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CMS Bundled Payments Initiative: Will the Risk Pay Off?

Posted in Affordable Care Act, Home Healthcare, Hospitals and Institutions, Legislation and Public Policy, Medicare and Medicaid, Reimbursement Matters

On August 13, the Centers for Medicare & Medicaid Services (CMS) announced that more than 2,100 participants in the Bundled Payments for Care Improvement (BPCI) initiative have transitioned from the Phase 1 preparatory period to the Phase 2 risk-bearing implementation period.

The BPCI, introduced in the Affordable Care Act, is designed to test whether bundled payments can reduce Medicare’s costs while maintaining or improving the quality of care. CMS required all BPCI participants to transition to at least one episode of care under a risk-bearing agreement by July 1 in order to remain in the pilot program.

According to CMS’s BPCI fact sheet, there are 360 Awardees (entities with contracts with CMS) and 1,755 Episode Initiators (healthcare providers that initiate clinical care and have partnered with Awardees). The breakdown of these participants by provider type is: 441 physician group practices; 423 acute care hospitals; 1,071 skilled nursing facilities; 101 home health agencies; nine inpatient rehabilitation facilities; and one long-term care hospital.

But will the gamble by these participants in agreeing to assume risk pay off in terms of improved quality, enhanced care coordination and decreased cost? The results of the most recent analysis of the BPCI, conducted on behalf of CMS in February, were inconclusive, partly due to small sample sizes. In one year from now, we will see whether the participants transitioning to the risk-bearing phase have been able to implement the changes necessary to successfully manage outcomes and costs under the bundled payment methodology.

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