By Jonathan Pearce, CPA, FHFMA
Update 2/7/2018 – CMS has clarified some of the issues described in the article below. However, major questions in the following areas remain significant to potential participants. We hope that clarifications on these issues will be released shortly, since they will have a major effect on the episodes selected by participants.
Targets: The initial descriptions of BPCI Advanced suggested that the targets would be based on each participant’s historical episode cost as was done in the BPCI program; however recent documents have clouded this issue. It now appears that a yet-to-be-defined “risk adjustment” process will be a primary determinant of targets for each participant. For reasons described in this article, the target-setting process needs to be clarified and closely examined.
AAPM Interaction: CMS has noted that BPCI Advanced will qualify as an Advanced Alternative Payment Model for purposes of MACRA, and physicians involved in this program have the opportunity to become Qualified APM Participants (QP) who are eligible to receive the 5% APM incentive payment. This provides a unique opportunity for hospitals to become conveners for employee and community physicians, assuming financial risk while allowing physicians to the episode initiators. However, details on the eligibility for these arrangements are not yet clear.
Outpatient total knee arthroplasty target computation: As noted in this article, the reclassification of TKA surgery from the Medicare inpatient-only list has significant potential effects on the financial results of major joint replacement episodes. This effect is sufficiently significant that many hospitals may elect to forgo participation in this episode, even though it had the highest volume in the BPCI program along with the greatest success. Lack of clarity on how CMS will adjust targets to compensate for the change in the resulting in patient mix will be significantly detrimental to participation in the BPCI advanced program.
The original article is below:
For many of us who are immersed in the world of Medicare bundled payment, and who had prepared for the long-impending release of the "BPCI Advanced" announcement by stocking up on large quantities of caffeinated beverages, the brevity of the 44 page "Request for Application" may have initially been a relief when compared to the 800-1000 page document that we were expecting. However, the many omissions in this document of significant details about the program are somewhat vexing, and will be highly problematic to potential participants. The document did answer some high – level questions about the program, but many details apparently remain to be released. Nonetheless, we'll do our best to summarize the highlights of the program as described in this document. Our template will be the "What to Look for in BPCI Advanced" article from the Singletrack Analytics blog.
Episode Definitions: Initially CMS omitted the list of episodes to be included in BPCI Advanced, but this list has now been added to the website. Of the 29 inpatient episodes, 28 were included in the BPCI program, and we expect the DRGs that define those episodes to remain. Three episodes initiative by outpatient services have been added, marking the first time that CMS has included OP-initiated episodes in the BPCI, CJR or now-cancelled EPM program. Because of the consistent migration of these cases from inpatient to outpatient settings, the costs of episodes that can originate in either an inpatient or outpatient setting may change, and it will be critical to continue to assess the validity of targets based on historical costs relative to current medical practice. lThe episode definitions were not released by CMS with the initial announcement, and a previous version of this article described the absense of those definitions.)
Targets: The initial descriptions of BPCI Advanced suggested that the targets would be based on each participant’s historical episode cost as was done in the BPCI program; however recent documents have clouded this issue. It now appears that a yet-to-be-defined “risk adjustment” process will be a primary determinant of targets for each participant. For reasons described in this article, the target-setting process needs to be clarified and closely examined.
Participants: As expected, participants in BPCI Advanced can be acute care hospitals or physician group practices, as well as nonclinical “convener” organizations operating to assume risk for hospital or physician participants. Because many physician groups do not have the financial capability to absorb the significant amount of episode cost variation in many types of episodes, some type of risk-assuming entity is necessary to allow physicians to participate in these types of programs. And while post-acute providers can contract with participants in financial arrangements, post-acute providers will not be episode initiators in BPCI Advanced.
Quality metrics: CMS did provide a list of quality metrics that must be reported by participants throughout the participation term. Quality metrics will also be utilized in computing the net payments to and from participants, although that methodology is not specified in the document.
Gainsharing: Gainsharing will be allowed in this program, similarly to the approach utilized in the BPCI and CJR programs. Downstream providers can receive gainsharing payments that cannot exceed 50% of the provider payments that they received for performing services for BPCI Advanced patients. CMS also explicitly notes that post-acute providers can also participate in these financial arrangements.
Evaluation and participation periods: The time period for applicants to assess interest in applying for this program is remarkably short. Applications can be submitted beginning January 11, 2018 (which may be difficult considering that the list of episodes has yet to be released), and up through March 12, 2018. These participants will begin the BPCI Advanced program on October 1, 2018. It also appears that applicants will be able to apply for participation period beginning on January 1, 2020; however no details about that application process are available. CMS is also allowing applicants to request historical data for the episodes in which they are considering participation, and has published guidelines and the form for this request; however it is uncertain how timely these requests will be fulfilled, and whether sufficient time will be available to evaluate the episodes based on the data provided. The participation period is stated as October 1, 2018 to December 31, 2023, with an additional enrollment date of January 1, 2020.
Application Process: The application process for BPCI Advanced is laid out in the "Request for Applications" document, and is quite extensive. Simply completing the document on time will be a test of an organization's commitment to participation in this program.
Several other points are interesting. First, participants in the CJR program may not participate in BPCI Advanced in the major joint replacement episodes. This means the current BPCI participants in these episodes who are in mandatory CJR MSAs will transition to CJR as of October 1, 2018. This may be a major change many of these participants this BPCI financial results were based on their performance relative to their own baseline period, and will now be based on a comparison to the regional average episode cost.
In addition, CMS is initiating new "learning system activities" that will include webinars, collaborations, site visits, and other similar activities in which participation will be mandatory for BPCI Advanced participants.
In BPCI Advanced, CMS will carve out certain beneficiaries participate in certain ACO-types of organizations. This differs from the current BPCI program in which participants may overlap into these programs.
What to do now: At this point, only one action is really clear: any provider organization with the remotest interest in the care provided to its patients outside of its own walls should request the CMS data for all possible episodes. This type of data is rarely available to providers except at significant cost, and the opportunity to understand care patterns that occur after hospitalization or outpatient procedures is both unusual and valuable. The exact format and contents of this data reminds unclear, but organization specializing in payment system analytics, such as the Singletrack Analytics/DataGen team, will be able to assemble this data into valuable analytical tools. Even if the provider group elects not to participate in BPCI Advanced, and must subsequently destroy the data (as required by CMS), the one-time look at post-acute care patterns is invaluable. For provider organizations considering participation, this data will be necessary to develop effective care management strategies and financial projections for success in this program.