By: Natalie Cheng

May 11th 2021

Today, delivering high quality patient care is tougher than ever with a pandemic still going on. Hospitals and healthcare organizations are being pulled in a multitude of directions including treating COVID patients, administering vaccines, dealing with existing patients, and those that may now just be returning after delaying treatment because of the pandemic. So how do hospitals maintain quality and access to care for patients while reducing spending?

Bundled Payments in Healthcare

One way is to participate in a bundled payment program. What are bundled payments in healthcare? According to The Hospitalist, “Bundled-payment programs provide a single payment to hospitals, doctors, post-acute providers, and other providers (for home care, lab, medical equipment, etc.) for a defined episode of care. A single price for an episode of care is determined based on historical performance, factoring in all the services one wishes to include in a bundle (e.g. hospital, doctor visits in hospital, home physical therapy, follow-up doctor visits, follow up X-ray and labs for a defined time period). If the hospital, doctors, and others in the bundle generate new efficiencies in care (e.g. due to better care coordination, less wasteful test ordering, or lower implant/device costs), the savings are then distributed to these providers.” An example of a bundled payment program is BPCI, which is now BPCI Advanced. According to Medical News Today, the program was “developed to potentially improve patient care and lower Medicare healthcare costs. In this program, organizations entered a contract with Medicare for payment arrangements based on accountability for performance and finance.”

BPCI Advanced Program

One program that Medicare providers such as hospitals, physician groups, post-acute facilities, and non-providers can participate in is the Bundled Payments for Care Improvement Advanced (BPCI Advanced). The BPCI Advanced model is “a new iteration of the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (Innovation Center) continuing efforts in implementing voluntary episode payment models. The model aims to support healthcare providers who invest in practice innovation and care redesign to better coordinate care and reduce expenditures, while improving the quality of care for Medicare beneficiaries. BPCI Advanced qualifies as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.”

The first group of participants started in October 2018 and the Model Performance Period will run through December 2023. The second group started January 2020.

The provider payment model is still undergoing testing, but can potentially improve patient care and lower Medicare healthcare costs.

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