Deirdre Baggot Discusses Bundled Payments and What To Expect From the Next Alternative Payment Model in 2018

deidre baggot, bundled payment expert and former expert reviewer

According to Deirdre Baggot, a bundled payment expert, on October 1, 2018,  the Centers for Medicare and Medicaid will commence the next Alternative Payment Model – an unveiling that’s among the year’s biggest events in value-based payments.  While the value agenda has been a bit ambiguous over the last 18 months, it is important to remember that the Medicare Access and CHIP Reauthorization Act of 2015 passed with overwhelming bipartisan support suggesting no lack of commitment on CMS’ part to test and scale new payment models. MACRA created the Quality Payment Program that:

  • Repeals the Sustainable Growth Rate formula
  • Changes the way that Medicare rewards clinicians for value over volume
  • Streamlines multiple quality programs under the new Merit Based Incentive Payments System (MIPS)
  • Gives bonus payments for participation in eligible alternative payment models (APMs)


What is an APM?

Alternative payment models include quality and total cost of care measures in the reimbursement. Advanced APMs go further, offering higher revenue in exchange for providers taking on risk based on patient outcomes.

Advanced APMs that qualify under MACRA mean physicians are eligible for a 5% Part B bonus payment from 2019 to 2024 and 0.75% fee-for-service (FFS) conversion factor (CF) update from 2026 onwards.


Quality Program Patient Volume Requirements:


What is a Bundled Payment?

With a bundled payment, a payer (CMS in this case) remits a single fixed payment for all of the care and services related to a specific patient condition over a pre-determined time period.  If doctors and hospitals provide care that is less costly than the pre-determined price, doctors, hospitals, and post-acute providers may get paid more than they are historically paid under fee-for-service.  If doctors, hospitals and post-acute providers deliver care that is more costly than the bundle price, doctors and hospitals may be paid less.

Why BPCI-A Qualifies As An APM

The Bundled Payments for Care Improvement-Advanced Initiative meets the three criteria to qualify as an Advanced APM:

  • Use of certified EHR technology
  • Payments are based on quality measures similar to MIPS requirements
  • Participants bear more than a nominal amount of financial risk

Payment under BPCI-A, a voluntary bundled program with two-sided risk, will be tied to performance on quality measures. BPCI-A includes 29 inpatient and 3 outpatient episodes. In BPCI-A, there will be only one risk track and the episode will be 90 days in duration. Each year, CMS will use a process to determine if physicians in a bundled payment program qualify for the 5% bonus payment by examining patient counts and payment thresholds.

The first date for QP determination is March 31, 2019.

Key BPCI-A Dates

BPCI-A Timeline:

Source CMS, 2018

While BPCI-A has many similarities to BPCI-Classic, there are a number of new and noteworthy program features.

Source: CMS, 2018


Why Providers Need to Adopt BPCI-A

In the area of payment reform, between 2012 and 2016 the percent of CMS payments to providers caring for patients in Alternative Payment Models went to from zero to 30 percent, representing $200 billion dollars.

Over the last two years, fee-for-service payments only accounted for 37.2% of provider reimbursement and that number is expected to drop to 26% by 2021, only to be replaced by alternative payment models.

With traditional fee-for-service, providers are paid separately based on the claims that they submit, which can lead to over-testing and over-treating. Under a bundled payment, doctors, hospitals and post-acute providers are incented to provide care that is more efficient and more effective.

With CMS moving decisively to more quality- and risk-based payment models, providers must adapt and adapt quickly. Bundles are the fastest, lowest-risk way to accelerate the move to a value-based care delivery and payment model. BPCI-A also includes a strong financial incentive:  If a physician group participating in BPCI-A meets the QP threshold for either the payment or patient amount for a single snapshot, then all eligible physicians that are part of the group’s BPCI Advanced program will receive the 5% bonus payment for that year and avoid MIPS adjustments.

BPCI-A Quality Measures

CMS has selected seven quality measures for the BPCI Advanced model.

Two of them will be required for all clinical episodes:

  • All-cause Hospital Readmission Measure (National Quality Forum [NQF] #1789)
  • Advance Care Plan (NQF #0326)

The other quality measures that will apply to various clinical episodes are:

  • Perioperative Care: Selection of Prophylactic Antibiotic: First or Second-Generation Cephalosporin (NQF #0268)
  • Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary

Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550)

  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following

Coronary Artery Bypass Graft Surgery (NQF #2558)

  • Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (NQF #2881)
  • AHRQ Patient Safety Indicators (PSI 90)


Top 5 Most Commonly Selected Clinical Episodes in BPCI-Classic

Signing up for risk that an organization is not ready to manage is not a formula for success

Make sure that the episodes you ultimately take risk on are ones that your organization demonstrates the highest level of quality, cost effectiveness and patient engagement with. Success at the outset is critical if your organization is going to scale beyond BPCI-A , so get it right out of the gate.

Deirdre Baggot,PhD, MBA, RN is the former lead of the Acute Care Episode Program, for St. Joseph Hospital in Denver. Dr. Baggot is also a former expert reviewer for the Bundled Payments for Care Improvement Program, CMS. Deirdre has also contributed several research papers on Nursing, for the University of Colorado.

Find Deirdre Baggot’s other articles on Bundled Payment systems on Slideshare.


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