Every time we set foot on a plane, we take comfort in knowing the pilot and every member of the flight crew have gone through standardized checklists and processes to ensure we arrive home safely. Likewise, our healthcare teams, led by physicians, need to standardize their processes to come to the best decision for their patients so they can feel that same sense of comfort. Timing and input matters. An ad hoc collection of information simply does not work.

In a 2017 JAMDA study¹ titled “Transitions from SNF to Home: The Relationship of Early Outpatient Care to Hospital Readmission” the authors examined the relationship between early outpatient care and hospital readmissions. They concluded that a home health visit within a week of a patient’s discharge from a skilled nursing facility (SNF) was associated with a reduced risk of 30-day readmission. Though not the focus of their study, they also observed an alarming number of patients, almost half, who did not ultimately return home after their stay in a SNF. Shockingly, after a three-day hospital stay, our seniors have a mere 50/50 chance of returning home if they transition to a SNF. What can we do as clinicians to give our seniors the best chance of returning home?

The optimal next site of care decision is a standardized team approach to the transition of care to home. There are many routes, but only one ultimate destination. After what is for many patients a short trip to the hospital to stabilize medically, most will continue their recovery outside of its four walls. The question then is how we, as a health care team, can work with patients and families to select the best path to safely return a patient home? Does the most efficient and best route include a short stay at a skilled nursing facility? Or does the best choice involve simply receiving care as an outpatient? Perhaps the best level of care involves home health support or hospice care?

There are four crucial strategies care teams can employ to optimize this vitally important next site of care decision:

• The next site of care decision process must be standardized. As a frequent flyer I’m grateful that the flight crew responsible for delivering me to my next site of living have standardized processes and checklists to ensure my safe arrival. Creating and using a consistent structure (whether concurrent or asynchronous) for the NSOC decision ensures that patients will go to the optimal location to continue their care.
• The decision should be a team effort: A 2004 study ² concluded to stay current in their fields some specialists would need to read literature at a rate of 627.5 hours a month. Given the speed at which medical knowledge advances it is challenging for any one member of the healthcare team to stay current in their own discipline, let alone any others . The optimal NSOC decision is derived from a structured team process, led by a physician.
• A cultural shift from discharging a patient from the acute care hospital to transitioning a patient to their NSOC must take place.  With few exceptions, patients admitted to the acute care hospital will recover outside it’s four walls once medically stable. Reframing conversations about ‘discharging’, to where a patient will transition to safely and effectively continue their care is a vital decision. Standardizing the way the team comes together and contributes to this decision is best practice. The decision the team needs to make is where this recovery will continue, which brings us to the final crucial question care teams should ask…
• “Why not home?’ Ultimately, every next site of care decision should include this simple question. An optimal NSOC decision results in the patient transitioning to home, period. Patients who recover at home have lower risk of complications and better patient satisfaction. Even if they’re not able to recover, the vast majority of Americans still want to be in the comfort of their home when they die.

This reform is not out of the reach of any healthcare team—recent results from Remedy Partners’ partners have shown progress in discharging more patients to home. Interdisciplinary care teams at Edward-Elmhurst Healthcare recently looked into their NSOC decision making process with the support of Remedy Partners’ NSOC Gap Analysis. Marcie Lafido, MSN, CNS System Director Care Coordination at Edward-Elmhurst, shared promising results from Edward-Elmhurst Healthcare’s discharge patterns at Remedy Partners’ recent National Innovation Collaborative event.

The results clearly indicated how motivated interdisciplinary teams of clinicians can work together to achieve rapid progress on behalf of their patients. As clinicians, we owe it to our patients to put in the work and consideration to support a home recovery whenever it is medically appropriate.

1. Carnahan JL et al. “Transitions From Skilled Nursing Facility to Home: The Relationship of Early Outpatient Care to Hospital Readmission.” J Am Med Dir Assoc. 2017 Oct 1;18(10):853-859. doi: 10.1016/j.jamda.2017.05.007

2. Alper BS et al. “How much effort is needed to keep up with the literature relevant for primary care?” J Med Libr Assoc. 2004 Oct; 92(4): 429–437

By Steve Wiggins, Founder and Executive Chairman

SUMMARY:

Medicare’s Bundled Payment for Care Improvement (BPCI) initiative is showing powerful evidence to support widespread expansion of bundled payments in the Medicare fee for service program.  Analysis of results from approximately 1,000 Participating health care organizations demonstrates savings to Medicare of $200 million from these early entrants. Savings to Medicare from this group of Participants in the BPCI initiative are currently running at $20 million per quarter.

