CMS on Thursday announced that the number of hospitals and physician groups participating in Medicare's new voluntary bundled-payment model declined by 16% over the program's first five months.

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Background: CMS launches BPCI-Advanced

CMS announced the payment model, called the Bundled Payments for Care Improvement-Advanced Model (BPCI-Advanced), in January 2018, less than two months after the agency canceled and scaled-back several mandatory bundled payment models created under former President Barack Obama's administration. BPCI-Advanced was the first model introduced under the Trump administration that would qualify as an Advanced Alternative Payment Model under MACRA's Quality Payment Program.

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Under BPCI-Advanced, participating clinicians can receive bundled payments for up to 32 different clinical conditions—including 29 inpatient care episodes and three outpatient care episodes—for which they will be held accountable for cost and quality.

Those payments are paid for retrospective, 90-day episodes of care, and providers are eligible to "earn additional payment if all expenditures for a beneficiary's episode of care are under a spending target that factors in quality," according to a CMS release. CMS said bundled payments for the episodes are "calculated based on the expected costs of all items and services furnished to a beneficiary during an episode of care," and participating providers "may either realize a gain or loss, based on how successfully they manage resources and total costs throughout each episode of care."

The model's first performance period launched Oct. 1, 2018, and is scheduled to run through Dec. 31, 2023. CMS in October 2018 announced that 1,299 entities had signed agreements to participate in the model, including 832 acute care hospitals and 715 physician group practices. CMS said a total of 1,547 Medicare providers and suppliers located throughout 49 states, Washington, D.C., and Puerto Rico had signed agreements to participate in the model.

Providers had until March 1 to withdraw from the model without any penalties. A CMS spokesperson said the agency allowed providers to withdraw without penalties to allow them to "experience the model before making a final decision." The spokesperson said the agency allowed providers "to engage in care redesign, receive preliminary target pricing information, and receive monthly claims data before committing to the model."

Providers withdraw from BCPI-Advanced

CMS on Thursday announced the number of providers participating in BCPI-Advanced has decreased to 1,295, which includes 715 hospitals and 580 physician groups, "Vitals" reports.

CMS said the agency plans to launch a second open enrollment period for the model in April.

Gina Bruno, vice president for clinical strategy at naviHealth who serves as a convener for hospitals participating in the BCPI model, said, "We obviously had some participants leave, but it wasn't catastrophic—it's a testament to these organizations' commitment to value-based care." She added that many providers saw the model as an opportunity to try a bundled payment program with low risk because of the withdrawal period. "I think knowing that they had that get-out-of-jail free card led some to be more ambitious in participation," she said.

Keely Macmillan, general manager of BPCI Advanced for Archway Health, said she expected to see providers withdraw from the model as a whole, or from specific bundled payments under the model. Macmillan said separate changes CMS made to payments for total knee replacement and outpatient surgery likely prompted providers to withdraw from the model (Baker, "Vitals," Axios, 3/22; King/Castellucci, "Transformation Hub," Modern Healthcare, 3/21; Morse, Healthcare Finance News, 3/21).

Resource series: Prepare for success in the world of bundled payments

We've compiled our best resources to help leaders prepare a path to success in the world of bundled payments.

• Build a Stronger Hospital-Specialist Partnership
• 10 Keys to an Efficient Post-Acute Episode
• Capture Value Through Supply Purchasing
• Setting the Standard for Patient Care

• Access the Resources