Aims. There is concern that aggressive target pricing in the new Bundled Payment for Care Improvement Advanced (BPCI-A) penalizes high-performing groups that had achieved low costs through prior experience in bundled payments. We hypothesize that this methodology incorporates unsustainable downward trends on Target Prices and will lead to groups opting out of BPCI Advanced in favour of a traditional fee for service. Methods. Using the Centers for Medicare and Medicaid Services (CMS) data, we compared the Target Price factors for hospitals and physician groups that participated in both BPCI Classic and BPCI Advanced (legacy groups), with groups that only participated in BPCI Advanced (non-legacy). With rebasing of Target Prices in 2020 and opportunity for participants to drop out, we compared retention rates of hospitals and physician groups enrolled at the onset of BPCI Advanced with current enrolment in 2020. Results. At its peak in July 2015, 342 acute care hospitals and physician groups participated in Lower Extremity Joint Replacement (LEJR) in BPCI Classic. At its peak in March 2019, 534 acute care hospitals and physician groups participated in LEJR in BPCI Advanced. In January 2020, only 14.5% of legacy hospitals and physician groups opted to stay in BPCI Advanced for LEJR. Analysis of Target Price factors by legacy hospitals during both programmes demonstrates that participants in BPCI Classic received larger negative adjustments on the Target Price than non-legacy hospitals. Conclusion. BPCI Advanced provides little opportunity for a reduction in cost to offset a reduced Target Price for efficient providers, as made evident by the 85.5% withdrawal rate for BPCI Advanced. Efficient providers in BPCI Advanced are challenged by the programme’s application of trend and efficiency factors that presumes their cost reduction can continue to decline at the same rate as non-efficient providers. It remains to be seen if reverting back to Medicare fee for service will support the same level of care and quality achieved in historical bundled payment programmes. Cite this article: Bone Joint J 2021;103-B(6 Supple A):119–125

Introduction. Bundled Payments (BP) were a revolutionary new experiment for CMS that tested whether risk sharing for an episode of care would improve quality and reduce costs. The initial success of BP accelerated their growth as evidence by the launch of both mandatory and commercial bundles. Success in BP is dependent on the target price and the opportunity to reduce avoidable costs during the episode of care. There is concern that the aggressive target pricing methodology in the new model (BPCI-Advanced) penalizes high performing groups that already achieved low episode costs through prior experience and investment in BP. We hypothesize that this methodology incorporates unsustainable downward trends on target prices to a point beyond reasonableness for efficient groups to reduce additional costs and will lead to a large percentage of groups opting out of BPCI-A in favor of a return to fee for service (FFS) reimbursement. Methods. Using CMS data, we compared the target price factors for hospitals that participated in both BPCI classic (2013 –2018) and BPCI Advanced (beginning 10/2018), referred to as “legacy hospitals”, with hospitals that only participated in BPCI Advanced (beginning 10/2018). With the rebasing of BPCI-A target prices in Jan 2020 and the opportunity for participants to drop out of individual episode types or the program all together, we compared the retention of episode types that hospitals initially enrolled at the onset of BPCI-A with the current enrollment in 2020. Locally, we analyzed the BPCI-A target price factors across hospitals for a large orthopaedic practice that participated in BPCI Classic and the impact it had on the financial incentive/disincentive to remain in the lower extremity joint replacement episode type in 2020. Results. At its peak in July 2015, 423 acute care hospitals participated in one or more episode type in BPCI Classic. At its peak in March 2019, 715 acute care hospitals participated in one or more episode types in BPCI-Advanced. 130 (18%) of the hospitals in BPCI Advanced were also legacy participants in BPCI Classic, enrolling in 414 of the same episode types during both programs. In 2020, 251 (61%) of the episode types that hospitals were in enrolled in for both BPCI Classic and BPCI Advanced were dropped, suggesting prior experience in BPCI influences a participant's opportunity for success in BPCI Advanced. Furthermore, an analysis of the target price factors for episode types enrolled in by legacy hospitals during both programs suggests that prior participation in BPCI Classic is correlated with more aggressive target prices. A comparison of target price factors of similar hospitals reveals that legacy BPCI Classic hospitals that participated in lower extremity joint replacement (LEJR) BPCI Advanced received a larger negative adjustment on the target price (0.11 lower on average as a product of the Peer Adjusted Trend factor and ACH Efficiency factor) than non-legacy hospitals that participated in BPCI Advanced. Furthermore, analysis of the hospital targets for a large, high-performing legacy Physician Group Practice in BPCI Classic for LEJR revealed even greater negative adjustment on the target price than non-legacy participants. Comparing participants of similar peer groups on the Peer Adjusted Trend and ACH Efficiency factors suggests that CMS expects costs to decline more for legacy hospitals that have achieved efficiency than hospitals with no prior BP experience and higher baseline spend. Conclusions. BPCI Advanced provides little to no opportunity for a reduction in cost for already efficient TJA providers, as evident by the 55% dropout rate for BPCI-A participants in LEJR between model years 1 and 3. Efficient TJA providers in BPCI Advanced are challenged by the program's utilization of a peer adjusted trend factor and efficiency factor that presumes their costs will decline at the same aggressive rate or more than nonefficient TJA providers. It remains to be seen if reverting to Medicare fee for service will support the same level of care coordination, cost and quality achieved in historical TJA bundled payment programs

