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.
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.