Health Information Management

News: Providers reluctant to join bundled payment initiatives, analysis says

CDI Strategies, December 23, 2015

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Some providers who entered bundled payment programs in their initial phase are more reluctant to continue to participate when they have financial risk, according to a new analysis conducted by Avalere Health.

As of October 1, 2015, 1,500 providers are participating in CMS’ voluntary Bundled Payment for Care Improvement (BPCI) program, according to the report. BPCI is a program in which hospitals, physician group practices, and post-acute care providers accept clinical and financial risk for patients over specified time frames.


Episodes are 30, 60, or 90 days long and providers are responsible for all clinical care provided to the patient over those timeframes. Prior to October 2015, participants could test conditions but not be responsible for spending above the target price, says Avalere. Participants received access to Medicare claims data and target prices.

CMS allows participating providers to select episodes to test from a group of 48 clinical conditions, Avalere says, which range from procedures to medical conditions. On average, each participant is testing episodes for nine unique clinical conditions.

The four most commonly tested conditions are lower extremity joint replacement, pneumonia, chronic obstructive pulmonary disease, and congestive heart failure, according to the analysis. These top conditions represent about 18% of the 14,000 bundles in the demonstration. The diversity of conditions and participants will provide CMS with substantial information on the impacts of bundled payments as they review the demonstration results.

After the first phase of the program, CMS began introducing downside risk for the participants. As a result, only about 25% of the original participants elected to remain in the program. However, the experience could help prepare them for future alternative payment models, the report says.

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