When Should Medicare Mandate Participation In Alternative Payment Models?

The Centers for Medicare and Medicaid Services continues to propose and implement alternative payment models (APMs) to shift Medicare payment away from fee-for-service and toward approaches that emphasize health care value. As APMs expand in scope, one critical question is whether they should engage providers on a voluntary or a mandatory basis. Clinicians and policy makers may view the benefits and drawbacks of these two modes of participation differently. In this Analysis we compare the benefits and drawbacks of mandatory and voluntary participation, based on clinical versus policy perspectives, and we argue that both modes are necessary for APMs to achieve the goal of improving value. Policy makers should match the mode of participation and related financial incentives to each clinical scenario in which an APM is implemented. We propose ways to coordinate mandatory and voluntary APMs based on clinical scenarios.

Bundled Payments for Care Improvement: Boom or Bust?

BACKGROUND

As early implementors of the Centers for Medicare and Medicaid Services (CMS) Bundled Payments for Care Improvement (BPCI) initiative, our private practice sought to compare our readmission rates, post-acute care utilization, and length of stay for the first year under BPCI compared to baseline data.

METHODS

We used CMS data to compare total expenditures of all diagnosis-related groups (DRGs). Medicare patients who underwent orthopedic surgery between 2009 and 2012 were defined as non-BPCI (n = 8415) and were compared to Medicare BPCI patients (n = 4757) who had surgery in 2015. Ninety-day post-acute events including inpatient rehabilitation facility or subacute nursing facility admission, home health (HH), and readmissions were analyzed.

RESULTS

The median expenditure for non-BPCI patients was $22,193 compared to $19,476 for BPCI patients (P < .001). Median post-acute care spend was $6861 for non-BPCI and $5360 for BPCI patients (P < .001). Compared to non-BPCI patients, BPCI patients had a lower rate of subacute nursing facility admissions (non-BPCI 43% vs 37% BPCI; P < .001), inpatient rehabilitation facility admissions (non-BPCI 3% vs 4% BPCI; P = .005), HH (non-BPCI 79% vs 73% BPCI; P < .001), and readmissions (non-BPCI 12% vs 10% BPCI; P = .02). Changes in length of stay for post-acute care were only significant for HH with BPCI patients using a median 12 days and non-BPCI using 24 days.

CONCLUSION

The objective of BPCI was to improve healthcare value. Through substantial efforts both financially and utilization of human resources to contain costs with clinical practice guidelines, patient navigators, and a BPCI management team, the expenditures for CMS were significantly lower for BPCI patients.