More providers are taking part in Medicare’s largest bundled-payment model relative to its predecessor, but the results of the demonstration probably won’t carry over to a larger or different group of providers because participants choose whether and how to participate, CMS’ Center for Medicare & Medicaid Innovation said in a report Friday.
According to the CMS Innovation Center, about 22% of eligible hospitals took part in Bundled Payments for Care Improvement Advanced during the first six months of the demonstration. That rate dropped to 13% for BPCI Advanced-eligible hospitals that participated in the earlier BPCI model. Rural and safety-net hospitals were significantly more likely to take part in BPCI Advanced than BPCI, as were physician group practices. About 23% of eligible clinicians participated in the new payment model.
“The broader experience across providers with bundled payment, and value-based payment more generally, may have expanded the group of providers willing to accept risk under the model,” CMMI said in the report.
But the agency is concerned that the lessons learned from the demonstration won’t transfer to a different population of providers because hospitals choose whether to join the model and for which episodes. Providers told the CMS Innovation Center “that they decided to join the model and chose particular clinical episodes based on their assessment of the financial opportunity” and to gain experience with bundled payments. Hospitals were more likely to participate in a clinical episode if they had higher historical episode payments.
“Because the hospitals chose clinical episodes for which they had higher episode payments, they stand a better chance of reducing episode payments than they would have with lower episode payments,” CMMI wrote.
Providers’ decision to take part in BPCI Advanced wasn’t influenced by its status as an advanced alternative payment model, or Advanced APM, even though it offers providers a 5% bonus payment and reduced reporting requirements.
According to CMMI, hospitals and group practices tend to choose different clinical episodes. The agency speculated that their choices might differ based on what costs they think they can control.
The CMS Innovation Center also said physician groups create and bill under different tax identification numbers, or TINs, to improve their odds of receiving financial rewards. Under the model, physician group practices can often earn more money by creating a new TIN because of how the agency calculates target prices.
Many providers created new physician group practices to participate in BPCI Advanced. According to the CMS Innovation Center, 28% of the TINs in BPCI Advanced did not exist during the baseline period used by the agency to calculate target prices.
Likewise, clinicians can bill Medicare under multiple TINs to separate claims for patients with lower expected episode payments from those with higher expected payments. The practice is legal, but almost certainly reduces the cost savings of the demonstration.
“Creating new TINs may have been a BPCI Advanced participation strategy for some PGPs,” CMMI said.
The agency also said it couldn’t compare participating practices to all eligible practices because it’s so easy for clinicians to switch practices and for physician group practices “to form or be dissolved.” That will make it tough for CMMI to evaluate the effectiveness of the model.
Many experts claim the CMS Innovation Center hasn’t achieved sizable cost savings because too many of its pilots are voluntary and poorly designed. A small number of targeted, mandatory models with well-designed financial incentives would be a better approach, industry insiders say. Experts also want the agency to invest more resources in evaluating the effectiveness of its existing demonstrations rather than continually pursuing new models. The pilots’ purpose is to transform the healthcare delivery system, not to test models, experts say.