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. 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.Aims
Methods
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. 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.Introduction
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