Abstract
Introduction
Bundled Payments (BP) were a revolutionary new experiment for CMS that tested whether risk sharing for an episode of care would improve quality and reduce costs. The initial success of BP accelerated their growth as evidence by the launch of both mandatory and commercial bundles. Success in BP is dependent on the target price and the opportunity to reduce avoidable costs during the episode of care. There is concern that the aggressive target pricing methodology in the new model (BPCI-Advanced) penalizes high performing groups that already achieved low episode costs through prior experience and investment in BP. We hypothesize that this methodology incorporates unsustainable downward trends on target prices to a point beyond reasonableness for efficient groups to reduce additional costs and will lead to a large percentage of groups opting out of BPCI-A in favor of a return to fee for service (FFS) reimbursement.
Methods
Using CMS data, we compared the target price factors for hospitals that participated in both BPCI classic (2013 –2018) and BPCI Advanced (beginning 10/2018), referred to as “legacy hospitals”, with hospitals that only participated in BPCI Advanced (beginning 10/2018). With the rebasing of BPCI-A target prices in Jan 2020 and the opportunity for participants to drop out of individual episode types or the program all together, we compared the retention of episode types that hospitals initially enrolled at the onset of BPCI-A with the current enrollment in 2020. Locally, we analyzed the BPCI-A target price factors across hospitals for a large orthopaedic practice that participated in BPCI Classic and the impact it had on the financial incentive/disincentive to remain in the lower extremity joint replacement episode type in 2020.
Results
At its peak in July 2015, 423 acute care hospitals participated in one or more episode type in BPCI Classic. At its peak in March 2019, 715 acute care hospitals participated in one or more episode types in BPCI-Advanced. 130 (18%) of the hospitals in BPCI Advanced were also legacy participants in BPCI Classic, enrolling in 414 of the same episode types during both programs. In 2020, 251 (61%) of the episode types that hospitals were in enrolled in for both BPCI Classic and BPCI Advanced were dropped, suggesting prior experience in BPCI influences a participant's opportunity for success in BPCI Advanced. Furthermore, an analysis of the target price factors for episode types enrolled in by legacy hospitals during both programs suggests that prior participation in BPCI Classic is correlated with more aggressive target prices. A comparison of target price factors of similar hospitals reveals that legacy BPCI Classic hospitals that participated in lower extremity joint replacement (LEJR) BPCI Advanced received a larger negative adjustment on the target price (0.11 lower on average as a product of the Peer Adjusted Trend factor and ACH Efficiency factor) than non-legacy hospitals that participated in BPCI Advanced. Furthermore, analysis of the hospital targets for a large, high-performing legacy Physician Group Practice in BPCI Classic for LEJR revealed even greater negative adjustment on the target price than non-legacy participants. Comparing participants of similar peer groups on the Peer Adjusted Trend and ACH Efficiency factors suggests that CMS expects costs to decline more for legacy hospitals that have achieved efficiency than hospitals with no prior BP experience and higher baseline spend.
Conclusions
BPCI Advanced provides little to no opportunity for a reduction in cost for already efficient TJA providers, as evident by the 55% dropout rate for BPCI-A participants in LEJR between model years 1 and 3. Efficient TJA providers in BPCI Advanced are challenged by the program's utilization of a peer adjusted trend factor and efficiency factor that presumes their costs will decline at the same aggressive rate or more than nonefficient TJA providers. It remains to be seen if reverting to Medicare fee for service will support the same level of care coordination, cost and quality achieved in historical TJA bundled payment programs.