All Participants in this large cohort show steady improvement over time, providing evidence that a wide range of organization types can succeed in bundled payments. Physician groups, however, achieve the highest savings rates for acute-triggered episodes and reach those savings levels faster than hospitals. Additionally, the 1,000 organizations in this cohort have demonstrated success in both surgical and medical episodes of care. Four in five patients who begin episodes at these 1,000 organizations do so because of an emergency admission to the hospital. This provides encouraging proof of the broad applicability of bundled payments across episode types and dispels the prediction that bundled payments may only succeed with planned surgeries. 

Results from Medicare’s voluntary Bundled Payment program reveal substantial reductions in the number of patients discharged to post-acute facilities, a reduction in the length of stay at those facilities, and fewer patient readmissions following a hospitalization. These utilization results were achieved without a rise in unadjusted mortality among this challenging patient population. Because they are Medicare fee for service patients with an inpatient stay, BPCI patients often have substantial co-morbidities giving rise to a high level of complications during an episode.

These results provide strong support for Medicare’s continuation of the bundled payment program and supports expansion into additional diseases and conditions. They also suggest that population health programs, such as ACOs, would benefit by incorporating bundled payments into their strategies for engaging specialists, as well as for lowering costs and improving outcomes.

Detailed Results:
Estimated Savings to Medicare:
Table 1.

Table 1 displays the net savings, by quarter, for the Medicare Trust Fund. Due to data challenges described below, the savings to Medicare were lower for some quarters than what should be expected in the future. Nevertheless, Medicare saved over $156 Million during the early periods of the BPCI Demonstration from this cohort of Participants.  

The CMS third party vendors managing the BPCI initiative encountered numerous challenges related to the underlying data used to establish baseline prices.  Soon after launching the program, CMS and its vendors realized that baseline prices had been calculated with a large swath of missing claims. This led to a program-wide ‘re-pricing’ of the Target Prices for every episode. Participants were treated financially in the same manner as Track 1 MSSP ACOs for two quarters (Q1 and Q2 2014), with no financial penalty for those organizations without savings sufficient to pay Medicare the guaranteed discount during those quarters. CMS allowed these early participants to review the new benchmark data and determine for which episodes they wished to voluntarily accept full downside risk in subsequent quarters. Those participants, almost exclusively hospitals, moved to full risk in the third quarter of 2014.

Physician Groups were a very small part of the initial enrollment into BPCI. However, CMS had ‘opened the window’ for new entrants during 2014 and a substantial number of physician groups entered the BPCI initiative, with the vast majority of entrants ‘going live’ with full risk programs in the last half of 2015. Unfortunately, the bundled payments program revealed material inaccuracies in the Medicare data base that is used to link physicians to physician groups and to link physician groups to patients. The Internet-based Provider Enrollment, Chain and Ownership System (PECOS) had led to a myriad of inaccuracies in the initial quarterly reconciliations of physician group Participants.

CMMI undertook a complex process to correct the PECOS data base and those corrections effectively led, once again, to a re-pricing of the entire physician group cohort of the BPCI demonstration. CMMI followed its precedent of not punishing Participants for pricing inaccuracies and treated physician groups in the same manner they had treated hospitals, using the Track 1 MSSP ACO approach to not holding participants responsible for losses.

Consequently, savings to Medicare from physician group participants were lower for the six quarters that passed before physician groups were allowed to drop episodes and return to full risk. With the benefit of hindsight, it is now clear that despite the re-pricing of episodes in 2014 for hospitals and again in 2016 for physician groups, Medicare still achieved demonstrable savings that dwarf any other value based payment initiative.

BPCI: Demonstrated success lowering spending

Limitations of this study:

This analysis includes information covering 950 health care organizations participating in Medicare’s BPCI initiative. We estimate this represents over 55% of the entire BPCI participant universe and approximately half of the spending managed under Medicare’s BPCI initiative.

