Tenant Hospitals and Adventist Health join CMS bundled payment program

Tenant Hospitals and Adventist Health, which recently announced a new joint health care campus in Mansfield, TX,  are joining new federal bundled-pay model that seeks to improve patient care while lowering overall costs. With the Bundled Payments for Care Improvement Advanced (BPCI Advance) model CMS will pay providers a fixed amount for an episode of care rather than per procedure or service as with a traditional fee-for-service model.

Under the BPCI Advance model, episodes would start with an initial hospital admission or outpatient procedure and include all care during the next 90 days. Providers will be paid a benchmark price minus 3 percent to achieve cost savings. If they exceed the target price, they could be penalized up to 20 percent of costs, but participants can earn an additional payment if all expenditures for an episode of care are less than a spending target. BPCI Advanced qualifies as an Advanced Alternative Payment Model (Advanced APM) under MACRA, so participating providers can be exempted from the reporting requirements associated with the Merit-Based Incentive Payment System (MIPS).

The program was first announced in January 2018, and runs from October 1, 2018 through December 31, 2023. It will initially include 32 bundled clinical episodes – 29 inpatient and 3 outpatient. It builds off the original bundled payment model BCPI that launched in 2013, but did not result in significant savings according to a new report that was released Tuesday.

The original BCPI program eliminated downside risk to encouraged providers to join and experiment with the new payment model. However, CMS ultimately lost $285 million after it paid out the promised incentive payments. In addition, the program continued to re-set target costs lower, which some called a race to the bottom in quality of care. BCPI Advance eliminates the target cost re-sets, but sets the original target lower at benchmark minus 3 percent versus minus 2 percent in the original program.

In all, 1,299 entities have signed agreements with CMS to participate, including 832 acute care hospitals and 715 physician group practices nationally, 157 of which are located in Texas.