Participants in New Value-Based Bundled Payment Model Announced

October 11, 2018
Policy Snapshot

On October 9, the Centers for Medicare & Medicaid Services (CMS) announced that 1,299 entities have signed agreements with the agency to participate in the administration’s Bundled Payments for Care Improvement (BPCI) – Advanced Model. The participating entities will receive bundled payments for certain episodes of care as an alternative to fee-for-service payments that reward only the volume of care delivered. Model participants include 832 Acute Care Hospitals and 715 Physician Group Practices – a total of 1,547 Medicare providers and suppliers, located in 49 states plus Washington, D.C., and Puerto Rico.

“To accelerate the value-based transformation of America’s healthcare system, we must offer a range of new payment models so providers can choose the approach that works best for them,” said CMS Administrator Seema Verma. “The Bundled Payments for Care Improvement – Advanced Model was the Trump Administration’s first Advanced Alternative Payment Model, and today we are proud to announce robust participation. We look forward to launching additional models that will provide an off-ramp to the inefficient fee-for-service system and improve quality and reduce costs for our beneficiaries.”

Under the traditional fee-for-service payment system, Medicare pays providers and suppliers for each individual service they perform.  However, under this new episode payment model, participants can earn an additional payment if all expenditures for a beneficiary’s episode of care are less than a spending target, which factors in measures of quality. Conversely, if the expenditures exceed the target price, the participant must repay money to Medicare.

The BPCI Advanced Model was publicly announced in January 2018; it runs from October 1, 2018, through December 31, 2023. It builds on the BPCI Initiative, which ended on September 30, 2018. BPCI Advanced initially will include 32 bundled clinical episodes — 29 inpatient and three outpatient. Currently, the top three clinical episodes selected by participants are major joint replacement of the lower extremity, congestive heart failure, and sepsis.

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