How Can Bundled Payments Be Incorporated Into ACOs?

June 3, 2024
Analysis of overlap between BPCI Advanced and ACO initiatives has health equity implications

A new report says that capturing participant experiences in both the Bundled Payments for Care Improvement (BPCI) Advanced Model and ACO models can help inform how bundled payments might be incorporated into ACOs in the future.

In Model Year 4, the BPCI Advanced Model, which began in 2018 and is scheduled to conclude in 2025, resulted in Medicare program savings for the first time since the model began in 2018, according to a May 2024 report prepared by the Lewin Group Inc. with partners Abt Associates,
GDIT, and Telligen.

Savings were achieved not only for surgical episodes but for medical episodes as well. The report explains that these savings resulted from significant changes to the model in Model Year 4, including a shift from allowing participants to select individual clinical episodes to requiring them to choose broader clinical episode service line groups (CESLGs). There were also changes to the target price methodology, including a retrospective trend adjustment. CMS made these changes after the BPCI Advanced Model resulted in net losses to Medicare in Model Years 1 through 3, which raised concerns that target prices may have been set too high, particularly for medical episodes.

Similar to prior model years, participants lowered episode payments by reducing the share of discharges to post-acute care facilities and payments to these facilities. Not only were initial discharges to PAC facilities reduced, but the length of stay at SNFs also decreased as participants worked with PAC partners to reduce unnecessarily long SNF stays. Hospitals and physician groups reported creating preferred SNF and home health agency networks and working closely with those providers on care protocols. 

Hospitals and physician groups  also reported holding weekly or monthly calls to discuss patient outcomes and review performance data. These partnerships between inpatient providers and PAC facilities are one example of care transformation resulting from the model.

Some interviews with participants in the bundled payment program highlighted potential avenues for CMS to proceed in terms of incorporating bundles into ACOs, the Lewin Group report said. Of model participants that were also participating in Medicare ACOs, some hospitals and physician groups reported advantages to being in both initiatives, including having data covering beneficiary care across all care settings, which could facilitate improvements in patient care. Others expressed frustration with how BPCI Advanced excludes episodes for beneficiaries attributed to certain Medicare ACOs from reconciliation and felt that CMS needed to address these overlap policies.

 In the April 2024 proposed rule updating Medicare payments and policies for inpatient hospitals and long-term care hospitals, CMS proposes the mandatory Transforming Episode Accountability Model (TEAM), which builds on prior bundled payment models, including BPCI Advanced and the Comprehensive Care for Joint Replacement Model, the report explains. “TEAM supports CMS goals of driving accountable care through 30-day episodes and integrating specialty and primary care by requiring hospitals to refer patients with an eligible surgery to primary care following their hospitalization or procedure. In addition, CMS indicated that beneficiaries who receive eligible care from a hospital selected to participate in TEAM may be in an episode regardless of ACO attribution.”

This analysis of overlap between BPCI Advanced and ACO initiatives also has health equity implications. “Our findings suggest that the BPCI Advanced Model reached beneficiaries from underserved populations who were beyond the reach of ACOs, potentially due to differences in underlying patterns of utilization of hospital and primary care services among subpopulations,” the report said. “We found that BPCI Advanced beneficiaries who were not attributed to one of the Medicare ACOs examined were more likely to be from an underserved population than BPCI Advanced beneficiaries who were attributed to a Medicare ACO.”

 

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