Bundled Payments

Bundled Payment for Care Improvement Initiative (BPCI)

The Bundled Payments for Care Improvement (BPCI) Initiative was developed by the CMS Innovation Center as a result of the Affordable Care Act. The purpose is to test innovative payment and service delivery models that have the potential to reduce Medicare, Medicaid, or Children’s Health Insurance Program expenditures while preserving or enhancing the quality of care for beneficiaries.

Participating organizations can be hospitals, skilled nursing centers, inpatient rehabilitation facilities, home health agencies. SVMC and our post-acute partners (Lord Chamberlain and The Jewish Home) are participating providers.

A facilitator (SVHP) is an entity that serves an administrative and technical assistance function in helping participants redesign care. The facilitator does not have an agreement with CMS, bear financial risk or receive payment from CMS. The facilitator assists with financial arrangements made between the participating organization and the convener.

A Convener (NaviHealth) is an entity that bears the financial risk and receives payment from CMS. The Board voted to partner with NaviHealth as our financial convener and therefore, NaviHealth will assume the risk.

On February 14, 2014, CMS announced an expansion of the program to include new hospitals, health systems and provider practices. These bundles will start on January 1, 2015, and are comprised of four broadly defined models of care, depending upon where the episode of care initiated. Reimbursement will be based upon services provided to beneficiaries for that episode of care.

SVMC is looking to participate in MODEL 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care*

The episode of care is initiated at the time of admission to the hospital and includes all related services during the episode. Participants select when the episode of care will end – 30, 60 or 90 days after discharge. Participants select up to 48 episodes of care.

Our Skilled Nursing Facility Partners are looking to participate in MODEL 3: Retrospective Post-Acute Care Only*

A hospital admission triggers the episode of care, however the episode of care does not begin until the beneficiary begins post-acute care services in a skilled nursing center, inpatient rehabilitation facility, long-term care hospital or home health agency. The episode must begin within 30 days of discharge from the hospital. The post-acute provider selects when the episode of care will end – 30, 60 or 90 days and can select up to 48 episodes of care.

*The bundle in Models 2 and 3 includes physician services, care by post-acute providers, related readmissions and related Medicare Part B services. The rate is determined by historical fee-for-service payments minus a discount. Payments to providers are made at the usual fee-for-service rate and then reconciled against the target price. Any savings that is realized is paid to the participant and may be shared among the providers. Any expense that is above the target price is paid back to Medicare by the participant.

The BPCI initiative consists of 2 phases: The first phase is the “preparation” period in which CMS shares data with participants and participants prepare for possible implementation and assumption of financial risk.  Once approved by CMS, the participants can enter into a BPCI Model Agreement with CMS and begin Phase 2.

We are currently in Phase 1-the “preparation” phase.  We will receive data from CMS on all 48 episodes of care.  From this information, we will select the triggering episodes of care.  Because of the overwhelming response to the expansion of the program, participants will have an opportunity to transition into Phase 2, which is known as the “risk-bearing” phase.

On April 1, 2015, we will become accountable for the quality and cost of at least one episode that has been chosen.  In April, July and October 2015, we can transition additional episodes of care. By October 2015, Phase 1 will end and all participants will be in Phase 2.