Industry Insights

In recent conversations, articles and seminars we’ve heard wary potential BPCI Model 2 participants propose to select a 30-day episode length as a “safer” alternative to the longer 90-day episode.  In some cases the shorter episode length does provide some risk mitigation against uncontrollable high costs such as readmissions. However, that safety comes at a price that may not be warranted. This is because of these two factors: 

Jonathan Pearce, CPA, FHFMA and Coleen Kivlahan, MD, MSPH

The Medicare Bundled Payment for Care Improvement (BPCI) program allows participants to assume financial risk for all Medicare services occurring within 30 to 90 day period after hospital discharge. Model 2 participants give up 2% of the episode target amount as a discount to CMS in 90-day episodes, but are allowed to retain any savings from Medicare cost reductions below the target amounts.

As the deadline for submission of April 2015 applications for the Bundled Payment for Care Improvement (BPCI) initiative looms, many applicants are trying to figure out the best approach to selecting risk tracks for various episodes. Some participants are looking for "algorithms" that can assist them in selecting the most appropriate risk track, while others are noting that risk track can be changed throughout the participation period, and may wish to switch risk tracks based on their performance during a previous quarter.