In the two current Medicare bundled payment programs, three different methodologies have been used to establish payment targets. In the BPCI program targets are based on each participant’s historical episode cost, with “cost” defined as all payments made by Medicare or beneficiaries for services provided to the beneficiary during the episode. In this program participants will achieve financial success by reducing episode costs below their historical levels.
Guidance for Healthcare Providers and Purchasers
Leading healthcare data analytics insights:
Bundled payment episodes for major joint replacement (MJR) have been among the most successful "experiments" into the BPCI and CJR programs. Most BPCI participants in MJR episodes have been effective in reducing post-acute institutional utilization, and have achieved significant cost savings in these episodes. Among our clients participating in the CJR program, about 35% achieved savings that exceeded the stop gain limits; another 25% achieved savings that did not exceed the stop gain limits, and only 25% had losses.
by Jonathan Pearce, CPA, FHFMA and Darcie Hurteau