Important information about these 950 organizations:

All organizations operate through a Participant Agreement with Remedy Partners, an Awardee Convener approved by Medicare to participate in the Medicare BPCI initiative. Remedy has a Master Participant Agreement with CMS and acts as the ‘general contractor’, handling analytics, software development and implementations, training and administration of all compliance and reconciliation services.
Over 900 organizations, of the 950, have adopted a common software system that is integrated with their electronic medical record software. The software identifies patients, in real time, who are accreting into a BPCI episode and is a workflow, decision support and patient/caregiver engagement platform that was developed specifically for episodes of care. All Participating organizations have participated in the refinement of their shared software platform.
All 950 participants use a data analytics platform that delivers program level, provider level and patient level metrics and reports that have enabled regular refinements to their programs and enabled leadership interventions for fledgling programs.
All programs were supported by $200 million of working capital funding that was provided by the Awardee Convener to assist in the financing and launch of the local bundled payment programs.
Over 80% of Medicare’s BPCI initiative runs through an Awardee Convener, such as Remedy Partners. An Awardee Convener is a Special Purpose Entity (SPE) that performs the role of general contractor, participant recruiter, primary risk-taking entity, network developer and primary administrator of these relatively complicated programs. Most Awardee Conveners share proportionally in the risk and rewards of these programs, with Participating provider organizations eventually taking the lion’s share of the risk/reward.

ACOs are another form of Special Purpose Entity (SPE) in the population health field. Disease management companies, Independent Practice Associations (IPAs), Management Service Organizations (MSOs) and Physician/Hospital Organizations (PHOs) are other types of SPEs common in commercial insurance and Medicare Advantage programs.

Generally, payer organizations have been unsuccessful in achieving meaningful adoption of at-risk contracting in population health or bundled payments, without SPEs to recruit participants, provide capital and expertise.

Observations of the BPCI initiative:

This analysis suggests that Medicare, through CMMI, succeeded in launching and managing a complicated bundled payment program and has demonstrated success in attracting a large group of participants, lowering health care spending overall, achieving meaningful savings to Medicare, and improving health outcomes.

For those considering launching commercial bundled payments, however, Medicare’s initiative is instructive:

Health care providers prefer to avoid assuming downside risk. Most health care organizations already operate with low margins and many lack the balance sheet stability required to assume risk. Special Purpose Entities are likely necessary to achieve meaningful adoption of bundled payments and to overcome the reluctance, lack of capital and lack of expertise in these complex programs. Awardee Conveners are the Special Purpose entities that drove most of the enrollment in BPCI, garnering over 62% of Participants and a higher share of spending. Awardee Conveners are analogous to ACOs, IPAs, PHOs or other entities in health care who provide the capital, administrative capability, software and analytics to support successful programs. In the case of the cohort studied in this analysis, over $200 Million was invested by the Awardee Convener in the working capital for these programs.
BPCI ‘triggers’ an episode on the basis of a patient’s acute care admission to a hospital. This is due to the limitations of administering a program through 17 different payment contractors. For single payer initiatives, far greater savings and more impactful programs will be achieved by triggering the opening of an episode of care ‘at diagnosis’. Triggering an episode at diagnosis will capture the most important decision points and drive patients and physicians to carefully reconsider many habits that are out of synch with patient need, best practice or greatest efficiency.
BPCI encountered massive challenges with fee for service data that was never collected with the intent of driving episode pricing. This data challenge will be exacerbated in commercial programs where the girth of Medicare’s volumes won’t allow history to guide how prices are set. Combining a wide range of data sources will be required, and new applications of math theorems and deep machine learning will likely improve the accuracy of Target Prices of episodes of care.
Established payment arrangements can conspire against efforts to achieve greater efficiency. The prospective payment methodologies for hospitals (Diagnosis Related Groups) and home health care services (Home Health Resource Groups), used by Medicare, have led to distortions in the incentives they create. Keeping a patient in a hospital a bit longer can drive much lower post-acute costs. Careful titration of home health services and freedom to use these services in ways currently prohibited by CMS would likely unlock further improvements and savings. Likewise, allowing at-risk providers to control other payment arrangements would lead to greater innovation in the use of remote monitoring, telehealth and in-home advance services.
Many bundled payment experts believe that population health programs, such as Accountable Care Organizations, should use bundled payments as the primary vehicle for managing expensive episodes of care. The Medicare performance evidence from the ACO and BPCI initiative would support that view. Proponents view population health strategies as particularly valuable for engaging primary care physicians in the identification of high risk beneficiaries and undertaking strategies to promote health maintenance and disease prevention. Bundled payment programs, on the other hand, are proving to achieve lower costs and favorable outcomes for patients who may have failed this prevention path and require expensive planned or immediate therapeutic interventions. The complexity of cases served by BPCI also supports the suggestion of Michael Porter, Harold Miller and others that bundles may also be appropriate for Chronic Conditions.
Recent studies have shown that ACOs are struggling to generate sustainable savings to share with Medicare.[1] History and experience reinforce these concerns. Widespread failures during the 1990s left many hospitals and physician groups reeling from their initial attempts to accept population-level risk.[2] Managing risk at the population level requires a vast array of cost control strategies and few provider organizations have developed the required expertise to control both ‘incidence’ and ‘performance’ risk.  That is one reason that ACOs are struggling to achieve their potential.

