The Time to Act is Now: The Medicare Bundle Payment Program

In this month’s article, we are placing a significant focus on the need for cardiovascular programs to become aware of and understand available opportunities regarding the Medicare bundle payment program, as well as any exposure their program may face. At the time of this writing, the second of two windows is open, but it will have closed on June 24th. Whether or not your program signed up, it is still possible to obtain and understand your data around any or all of your cardiovascular programs. Ryan Graver, VP of Market Access and Commercial Development, recently joined the Terumo Business Edge team. Below, he talks about the very real need for programs to gain insight and understanding into their program data. It is worth the read and definitely worth following up on.  —  Gary Clifton, Vice President, Terumo Business Edge

Bundled Payments – Are You at the Table?

There is a saying that goes, “if you’re not at the table, you risk being on the menu.” June 24, 2019 has come and gone, and programs across the country have voluntarily enrolled (or chose not to enroll) in order to participate in the Bundled Payment for Care Improvement (BPCI) Advanced program. This was the second enrollment period for BPCI and cardiology was acknowledged with yet another opportunity, with this cohort now including transcatheter aortic valve replacement (TAVR). It is an exciting step toward more value-based payment models. The voluntary BPCI Advanced program allows facilities and or physicians to manage risk associated with a 90-day episode of care and potentially increase revenues by managing the cost of care below a target price. For Medicare, the program “bundles” together hospital, physician, and post-acute spending into that lower target price with the goal of reducing overall spending.

Over the last 90 days, Terumo Business Edge has engaged hundreds of facilities in an effort to educate them about the BPCI Advance program, the opportunities it offers, and how we are helping providers prepare for and succeed in managing bundled payments. Through these interactions, dozens of programs shared that they were part of the initial BPCI Advance program, and unfortunately, a very common theme emerged from these discussions: not a single cardiovascular service line director, cath lab leader, or physician had seen their performance data, nor was a single leader involved in optimizing their program’s performance in the bundles. We heard responses such as “it was a system decision”, “someone in leadership is managing that”, or “that information hasn’t trickled down to my level yet.”

While it was encouraging to hear that many programs had taken the steps necessary to participate in the BPCI Advanced program, it was shocking to hear how consistently disengaged from the program the actual team managing day-to-day care actually is thus far.

Bundles became a part of the healthcare lexicon in 2010 when the Affordable Care Act was signed into law, wherein bundled payments were included as part of the risk-based payment models designed to decrease Medicare spending. To date, there have been multiple bundled payment programs introduced since 2013.

First rolled out in 2013 (Figure 1), the BPCI Model 1 concluded in December 2016; however, Models 2, 3, and 4 were extended into 2018. The other ongoing models — the Comprehensive Care for Joint Replacement (CJR) Model and the Oncology Care Model — will be active through 2020. It is important to note that the CJR program was made mandatory for approximately 800 hospitals across the United States. The Episode Payment Models (acute myocardial infarction [AMI], coronary artery bypass grafting [CABG], and Surgical Hip and Femur Fracture Treatment [SHFFT] models) and the Cardiac Rehabilitation Incentive Payment Model were slated to begin in 2018, but the Centers for Medicare & Medicaid (CMS) canceled these models before they started; note that CMS has publicly stated that they will be rolling out additional mandatory bundled payments, slated to begin in 2020. And finally, those programs that recently acknowledged interest in participating as part of the second enrollment that closed June 24, 2019 will begin their BPCI Advanced program October 1, 2019 and it will run through 2023.

Do We Have Results Yet?

BPCI Model 1 achieved very modest net savings, approximately $10 million over two years.¹ Notably, Medicare spending on care following hospitalizations was higher for the test episodes than for the comparison group and most hospital participants ultimately withdrew; the model has ended.

Of the other BPCI models, the most prevalent is BPCI Model 2, spanning hospitals, physicians, and post-acute providers. In its first two years, this model generated statistically significant Medicare savings per episode for Total Hip and Knee Replacement. Medicare has reported that the savings in this category was $1273 per episode, relative to a comparison group. While the other 22 clinical categories did not have statistically different spending from their comparison groups, among the 10 clinical categories with the highest number or episodes, spending generally trended lower than their comparison groups per episode.

For the newer model, the CJR model, which is mandatory for 800 hospitals and focused on hip and knee replacements, Medicare spending results are limited. Analysis of CMS data shows that in the first year of the program, about half of the hospitals received “reconciliation payments” indicating that they received added payments from Medicare because their spending was below their target benchmark in 2016. Reconciliation payments totaled $37.6 million, averaging $1134 per episode. Spending information has not been made available for hospitals that did not receive reconciliation payments.

Total Joint Replacement is of specific interest to CMS because it is both high volume and data would suggest that there is significant variability in 90-day cost and quality, representing significant opportunity to reduce overall spending. Likewise, cardiovascular procedures are both high volume and possibly represent greater variability. CMS has been vocal that cardiovascular procedures are high on their target list for advancing payment reform. Of specific note, cardiovascular patients have significantly greater post-acute spending. Learning from what has worked with orthopedic patients, such as increasing home health spending while decreasing skilled nursing, may represent opportunities for those pursuing cardiovascular bundles.

Why Do You Need a Seat at the Table?

Hopefully, program leaders are no longer debating whether Medicare will actually move forward with these risk-based payment models. They are here, they are real, and they are going to accelerate. Physicians, service line leaders, and cath lab leaders must be part of optimizing your group’s performance in this effort. You must understand how you are being measured, how much risk you are managing, what you are being benchmarked against, and each month, as CMS releases data, you must track your progress against your program’s goals.

The Figure 2 dashboard shows an actual hospital’s performance by physician for percutaneous coronary intervention (PCI), utilizing historic CMS data from 2Q-17 through 2Q-18. This hospital’s performance and each physician can be benchmarked against the regional target, which is how CMS sets a facility’s target price. In this example, the hospital has a 29% 90-day readmission rate versus the regional benchmark of 24%, but it is also important to drill down and understand why providers may vary from 11-50%.

Your program’s care processes or care pathways directly impact how you discharge your patients, where they go, and how much they cost. It may be useful to start identifying patients who could avoid a readmission through the use of a home health visit or those patients who could avoid the use of a skilled nursing facility (SNF). There is a new way that we will be paid and ultimately, a new way that we must manage our programs.

What to Do Next?

Terumo Business Edge is exclusively focused on helping cath labs optimize their care pathways and has now partnered with Archway Health, a CMS convener. Together, we are working directly with providers seeking to manage their bundled payment program. Archway has built an industry-leading analytics platform allowing providers access to their data, curated and updated nearly immediately after CMS releases their program’s performance. In addition to data services, there are multiple risk management offerings that include full risk sharing all the way to stop-loss products that allow providers to manage their downside while capturing more of their upside.

We are encouraged that these programs are beginning to take full shape in the market. Providers that engage in and focus on managing the BPCI program have shown that it can contribute millions in incremental revenue. If your program signed up for the voluntary BPCI Advanced program and you are managing your own risk, we would welcome the opportunity to help you succeed. We encourage every program and program leader to get educated, get involved, and make sure you don’t end up on the menu. Whether you did or didn’t sign up for the bundles, working with Terumo Business Edge and Archway can help you understand what your service line risk is today. To do nothing may not be the best option. Tomorrow could well bring mandatory bundles. Would your program be ready? 

1. Side-by-Side Comparison: Medicare Bundled Payment Models. Medicare Delivery System Reform: The Evidence Link. Henry J Kaiser Family Foundation. Available online at https://www.kff.org/interactive/side-by-side-comparison-medicare-bundled-payment-models/. Accessed June 10, 2019.