Key Takeaways:

• The Bundled Payments for Care Improvement Advanced Model (BPCI Advanced) has been extended for two years, through December 31, 2025, with the opportunity for new entities to join the model beginning in 2024.
• The model is a Medicare fee-for-service model operated by the Center for Medicare and Medicaid Innovation (CMMI) that involves participants taking on accountability for the cost and quality of care during certain defined Clinical Episodes, which could be triggered by either an inpatient stay or outpatient procedure.
• Current participants in the model include both convener and non-convener participants; however, entities applying to begin model participation beginning in 2024 must be Medicare-enrolled acute care hospitals (ACHs) and physician group practices (PGPs), or Medicare Accountable Care Organizations (ACOs).
• Concurrent with the model extension, CMMI announced certain changes to the model’s financial methodology to take effect in 2023.

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On October 13, 2022, CMS announced it will extend the Bundled Payments for Care Improvement Advanced Model (BPCI Advanced) for two years, with the opportunity for new entities to join the model beginning in 2024. CMS also announced certain changes to the model’s financial methodology to take effect next year. 

Background

BPCI Advanced is an Advanced Alternative Payment Model (Advanced APM) under the Quality Payment Program (QPP). It was created by the Center for Medicare and Medicaid Innovation (CMMI) to test whether linking payments for a Clinical Episode to the cost and quality of care can incentivize healthcare providers to reduce Medicare expenditures while maintaining or improving care quality. Clinical Episodes are defined as either an inpatient stay or an outpatient procedure and include all non-excluded clinical laboratory services, durable medical equipment, physician services, Part B drugs, skilled nursing facility services, inpatient rehabilitation facility services, long term care hospital services, home health agency services, and hospice services. 

Under the model’s financial methodology:

• A Clinical Episode is triggered by an inpatient stay (anchor stay) or outpatient procedure (anchor procedure)
• Care during the episode is paid for under Medicare fee-for-service
• The Clinical Episode is attributed to a model participant
• After each performance period, quality and cost performance on each attributed Clinical Episode is assessed to determine whether the participant has earned a Net Payment Reconciliation Amount or owes CMS a Repayment Amount

Participants in the model include both convener participants and non-convener participants. A convener participant does not need to be a Medicare-enrolled provider or supplier and instead brings together downstream episode initiators – namely physician group practices (PGPs) and/or acute care hospitals (ACH) – to participate in the model. A non-convener participant must itself be a PGP or ACH. 

As of December 31, 2021, more than 1.2 million Medicare beneficiaries have received care from participants in the BPCI Advanced Model, and more than 1,800 ACHs in coordination with 69,867 physicians have engaged in care redesign activities under the model. 

Extension and Model Changes

The BPCI Advanced Model was launched on October 1, 2018, and was originally set to end on December 31, 2023, but will now end on December 31, 2025. As part of extending the model, CMS will also issue a Request for Applications (RFA) to solicit a third cohort of model participants to begin participation in the model on January 1, 2024. Applicants are limited to Medicare-enrolled ACHs and PGPs, as well as Medicare Accountable Care Organizations (ACOs), although existing convener participants may participate in the model’s two-year extension (2024-2025). Both convener participants and non-convener participants active during model year 6 (2023) will have the opportunity to continue to participate in the model during the extension period by signing an amended and restated Participation Agreement for model year 7 (2024).

CMS is also making the following financial methodology changes to the model for model year 6 (2023):

• Reducing the CMS Discount for medical Clinical Episodes (as opposed to surgical Clinical Episodes) from 3% to 2%, making it easier for participants to earn an NPRA on these episodes
• Reducing the Peer Group Trend Factor Adjustment cap for all Clinical Episodes from 10% to 5%, limiting the impact of peer group trends on the Target Price calculation
• Modifying the major joint replacement of the upper extremity Clinical Episode to include outpatient total shoulder arthroplasty procedures, such that the Clinical Episode can be triggered by either an inpatient anchor stay or outpatient anchor procedure 
• Holding participants accountable for all Clinical Episodes in which the beneficiary has a COVID-19 diagnosis during the Clinical Episode. This was based on concerns that the historical exclusion of Clinical Episodes when the beneficiary had a COVID-19 diagnosis led to reduced episode volume

Law Clerk Tyrus Jackson also contributed to this alert.