Many hospitals and health systems nationwide have applied to the Centers for Medicare & Medicaid Services' (CMS’s) BPCI-Advanced, a new voluntary bundled payment program that reinforces CMS’s commitment to bundles as important alternative payment models.
Guidehouse's managing director, Donna Cameron, and associate director, Dr. Nicole Fetter, provide HCB News with their insights on what’s next for BPCI-Advanced applicants, and ways they can ensure their organizations maximize participation in this and other value-based programs.
HCB News: What should BPCI-Advanced applicants expect next?
Donna Cameron: CMS has promised to send historical claims data and target prices to applicants sometime in May. With the Aug. 1, 2018, deadline for participation agreement and bundle episode selection rapidly approaching, organizations will have less than three months to analyze the data and determine if they want to move forward with the program and under which bundles.
These are critical decisions since BPCI-Advanced holds substantial risk for participants from day one that can translate into substantial savings or losses. With 20% stop-loss and stop-gain limits for the first two years of the program, identifying which bundles represent the best savings opportunities is critical.
HCB News: Why should an organization pursue bundles through BPCI-Advanced?
Nicole Fetter: BPCI-Advanced provides organizations with a great opportunity to begin or continue moving towards value-based care. Success in bundles requires development of such capabilities as data analytics, physician engagement, post-acute preferred partner networks, and care continuum integration. All of these attributes are important for organizations as they begin or continue their transition from fee-for-service toward fee-for-value.
HCB News: What are key levers to consider when identifying which bundles pose the greatest opportunity and least risk?
NF: Through our work with clients on BPCI and the Comprehensive Care for Joint Replacement model, we’ve identified the following essential attributes for success:
The first one is actionable benchmarking data. Analyzing data you get from CMS will tell you how many historical episodes performed better than target price and the areas where spend was the greatest, such as hospitalization, post-acute care, or readmissions. However, that information alone is not sufficient to determine which bundles are the most actionable. Benchmarking such drivers of spend as skilled nursing facility (SNF) average length of stay, SNF and home health utilization, and 90-day readmission rates helps organizations better understand not only where the opportunity lies, but the magnitude of the opportunity. Guidehouse provides our clients with regional and national benchmarks for a variety of post-acute and readmission metrics, helping them choose bundles which align with their strongest capabilities.
Another essential attribute for success involves the level of physician engagement. Assessing which clinical areas have strong physician champions or leaders is a great first step in understanding your level of physician engagement. To enhance physician engagement, organizations should focus on active change management combined with thoughtful gainsharing models. Communication and transparency regarding performance and potential gainsharing also influences engagement for ongoing performance improvement.
DC: We’ve also found volume of episodes to be important as well. There is no single “right” volume threshold, but understanding where the proper balance is helps minimize the risk of outliers. For example, hospitals which are Episode Initiators must have 41 or more episodes in the four-year baseline period to be eligible to participate in a clinical episode. This translates to 10 episodes per year, which is very low. While organizations may think such low-volume bundles provide a safe transition into value-based care, we have found them to be very volatile. That said, one or two well-performing episodes can offset small losses in other episodes for an overall savings. Of course, this means that the opposite can also happen – small gains over most episodes can be wiped out by a large loss on just a single episode.
Finally, episode type is important because not all episodes are created equal. For instance, lower and upper extremity joint replacement episodes are mostly elective, while percutaneous coronary intervention is a mixture of elective and emergent. And then there are surgical fixation of hip/femur fractures, which are all urgent or emergent. Furthermore, some episodes are medical, and some are procedural. Each of these “types” has advantages and disadvantages.
HCB News: How many different bundles or clinical episodes should organizations pursue?
DC: There isn’t an exact or right number; instead, selection should be tailored to each organization based on their level of experience and existing capabilities. We encourage organizations to start with a few prioritized bundles where they are most set up for success and which best align with their strengths. Additional bundles can be added once an organization has built foundational capabilities. CMS has already announced that BPCI-Advanced will accept a second cohort starting on Jan. 1, 2020. Therefore, organizations should take this initial 15-month period to build those capabilities on a few initial prioritized bundles, and consider expanding with the second cohort.