To make further progress, ACOs and their sponsoring organizations will need to adopt sophisticated strategies that tackle all aspects of medical spending. More particularly, as these organizations seek to include specialists and hospital-based clinicians in care redesign, bundled payments will prove especially useful.

Conclusions:

The information disclosed in this Brief provides strong evidence that bundled payments should be a cornerstone of Medicare payment policies. Indeed, they perform better than any other initiative in the history of the Medicare fee for service program. By CBO’s own estimates, Medicare stands to save $46 billion by aggressively adopting this payment model. BPCI has also attracted the largest universe of Participant health care organizations in a payment demonstration, revealing intrinsic acceptance of this approach to organizing and financing health care around a patient’s episode of care.
Population health programs would likely benefit from use of bundled payment strategies and tighter integration between the two complimentary payment models.
Implications for Non-Government Programs

Commercial insurers should piggyback on Medicare’s expanding bundled payment initiative to drive greater use of this payment model for their employer and government programs. For commercial insurance programs, bundles are a better than population health and encourage greater competition among health care providers. They also empower a wider range of organizations to participate and drive innovation.
Commercial insurers also have the ability to overcome the limitations of the Medicare initiative by triggering episodes at diagnosis instead of at acute admission. Commercial plans also have the flexibility to incorporate bundled payments and patient steerage into how they administer prior authorization and design benefit plans. Incorporating bundled payment arrangements into health benefit plan designs holds the potential to accelerate adoption and innovation.
Surprisingly, the federal government has for now assumed the role of the leading innovator in health care payment reform. This is a powerful incentive for private insurers and self-funded employers to take advantage of the momentum created by this payment demonstration.

1 McWilliams JM, Chernew ME, & Landon BE. Medicare ACO Program Savings Not Tied to Preventable Hospitalizations Or Concentrated Among High-Risk Patients. Health Affairs 2017; 36(12):2085-2093.
2 Burns LR & Pauly MV. Accountable Care Organziations May Have Difficulty Avoiding The Failures Of Integrated Delivery Networks of the 1990s. Health Affairs 2012;31(11):2407-2416.

“The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document.”

Earlier this month, CMS launched the Bundled Payments for Care Improvement Advanced program, a new voluntary payment model that will go into effect October 1, 2018. BCPI Advanced, the successor to the Bundled Payments for Care Improvement program of 2013, is the most significant proposal for payment reform from CMS since the beginning of the Trump administration, and indicates the government’s commitment to transitioning toward paying for value rather than volume in healthcare.

BPCI Advanced represents a great opportunity for providers to earn more in Medicare savings reimbursements. Participating in the new program can seem daunting to small specialist groups whose resources are limited, but Remedy Partners can facilitate that process. The CMS application is extensive and requires a series of lengthy explanations on how participants plan to increase practitioner engagement, an overview of organizational readiness and the development of methodologies for sharing savings and regulatory compliance, among many other specifics. We have helped over 700 partners participate in the original BPCI program.

For starters, working with a convener reduces the barriers to entering the program. Completing the application alone would require a substantial lift for a small practice. CMS asks for extensive details ranging from quality improvement strategies to beneficiary protection strategies to ways the practice will ensure regulatory compliance. Instead of having to painstakingly complete these sections, Remedy Partners will handle the application process for our prospective partners, eliminating that burden.

Most importantly, we will handle all of the costs associated with getting a bundled payment program up and running. Rather than having to spend significant out-of-pocket startup and program analysis costs, small practices get the benefit of participating in BPCI Advanced one year before they even receive any revenue from CMS. We essentially finance their participation, and because we only get paid when its partners are paid, it creates a true partnership model. Your success is our success.

In addition to the capital outlays, Remedy Partners also provides a buffer to partners who may have small program sizes. In small programs, there is higher risk of having a poor performance quarter due to one or two outlier episodes. Because we share downside with our partners, we offset the natural volatility of small programs, thus reducing risk.

