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Most BPCI participants will undergo their first BPCI reconciliation in October, which will cover the first quarter of 2014. We’ve heard that some participants appear to be basing their ongoing participation in the BPCI program on these results. If a surplus occurs, they’ll stay in the program and may even add additional episode families. But if the results are negative, they’ll be jumping ship faster than the captain of the Costa Concordia.
In our previous article on this topic we discussed ways in which randomness in patient selection causes variations in average episode costs. Even for higher-volume DRGs, these variations can create significant differences in the settlement amounts during CMS reconciliations. In this article we describe a simulation methodology that allows estimating the extent to which these variations will occur.
The randomness in episode costs has always troubled the Singletrack Analytics team. Even for high volume episodes, randomness makes it difficult to gain a good understanding of financial performance. After CMS released the mock reconciliations, we started wondering how much variation would be present in the quarterly average costs that would be reconciled throughout the performance period. This triggered the analysis below.