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CMS Announces Expansion of BPCI

February 21, 2014—The Centers for Medicare and Medicaid Services (CMS) Feb. 14 announced an open period for additional organizations to be considered for participation in Models 2-4 of the Bundled Payments for Care Improvement (BPCI) initiative.  Through this open period, hospitals, post-acute providers, and physician group practices who had not previously participated in BPCI can join the program.

The AAMC currently serves as a facilitator-convener in the BPCI program [see Washington Highlights, Feb 1, 2013] and hospitals will have the ability to join BPCI through the AAMC’s existing convener group.

Episode-based payment bundles Medicare payments for services related to a particular clinical condition for a period of time across multiple providers and suppliers. BPCI tests four models of episode-based payment for 48 clinical conditions.  Each episode includes a family of related MS-DRGs, and episodes are triggered by an acute care hospital inpatient stay for one of the included MS-DRGs.

Model 2 bundles payment for both inpatient and post-acute care for either a 30-, 60-, or 90-day episode; providers are paid fee-for-service throughout the episode, and total payment for the episode is retrospectively reconciled against a predetermined target price. 

Model 3 is also paid retrospectively; Model 3 episodes are for post-acute care only. 

Model 4 bundles only acute inpatient care and related readmissions for 30 days; Model 4 participants are paid a prospective bundled payment amount.

Open period intake forms must be submitted to CMS by April 18 for organizations to be considered for participation.


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806