Wading into the Pool of Risk Bearing Reimbursement Models


 

Many Alabama providers participated in the Quality Payment Program in 2017, under MIPS (Merit Based Incentive Program). A handful participated in a MIPS APM (Alternative Payment Model), which is a baby step towards alternative payments, but still left the participants free from downside risks. As we pass the half-way point for the 2018 performance period, exploring risk bearing programs is on the rise.

The Alternative Payment Model for which I get the most questions is the Bundled Payment for Care Improvement (BPCI) model. This model requires formal contracts for participation, and the deadline to confirm participation in this model was August 8th, 2018. Historical performance data was recently released and interested parties are scrambling to review all contract options. The BPCI performance period begins October 1, 2018.


BPCI Highlights

In the BPCI model, shared savings occurs when total cost for an attributed episode of care is less than the CMS established target price for the specified clinical condition. The target price is set by CMS annually and reflects historical costs. Target price is standardized by region and may be adjusted to reflect patient acuity.

The total cost for an Episode of Care includes all charges to Medicare for services from the date of procedure/visit (initiation of the Episode) to 90 days post discharge/procedure, regardless if the service is directly related to the initial procedure or provider of care.

If total cost for an Episode of Care is less than the target price, then CMS will pay out the savings (less three percent) to the group or provider for which the episode is attributed. Likewise, if an episode of care is more than the target price, then CMS will expect a payback.

In addition to cost, quality metrics are also assessed, and there could be additional adjustments to payout based on quality performance.

Physician Group Practices, Hospitals and any other providers can participate and determine the level of risk they are willing to take on. It goes without saying, the bigger the risk, the bigger the reward.

In many cases a non-provider will act as a convener for a group, and will be responsible for managing the cost, quality of care, and overall apportionment of savings and/or risk. Conveners will often charge a fee for their services, as well as take a portion of the savings (risks) based on the aggregate of all episodes.

BPCI is considered an Advanced APM, therefore if a provider meets the qualified provider threshold, they could receive the five percent lump sum bonus in addition to shared savings, and be excluded from MIPS.

BPCI seems complicated - why would anyone want to do this?

The release of historical cost data allows providers to compare historical performance against the target price and determine if they are already generating savings.

Providers may identify ways that they can reduce costs, and therefore realize savings. The shared savings payments to providers is in addition to any Quality Payment Program incentives - so the upside is two-fold if the conditions are favorable.

However, there are a few negatives to consider. Often, the cost margins are tight and a small savings identified could convert to a loss with just one poor outcome. Also, convener fees can cut into savings, thereby reducing the potential for additional payment.

The probability of meeting the qualified provider threshold is low. Most providers will still report MIPS under the MIPS APM standard, or can choose to opt out. If they choose to opt out, they won't receive a penalty, however, they won't receive a bonus either.

Once in the program, there is one "out" in March 2019. Beyond that, you would be subject to the program until January of 2020.

If you are interested in BPCI and missed the deadline- no worries, you can choose to participate in the next round which starts in January 2020.


Joni Wyatt, MHS is a healthcare advisor with Kassouf & Co. She has over 15 years of experience in the healthcare industry.

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