Aims. The purpose of this study was to determine the impact of the removal of total knee arthroplasty (TKA) from the Medicare Inpatient Only (IPO) list on our Bundled Payments for Care Improvement (BPCI) Initiative in 2018. Methods. We examined our institutional database to identify all Medicare patients who underwent primary TKA from 2017 to 2018. Hospital inpatient or outpatient status was cross-referenced with Centers for Medicare & Medicaid Services (CMS) claims data. Demographics, comorbidities, and outcomes were compared between patients classified as ‘outpatient’ and ‘inpatient’ TKA. Episode-of-care BPCI costs were then compared from 2017 to 2018. Results. Of the 2,135 primary TKA patients in 2018, 908 (43%) were classified as an outpatient and were excluded from BPCI. Inpatient classified patients had longer mean length of stay (1.9 (SD 1.4) vs 1.4 (SD 1.7) days, p < 0.001) and higher rates of discharge to rehabilitation (17% vs 3%, p < 0.001). Post-acute care costs increased when comparing the BPCI patients from 2017 to 2018, ($5,037 (SD $7,792) vs $5793 (SD $8,311), p = 0.010). The removal of TKA from the IPO list turned a net savings of $53,805 in 2017 into a loss of $219,747 in 2018 for our BPCI programme. Conclusions. Following the removal of TKA from the IPO list, nearly half of the patients at our institution were inappropriately classified as an outpatient. Our target price was increased and our institution realized a substantial loss in 2018 BPCI despite strong quality metrics. CMS should address its negative implications on bundled payment programmes. Cite this article: Bone Joint J 2020;102-B(6 Supple A):19–23

Introduction. The purpose of bundled payment programs is to reduce cost via risk sharing, while still maintaining quality. If savings are achieved under a historic target price, the orthopedic surgeon will receive a monetary bonus. If costs are higher, a portion is deducted from payment to the orthopedic surgeon. The purpose of this study was to evaluate our experience with the Bundled Payments for Care Improvement Program (BPCI) when run by an orthopedic surgeon group to determine patient safety and who benefited the most financially. Methods. This program ran from January 2015 through September 2018. 3,186 Medicare total hip and knee replacements, elective (DRG 470) and for fracture (DRG 469), performed by our group were included. 90 day hospital and all postoperative expenditures were reconciled against our historic cost. All patients were medically optimized with discharge plans established preoperatively. We developed preferred skilled nursing facilities and home health care agencies with synergistic medical providers so that discharges were recommended as soon as appropriate. We hired two full-time case managers to have direct contact with patients pre-and post-operatively. Waiver assistance such as house and pet sitters were used if necessary at our expense. 35% of savings went to the convener, who acted as a liaison between our group and CMS. Expenditures for the 90-day period for all patients were calculated to determine where savings occurred and which entity benefitted financially. Results. There was an average 9.2% reduction in hospital readmissions. An estimated total savings of $5,100,000 occurred. There was a 17% reduction in hospital costs, a 12.1% reduction in admissions to skilled nursing facilities with a 34% reduction in length of stay, and a 5% reduction in admissions to inpatient rehabilitation facilities. There was a 35% reduction in home health visits, but no change in outpatient physical therapy visits. After group expenses, final bonus to the orthopedic provider was on average $262 per patient. Conclusion. The physician managed program was very successful from Medicare's standpoint, achieving significant monetary savings without reducing quality of care. However, the bonus to the providing and managing physicians was nominal. It also does not take into consideration the 50 plus hours spent in meetings to develop this program. Participation could be considered a defensive posture so as not to lose more reimbursement. However, experience was gained which will be valuable for future gain sharing programs. Physicians and physician organizations need to sit at the head of the table to manage future payment bundles and perhaps also act as the convener. We deserve this, as a result of demonstrating high safety and cost savings. For figures, tables, or references, please contact authors directly