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  • Washington Highlights

    CMS Announces New Medicare Voluntary Bundled Payment Model

    Lauren Kuenstner, Healthcare Payment Reform Specialist

    The Centers for Medicare and Medicaid Services (CMS) Jan. 9 announced a new voluntary Medicare bundled payment model titled Bundled Payments for Care Improvement Advanced (BPCI Advanced), which will qualify as an Advanced Alternative Payment Model (APM).

    BPCI Advanced is designed to incentivize providers to deliver higher quality care at a lower cost. The model encompasses 32 different Clinical Episodes, including three outpatient procedures, and will examine the cost of care for each episode from the initiation of treatment and the ensuing 90 days. The program will allow both hospital and physician group practices (PGP) participants. BPCI Advanced is scheduled to launch on Oct. 1 and end Dec. 31, 2023. The deadline to submit applications is March 12, 2018; although an additional application period will open on Jan. 1, 2020.

    The clinical episode list and the seven quality measures (six of which are endorsed by the National Quality Forum) that will be tracked are outlined on the BPCI Advanced website. Under BPCI Advanced, participant financial performance will be retrospectively compared to target prices, which will be based on historical benchmarks minus a three percent CMS discount.

    Additionally, payment will be linked to quality using a pay-for-performance methodology that includes a quality score derived from the aforementioned measures. Initially, CMS will cap the amount by which the quality score can adjust payment at ten percent, although CMS may modify this in future model years. Importantly, participants are required to accept downside risk at the beginning of the program, and payment reconciliation will occur semi-annually. Losses and gains will be capped at 20 percent of the target.

    As this model encompasses a wide variety of procedures and conditions including almost every organ system, it is the most ambitious bundled payment plan to date and once tested may provide a template for future CMS coverage.