Practice Management

Understanding the new CMS bundle model

BPCI Advanced enables hospitalists to work in Advanced APM


Hospitalists have been among the highest-volume participants in Medicare’s Bundled Payments for Care Improvement (BPCI) demonstration model, initiating over 200,000 episodes representing $4.7 billion in spending since the model began.1 On Jan. 9, the Centers for Medicare & Medicaid Services announced BPCI’s follow-on model, “BPCI Advanced.”2

BPCI launched in October 2013 and sunsets at the end of Q3 2018. BPCI Advanced starts immediately upon conclusion of BPCI (Q4 2018) and is slated to finish at year-end 2023.

CMS intends for the program to qualify as an Advanced Alternative Payment Model (APM). As BPCI Advanced focuses on episodes of care involving an inpatient stay (It also includes three outpatient episodes.) and the subsequent 90-day recovery period, it represents the first large-scale opportunity for hospitalists to meet criteria for Advanced APM participation. Qualifying for the Advanced APM track of the Quality Payment Program – which involves meeting patient volume or payment thresholds3 – comes with a 5% lump-sum bonus based on Medicare Part B fees and avoids exposure to penalties and reporting requirements of the Merit-based Incentive Payment System (MIPS).

Key program features

Acute care hospitals and physician groups may initiate episodes under BPCI Advanced, assuming financial risk under the model. Similar to its predecessor, BPCI Advanced assigns a target price based on past claims payments associated with the “episode initiator.”

During the performance period, if the initiator can beat the price in the aggregate for its bundles, it can keep the difference, and if it comes in over the price, it must pay the difference back to Medicare. Medicare discounts the target price by 3%, effectively paying itself that amount. After that, there is no sharing of savings with Medicare, as opposed to the permanent ACO programs, where there is sharing after the ACO meets the minimum savings rate.

The program allows physician groups and hospital initiators to go it alone or to work with a “convener,” which may share risk and reward with initiators, and may provide software, analytics, networks of high-performing providers like nursing facilities, and knowledge of specific care redesign approaches to enable program success. See Table 1 for a listing of other notable features of BPCI Advanced.


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