Beyond cost, there are many operational benefits to Remedy Partners’ scale. For example, our analytics department can take advantage of huge amounts of data from all of its partners in order to create the most accurate regional benchmarks and performance metrics. More data leads to better insights. Our scale also enables us to maintain an analytics staff specialized in dealing with reconciliation and claims data.

The same is true for clinical best practices. Because Remedy Partners works with so many providers across specialties and geographies, our tools for care redesign and improvement have been tested in many different situations. Further, we also host major events for our partners to learn from each other—a way for our partners to collaborate not just with us but also with each other—as well as continuing education through our Transitional Care Institute. These opportunities will be especially valuable for BPCI Advanced given the heightened emphasis on quality improvement and care redesign.

Overall, working with a convener like Remedy Partners makes it easier for small practices to enter the program by removing the costs of exploring participation and entering the program and by easing the application burden. Our experience and scale lead to operational efficiencies, better analytics and clinical tools validated against more data and situations, facilitating the transition to value-based care.

Ready to explore BPCI Advanced with Remedy Partners? Contact us at [email protected] to start a free evaluation of your opportunity in this exciting program!

This question was raised during our webinar Remedy Makes the Application Process Easy. Follow this link to view it now and check out the other webinars in our Success in BPCI Advanced series.

BPCI Advanced, CMS’ successor program to BPCI, comes with new payment and quality rules that can impact how physicians earn MACRA Quality Payment Program bonuses. In the latest installment of our Success in BPCI Advanced webinar series, Remedy Partners’ Chief Medical Officer, Win Whitcomb, MD, MHM, covers the interplay between BPCI Advanced and the new physician payment rules under the Quality Payment Program (QPP).

MACRA substantially changes how physicians are paid by Medicare

The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 made significant changes to how physicians and clinicians were to be paid by Medicare by eliminating the Sustainable Growth Rate (SGR) formula. Instead, Part B payments would be tied to provider performance. As implemented, Medicare refers to “MACRA for physicians” as the Quality Payment Program.

BPCI Advanced qualifies as an Advanced Alternative Payment Model in QPP

There are two payment tracks in the QPP, the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM). Physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists are all subject to the QPP.

MIPS focuses on four core domains to improve care and financial performance: (1) Quality, (2) Resource Use (Cost), (3) Improvement Activities and (4) Advancing Care Information. There is a subcategory known as MIPS APM for providers participating in an APM that do not meet specific revenue or patient thresholds for Advanced APMs. It is expected that most providers will initially fall under MIPS as they will not meet APM participation thresholds in the first years of QPP.

APMs are a payment approach that rewards providers for delivering high quality, cost-efficient care. Advanced APMs are a subset of APMs that let practices earn more financial rewards in exchange for taking on risk related to patient outcomes.

BPCI Advanced qualifies as an Advanced APM and affords hospital-based physicians (hospitalists and hospital-based specialists) the opportunity to participate in an Advanced APM, providing new revenue opportunities and reduced reporting requirements under MIPS.

Advanced APMs protect against increasing penalties present in MIPS

MIPS and Advanced APMs have different impacts on physician fees. Under MIPS, physicians are exposed to potential penalties and incentives of -4 to +4 percent in the fee schedule in 2019 that scale up to -9 to +9 percent by 2022. The positive fee increases are subject to a multiplier to maintain cross-program budget neutrality.

Advanced APMs, however, are exempt from these penalties. In addition, Medicare includes an enticement of a one-time 5 percent lump sum bonus payment based on Part B Medicare activities during a performance year.

BPCI Advanced is a great way for physicians to meet steep APM thresholds

As mentioned earlier, there are specific patient and revenue thresholds providers must meet to quality as an Advanced APM. Specifically, in 2019, participants must have at least 50 percent of Medicare Part B payments or 35 percent of Medicare Part B patients in an Advanced APM. This grows to 75 percent of payments or 50 percent of patients by 2023.

While these thresholds seem ambitious, BPCI Advanced provides a great opportunity to achieve these benchmarks. Taking on large bundle sets in BPCI Advanced will allow physicians and clinicians to access larger patient pools to meet the Advanced APM minimums and reap its financial benefits. Even if physicians participating in BPCI Advanced do not meet the thresholds, they will have a decreased reporting burden than they would in the MIPS track of the QPP.

Remedy Partners has helped over 1,000 partners build, deploy and manage large scale bundled payment programs while achieving unprecedented financial and clinical outcomes. To learn more about your opportunities in BPCI Advanced and how we can help you materialize those improvements, click here and sign up for our upcoming Success in BPCI Advanced webinars.