Participants in the Medicare bundled payment programs hope to achieve positive financial results by revising care processes, focusing on particular elements of post-acute care, reducing medically unnecessary care and hoping that the resulting cost savings will fall to their bottom line. In many cases this will occur.
In evaluating episode participation in the BPCI Advanced program, evaluation of targets can provide significant guidance in selection of episodes with high probability of financial success. This article explores the process for evaluating targets in the BPCI Advanced program.
Many hospitals participating in the Medicare BPCI Advanced program have recognized the importance of thorough coding of diagnoses to ensure that all applicable Hierarchal Condition Categories (HCC's) for each patient have been identified and coded on the Medicare bill.
Participants in Medicare bundled payment programs want to know when an episode’s claims are “complete”, at which point the episode’s cost can be compared to the target price. Estimating the "claim lag" and completion rates, however, are hampered by the amount of variability in claims payment across episode types and individual episodes. This article will explore those issues and suggest a point at which such estimates can be made.
As described in this Singletrack Analytics blog article, the three target adjustment factors (efficiency, patient case mix adjustment (PCMA), and peer adjusted trend (PAT) can vary widely among hospitals in episode types.
CMS provided BPCI Advanced applicants with an unexpected gift in early July when they announced a "no harm, no foul" bailout opportunity for all participants occurring in March 2019. At that point, participants can retroactively terminate participation in any or all BPCI Advanced episodes, with no financial risk. This gives participants an additional eight months past the August 1 application deadline to evaluate opportunities in various selected episodes.
Most applicants in the Medicare BPCI Advanced program are evaluating participation in various episodes with the goal of achieving financial success by reducing costs in those episodes. Some innovative hospitals, however, are applying an additional criterion for participation in some episodes.
Along with the BPCI Advanced claims data, CMS provided to applicants with an Excel workbook named 2018_05_31_bpid-0000_Baseline_MY_1_2_Prelim_TP.xlsx containing the preliminary targets for all episode types in which the hospital had sufficient baseline episode volume. Those workbooks also contained the three factors that are used to adjust each hospital's baseline cost to compute the final target amount.
Jonathan Pearce, CPA, FHFMA and Coleen Kivlahan, MD, MSPH
(Note - this article was written in 2015 referring to the BPCP program but remains relevant in BPCI Advanced.)
Selecting episodes in BPCI Advanced requires an analytical process in which the opportunities for success are identified and quantified, and pathways for achieving that success can be developed.