Proposed cancellations and revisions to mandatory episode payment models have raised questions about Medicare’s commitment to promoting the adoption of voluntary payment models. However, Remedy Partners knows that they work. The Lewin Group’s Evaluation Report of the Bundled Payments for Care Improvement (BPCI) initiative, the first voluntary episode payment model sponsored by the Centers for Medicare and Medicaid Services (CMS) Innovation Center, highlights some of the early wins and promise of such models. As a partner of providers accounting for more than half of the program’s participants, Remedy Partners believes that these results reflect some of the true value that voluntary episode payment models can deliver to Medicare. As the Innovation Center prepares its 2018 version of the BPCI initiative, these results–as well as Remedy Partners’ experience–suggest the importance of retaining certain model attributes that are essential to supporting a sustainable transition to episode payment models.
Small, Early Sample Shows Costs are Down
The BPCI initiative is the first voluntary episode payment model to be sponsored by the CMS Innovation Center. The model has drawn thousands of participants–hospitals, physicians, skilled nursing facilities and home health agencies–that voluntarily accepted financial responsibility for episodes of care associated with hundreds of different types of hospitalizations. After reviewing data from the first two years of the Initiative, CMS concluded unequivocally that, for the highest volume clinical episodes, provider participation in the model reduces costs and improves patient satisfaction and recovery.
More importantly, the BPCI initiative is empowering physicians to better prepare patients for post-hospital recovery. Physicians are educating patients about the appropriate care in the right setting and partnering with high-quality providers to improve recovery. Providers participating with Remedy Partners have helped patients recover successfully at home, reducing unnecessary institutional post-acute care by more than 35 percent.
CMS’ findings are particularly heartening for those of us hard at work transforming healthcare, especially since the BPCI initiative was a fraction of its current size and included only six months of data at the time it was evaluated. Based on our partnership with hundreds of hospitals, physician groups and skilled nursing facilities, our insights indicate that continued analysis beyond September 2015 will demonstrate a dramatic improvement from these early results. This is because the BPCI initiative did not reach peak participation until late in 2015, and the true impact of these providers’ efforts will not be seen until the 2016 and 2017 data becomes available publicly.
Lessons for Future Voluntary Models
The CMS results raise important questions about the sustainability of episode payment models in the absence of a shared economical infrastructure. Participants achieved success through early investments in data analytics, select partnerships with key post-acute providers and health information technology to span care settings. The working capital requirements, however, weighed heavily on some participants. CMS noted that some hospitals exited the model, citing the expense and difficulty of supporting the resources necessary to manage patients across the continuum of care.
By contrast, third-party risk-bearing entities facilitated strong participation in the BPCI initiative–much as they do in CMS’ Accountable Care Organization (ACO) models. These entities, or Awardee Conveners, allow hospitals, physician groups or smaller institutional providers to reduce the cost care redesign, accelerate the implementation of effective interventions, and aggregate risk at an actuarially responsible level. In particular, third-party entities allow investment in analytics, reporting, software systems, protocols and post-acute care (PAC) networks to be spread across markets, significantly reducing duplication of efforts and costs associated with achieving meaningful care redesign. These partnerships allow for rapid dissemination of best practices across providers and regions, avoiding costly and time-consuming trial by error that delays quality and efficiency improvements.
Further, by taking on a portion of the risk associated with outlier patient episodes, Awardee Conveners allow more direct physician participation in the model, facilitate investment in shared resources and infrastructure and accelerate the adoption of voluntary models across the country—allowing Medicare beneficiaries in both large and small markets to benefit from the BPCI initiative.
In CMS’ report, providers participating alongside these risk-bearing entities acknowledged the value of this partnership. Electing to participate in an episode payment model is just the first step to delivering better care; these entities–in both the BPCI initiative and in the Medicare ACO programs–support providers as they grapple with the challenge of managing diverse business and clinical models within the same organization. We find that, even with this support, it typically takes 12 to 24 months to fully implement care redesign initiatives and up to three years for such initiatives to reach maturity. For future episode payment models, providers need the ability to partner with entities that can provide substantial, up-front investment, despite delayed recognition of results from this change in business models.
CMS’ report concludes that the BPCI initiative has shown cost savings and quality improvement in high-volume clinical episodes. While this is an early study, there is much more to report, especially from physician groups, who entered in late 2015 and represent more than half of the participants in the current BPCI initiative. Future evaluations will reveal efficiency and quality trends that will only continue to accelerate as participation in the model broadens and matures.