APM Issue Brief: Bundled Payments for Care Improvement (BPCI) Overview

February 20, 2018

The Bundled Payments for Care Improvement (BPCI) Initiative, one of the Center for Medicare and Medicaid Innovation’s (CMMI) largest initiatives, promotes improved outcomes, higher quality and increased coordination of care for Medicare beneficiaries by requiring participants to assume financial and performance accountability for an entire episode of care as opposed to separate individual procedures. Participants select of one of three options of episode based payment models tied to admission to an inpatient hospital or post-acute care facility. Each model varies by types of providers involved, the length of the bundle after the hospitalization, and whether payment is prospective or retrospective in nature. BPCI is designed to enhance collaboration across specialties and settings through necessitating information sharing to achieve improved outcomes for an entire episode of care.

Program Purpose: The BPCI Initiative is designed to align provider incentives across specialties and settings. BPCI provides a degree of flexibility in payment approaches to support achieving better outcomes for Medicare beneficiaries.

Duration and Number of Participants

As of December 2017

Each model lasts a duration of three years.

  • Model 1: Concluded at the end of 2016.
  • Model 2: 493 participants
  • Model 3: 696 participants
  • Model 4: 2 participants

Core Care Delivery Elements

Participants must choose one of three payment model options. Each model has core care delivery elements: acute and post-acute care, length of episode, types of conditions, hospitals only or a combination of services provided by hospital, physicians and other practitioners, as well as conveners. Models 2 – 4 require participation in a designated list of up to 48 clinical episodes (non-hospice Part A and B services).

Clinical Episodes Relevant to Cardiology

Of the designated 48 clinical episodes for Models 2 – 4, those relevant to cardiology are acute myocardial infarction, atherosclerosis, automatic implantable cardiac defibrillator generator or lead, cardiac arrhythmia, cardiac defibrillator, cardiac valve, chest pain, congestive heart failure, coronary artery bypass graft surgery, major cardiovascular procedure, pacemaker, pacemaker device replacement or revision and percutaneous coronary intervention.

Participant Eligibility

Inpatient hospitals, physician group practices and post-acute care facilities directly providing care services in a BPCI episode are considered episode initiators (EIs). EIs may participate as BPCI awardees that directly accept financial risk under an agreement with the Centers for Medicare and Medicaid Services (CMS). Awardees may assign their episodes to conveners that participate in partnership with multiple awardees. Conveners act as facilitators for awardees. In this capacity, the convener can provide administrative and technical assistance for the awardees.

  • Model 2: EIs must be acute care hospitals or physician group practices.
  • Model 3: EIs must be physician group practices, skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities or home health agencies.
  • Model 4: EIs must be acute care hospitals. Hospitals, physicians and other practitioners providing services are eligible to receive payment from the amount CMS provides to the awardee hospital.

Payment Model

BPCI consists of three payment model options, two retrospective (Models 2 and 3) and one prospective (Model 4).

Model 2: Retrospective Acute and Post-Acute Care Episode

Episode of care includes a Medicare beneficiary’s inpatient stay in acute care hospital and post-acute care for which participants choose an ending date of either 30, 60 or 90 days after hospital discharge. All providers are paid on a fee-for-service basis. Total expenditures for this episode is later reconciled retrospectively against a bundled payment amount (the target price) determined by CMS. The responsible awardee receives any savings or repays any excess spending. Three-Day Hospital Stay for SNF, telehealth and post-discharge home visit waivers are available.

Model 3: Retrospective Post-Acute Care Only

Episode of care only includes post-acute care with a skilled nursing facility, inpatient rehabilitation facility, long-term care hospital or home health agency. Providers are paid on a fee-for-service basis with retrospective reconciliation against an established target price. Telehealth and post-discharge home visit waivers are available.

Model 4: Prospective Acute Care Hospital Stay Only

Medicare makes a single, prospectively determined bundled payment to the hospital awardee that encompasses all services furnished by the hospital, physicians and other practitioners during the episode of care. The awardee uses this prospectively determined amount to pay individual providers. The episode of care spans the entire inpatient stay. Physicians and other practitioners submit “no-pay” claims to Medicare and are paid by the hospital out of the bundled payment.

Beneficiary Notification

BPCI participants and provider partners are required to give beneficiaries written notification explaining BPCI, the beneficiary’s right of access to medically necessary services and the beneficiary’s right to choose any provider or supplier of items or services.

Quality Metrics and Reporting

Models 2 – 4: Metrics are drawn from the existing value-based purchasing and quality reporting programs for the applicable provider.

Last updated Jan. 29, 2018.