CMS announces new payment model to improve quality, coordination, and cost-effectiveness for both inpatient and outpatient care

Jan. 10, 2018

The Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center) announced the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced). Under traditional fee-for-service payment, Medicare pays providers for each individual service they perform. Under this bundled payment model, participants can earn additional payment if all expenditures for a beneficiary’s episode of care are under a spending target that factors in quality.

Bundled payments create incentives for providers and practitioners to work together to coordinate care and engage in continuous improvement to keep spending under a target amount. BPCI Advanced Participants may receive payments for performance on 32 different clinical episodes, such as major joint replacement of the lower extremity (inpatient) and percutaneous coronary intervention (inpatient or outpatient). An episode model such as BPCI Advanced supports healthcare providers who invest in practice innovation and care redesign to improve quality and reduce expenditures.

Of note, BPCI Advanced will qualify as an Advanced Alternative Payment Model (Advanced APM) under the Quality Payment Program. In 2015, Congress passed the Medicare Access and Chip Reauthorization Act or MACRA. MACRA requires CMS to implement a program called the Quality Payment Program or QPP, which changes the way physicians are paid in Medicare. QPP creates two tracks for physician payment—the Merit-Based Incentive Payment System or MIPS track and the Advanced APM track. Under MIPS, providers have to report a range of performance metrics and then have their payment amount adjusted based on their performance. Under Advanced APMs, providers take on financial risk to earn the Advanced APM incentive payment.

In BPCI Advanced, participants will be expected to redesign care delivery to keep Medicare expenditures within a defined budget while maintaining or improving performance on specific quality measures. Participant bear financial risk, have payments under the model tied to quality performance, and are required to use Certified Electronic Health Record Technology. By meeting these requirements, the model qualifies as an Advanced APM. The 32 types of clinical episodes in BPCI Advanced add outpatient episodes to the inpatient episodes that were offered in the Innovation Center’s previous bundled payment model (the Bundled Payments for Care Improvement initiative), including percutaneous coronary intervention, cardiac defibrillator, and back and neck except spinal fusion.

The Model Performance Period for BPCI Advanced starts on October 1, 2018 and runs through December 31, 2023. Like all models tested by CMS, there will be a formal, independent evaluation to assess the quality of care and changes in spending under the model.

CMS has the full release

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