Services

910 E. St. Louis Street, Suite 200
P.O. Box 1190
Springfield, MO 65801-1190 (65806)


On January 9, 2018, U.S. Department of Health & Human Services Secretary Nominee Alex Azar made a statement that significantly advanced the payment reform movement. Azar said innovation efforts between providers and the Centers for Medicare & Medicaid Services (CMS) should continue, and even be mandated, if voluntary efforts fail to provide sufficient data to test transformation. The CMS quickly took an opportunity to follow Azar’s confirmation hearing by announcing the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced). The program is structured similar to the BPCI and Comprehensive Care for Joint Replacement (CJR) programs and offers acute care hospitals and physician group practices an opportunity to receive gainsharing payments by successfully coordinating care and reducing CMS expenses incurred during the episode.

Key Considerations

  • There’s only a two-month application window from January 11 to March 12, 2018
  • Claims data and target prices will be provided after the initial application is submitted
  • The program begins October 1, 2018, and continues until December 31, 2023; a second application period is slated for January 1, 2020
  • The program is a retrospective bundle, meaning fee-for-service payments will continue under current methodologies for all providers, i.e., hospital, home health, skilled nursing, Part B, etc., and the episode will be reconciled semiannually against target prices to determine gains or losses
  • Participants can select their own bundles from the following:
    • 105 Medicare Severity-Diagnosis Related Groups will be grouped into 29 inpatient episodes to choose from
    • 30 Healthcare Common Procedure Coding System codes will be grouped into three outpatient episodes to choose from
  • BPCI Advanced will qualify as an Advanced Alternative Payment Model under the Medicare Access and CHIP Reauthorization Act of 2015
  • There will be a 20 percent stop gain and 20 percent stop loss provision to limit excessive earnings and losses
  • The reconciled payment amount will be adjusted with quality indicators

How BKD Can Help

BKD has had success helping BPCI and CJR hospitals and physicians. Many of our clients have significant gains and continue to look for new bundled payment opportunities. Our team of clinicians, data analysts and service line leaders is prepared to help you in the following ways:

  • Application process (only two months to apply)
  • Strategic data analysis to assess whether BPCI Advanced is a good clinical and business decision for your hospital/physician group practice
  • Episode selection
  • Program development and structure
  • Best practices for care pathways, clinical risk management, discharge protocols, waiver utilization, identification and development of post-acute network
  • Physician engagement and alignment
  • Gainsharing development and implementation
  • Ongoing monitoring of episodic claims data with BKD’s trademarked BKD OUTCOMES COMPASS™ online dashboard

The following sample dashboard demonstrates how OUTCOMES COMPASS can convert raw claims data into actionable intelligence.

Click to enlarge photo.

To learn more or if you have detailed questions, contact Eric Rogers.

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