Major Changes Coming to BPCI Advanced Clinical Episodes, Prices

CMS is making major changes to Bundled Payments for Care Improvement (BPCI) Advanced next year to stop the model from generating financial losses of close to $2 billion over the model’s ten performance periods.

For Model Year 4, which begins on January 1, 2021, CMS’ Innovation Center will alter target price calculations using an adjusted retrospective element, require participants to chose clinical episode groups versus individual episodes, address clinical episode overlap, remove the physician group practice offset, and alter risk adjustment for major joint replacement episodes.

The changes to the BPCI Advanced model are “designed to improve target price accuracy for both CMS and model participants,” Brad Smith, Deputy Administrator and Director of CMS’ Innovation Center, said in an email obtained by RevCycleIntelligence.

Smith also indicated that the future bundled payment models would be mandatory to counter the selection effects observed in BPCI Advanced Model Years 1 and 2.

The recent changes, however, could negatively impact participation in the BPCI Advanced next year, especially considering the ongoing global pandemic.

“Some organizations will choose to exit the model, and this has been a pretty popular model so far. But there's a lot of uncertainty in the world and most organizations do not have an appetite for additional financial risks right now,” said Theresa Dreyer, the value-based care lead at the Association of American Medical Colleges (AAMC).

The new process of selecting clinical episodes by group puts more dollars on the line, Dreyer explained.

Most participants will need to take on more clinical episodes under the new requirement, increasing the amount of risk involved with model participation. That is especially true if the clinical episode groupings are complicated.

“We also have a little bit of concern with the groups,” stated Aisha Pittman, VP of Policy at Premier, Inc. “Are they the right groups of episodes? Do they really, truly target similar care teams? If you're adding something that similar, it might just be expanding your interventions or making slight tweaks. But if it's an episode that's touching very different care teams, then that's rolling out whole new interventions.”

Some of the groupings appear to mesh at first glance. For example, CMS created a group of different kinds of joint replacements. But not all groupings are so similar.

The medical and critical care group, for example, may pose a problem for BPCI Advanced participants, especially since it contains one of the most popular clinical episodes.

The group combines sepsis, COPD, and pneumonia, which work well together in terms of clinical interventions. But the group also includes renal failure and UTIs, which do not necessarily track with the other clinical episodes in the group.

Sepsis is already one of the most commonly adopted episodes in BPCI Advanced despite being a really complicated condition to treat. Now, the episode is even more complex because providers will have to think about the other clinical episodes tied to it, Dreyer reported.

“I think we're going to see real declines in the number of people that sign up for sepsis,” Dreyer said.

The timing of the changes may also prompt some participants to exit the model.

“In October, participants will get data and then we'll have to sign agreements in November. It's already a very tight turnaround, especially if you're going to add episodes to stay with the episodes that you're already in,” Pittman stated.

Additionally, providers will be stuck with the episodes they chose for Model Year 4 for the next three years.

“That is our concern, that it's going to require too much effort or having too little time to really think through what your best strategy is before having to sign an agreement,” Pittman said.

The other major change to BPCI Advanced – the retrospective trend adjustment – is less concerning to policy experts despite Smith’s emphasis on the change’s ability to reduce model losses in the long term.

It is hard for the experts to say how the new trend method will impact target prices though. Some participants may have benefitted from a purely prospectively set target price, but the change could make target prices fairer moving forward.

The new target price methodology could, for example, account for changes in utilization caused by COVID-19 while still using the favored prospective calculations, Dreyer stated.

But BPCI Advanced participation is likely to fall under all the changes in Model Year 4, even though the number of clinical episodes in the model could still increase since the remaining participants will take on groups of clinical episodes.

But CMS seems to have a plan to encourage participation.

The announcement of an upcoming mandatory bundled payments model could be the agency’s incentive to get participants to stay in BPCI Advanced, Dreyer hypothesized.

“Under the logic, it's better to participate now at the voluntary and develop the clinical buy-in, develop staffing and the infrastructure to be successful before it becomes mandatory,” Dreyer said.

CMS has already indicated that it may not learn much from the BPCI Advanced model.

The model’s first evaluation report released earlier this summer showed that results are unlikely to translate to other providers despite greater participation rates compared to BPCI.

The model’s voluntary nature may be the culprit, the report stated.

“Because the hospitals chose clinical episodes for which they had higher episode payments, they stand a better chance of reducing episode payments than they would have with lower episode payments,” it stated. “Similarly, PGPs may make strategic choices in the TINs to use for billing purposes to boost their chances of achieving NPRA [Net Payment Reconciliation Amounts].”

“All of these factors will make it challenging to generalize the results of BPCI Advanced to a larger or different group of participants,” authors of the report stressed.

A mandatory bundled payment model is the Innovation Center’s logical next step, Smith stated in the email.