Blog Post

Is Your Organization Ready to Participate in BPCI Advanced?

Bpci Advanced 7 31 19 Web

CMS has offered a second application period for organizations considering participation in BPCI Advanced. Many organizations have submitted the nonbinding application to receive detailed claims data that will provide valuable insight into organizational performance across the 37 inpatient and outpatient episodes, as well as post-acute performance. The claims data is scheduled to be provided by CMS in September. Participation decisions are due in November, creating a limited amount of time to review the data.

Organizations considering participation in BPCI Advanced should evaluate participation from both a strategic and a financial perspective before making the decision to enroll in the program.

Strategic Fit

Before an organization receives the claims data from CMS, it should evaluate its strategic fit for participation in BPCI Advanced. Many organizations begin by looking at the broader program-level fit, then focusing on service line strengths and/or episodes that may be of interest or show financial opportunity. We have outlined some of the key components that would help determine the extent to which BPCI Advanced is a strategic fit for an organization.

Organizational Readiness

Organizations that have experience with value-based payments or want to learn more about these programs are in the best position to participate. These organizations may already have value-based contracts in place or be in the process of developing such contracts. We find that these organization typically place a high strategic priority on participating in and learning from value-based payment models. A bundled payment program like BPCI Advanced provides an opportunity to focus on a targeted population over a short period of time (admission/procedure plus 90 days), while having a clear understanding of the financial risk and opportunity.

Physician Alignment

BPCI Advanced allows organizations to share any savings in the bundled payment with participating physicians through a contractual gainsharing arrangement. Such arrangements provide physicians with quality and financial incentives that encourage them to meet organizational, operational, and quality metrics by improving care and reducing costs (Medicare spend). If any service lines could benefit from increased physician alignment, implementing the gainsharing model is a good opportunity to strengthen the service line and enhance your physician strategy.

Post-Acute Collaboration

Post-acute care is a critical component of the BPCI Advanced program, as all episodes include financial risk for 90 days postadmission or procedure. Selecting the optimal post-acute setting for the patient will ensure the appropriate and most cost-effective level of care and reduce costs. Participation in BPCI Advanced requires an organization to understand its post-acute network and effectively manage care throughout that network. Often, organizations need to develop a preferred network using measurable data such as quality ratings, length of stay, readmission, etc. in order to evaluate performance. BPCI Advanced offers an opportunity to develop more collaborative working arrangements with post-acute care providers.

Information Management

To understand performance in BPCI Advanced, organizations will need to collect and analyze financial, operational, and quality data. Information management capabilities that allow for reporting of key information will help leaders manage patients and providers more effectively. Organizations will need to take a multidisciplinary approach to organizing input and participation from multiple functional areas, including quality, IT, and data analytics.

Financial Aspects of Episode Selection

Once an organization receives claims data from CMS, it can begin to review and analyze the information. This review will assist in making an informed decision regarding which episodes to select. Considerations include:

  • Volume of episodes.
  • Readmissions and post-acute utilization.
  • Episode cost compared to target price.

Volume of Episodes

Of the 37 clinical episodes, CMS will only consider those with sufficient volume, which is defined as a minimum of 41 episodes initiated at the hospital over a four-year base period. Even if it meets the minimum threshold of 41 episodes, an organization could view a particular episode as being low volume, with greater financial risk and not enough financial opportunity.

Readmissions and Post-Acute Utilization

Organizations will also need to consider post-acute utilization and the corresponding spend in their episode selection process. The data typically reveals that total post-acute care cost represent 50% to 80% of the total spend. One could view these higher post-acute care costs as a risk or as an opportunity to manage these patients and reduce the utilization. In ECG’s experience, organizations with a defined and aggressive post-acute care management strategy are having good success with BPCI Advanced.

It is critically important to partner with skilled nursing facilities and inpatient rehabilitation centers that focus on achieving reasonable lengths of stay and reduced hospital readmissions. BPCI Advanced participants have an opportunity to develop operational and quality metrics with post-acute care provides aimed at reducing unnecessary utilization and spend while improving quality.

Episode Cost Compared to Target Price

Finally, organizations will need to select episodes in which they are confident they can achieve a lower cost compared to the target price. The financial consideration is key, as it will determine the likelihood that an organization will have a spend below the target price, generating a financial surplus under BPCI Advanced. Episode cost compared to target price can be evaluated historically through the CMS claims data, which contains three years of data.

Balancing Strategy and Financial Factors

Organizations are likely to be prepared in some areas and not as prepared in others, as per the opportunities and risks outlined above. A comprehensive review of both the strategic and financial factors will assist an organization in determining its preparedness for BPCI Advanced. ECG views the episode selection process as both a financial and strategic exercise. Therefore, organizations that take the time to complete a comprehensive review of the key strategic and financial factors will be in the best position to successfully participate in BPCI Advanced.