Bundled Payments, Value Based Healthcare, Mandatory Bundles,, Medicare, EPM

Medicare Delays Mandatory Bundled Payments; Expansion of Voluntary Bundles Unaffected

The Medicare program delayed again its mandatory bundled payment models. This announcement, however, does not change CMS's commitment to the Bundled Payments Care Improvement (BPCI) initiative and its successor model in 2018. Specifically, CMS delayed by three months the effective dates of both the mandatory cardiac EPM programs and the expansion of the CJR model. CMS requests comment on delaying until January 2018 these effective dates.

This development highlights what we've heard from the Trump Administration: mandatory models should not be a priority for driving adoption of value-based care. Notably, the Administration sees value in voluntary bundled payment models. During his Confirmation hearing, Secretary Tom Price stated he's a strong supporter of BPCI – a voluntary bundled payment model – and highlighted the role of the CMS Innovation Center in sponsoring pilot programs.

To give a sense of scale, Remedy manages 57% of BPCI, which covers $10 billion in medical spend. Mandatory programs cover about $2.5 billion in medical spend across the country, equating to roughly 100,000 episodes.

Sustainable value-based programs require investments from multiple stakeholders spanning service lines and settings. Single-bundle models like the Mandatory EPMs limit providers' willingness to invest in care redesign efforts and triage patients based on than clinical diagnoses rather than payer status. The option to take risk on a larger number of episodes – in the clinical service lines in which a provider excels – engages multi-disciplinary teams of clinicians and is more likely to drive systemic change.

The transition to value-based care is happening. Together, we are making significant strides in healthcare reform through episodes of care. The breadth of our partner relationships give us unique perspective on what’s achievable: we support active programs in 585 hospitals, 426 skilled nursing facilities, and 67 home health agencies, covering nearly 300,000 episodes annually and representing approximately $5.7 billion of Medicare spending. Gross savings rates for the early adopters have grown steadily since 2014, reaching 9.2% in Q2 2016. For the participants who joined the initiative in late 2015, gross savings have reached 7.3% as of Q2 2016.

The BPCI initiative is now more than three-years-old, with two years remaining for most participants. Evaluations demonstrate that providers who effectively leverage data analytics, post-acute provider relationships, and technology are in a better position to achieve the quality and efficiency goals. Above all, we believe that the key to improving patient outcomes and access to quality, affordable care stems from active, ongoing collaboration. And voluntary bundled payment models – not mandatory ones – will do just that.

Tagged: Bundled Payments, Value Based Healthcare, Mandatory Bundles,, Medicare, EPM