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Three Reasons to Apply for BPCI

​Applying (by April 18) for CMS’s reopened bundle payment initiative gives hospitals access to unique data sets without the obligation to adopt new payment models.

March 28, 2014

In a Valentine’s Day surprise, CMS announced that it was opening a new round of applications in the Bundled Payment for Care Improvement Initiative (BPCI). Hospitals that weren’t among the initial 467 to request the data to assess this opportunity in 2011 have until April 18, 2014, to submit their request. 

Why is it worth exploring this opportunity at this time? As part of the broader trend away from fee-for-service, this is an opportunity for learning and organizational development. When properly targeted, bundled payment can provide both financial and strategic benefits for hospitals and health systems. There is little risk to assessing the opportunities; there is no requirement to commit to a new form of payment until the organization has evaluated the possibilities for itself. Hospitals and health systems that do so can: 

  1. Gain insight on the episodes of care they are involved in providing, and the opportunities for improvement: Hospitals can do a quick analysis of the unique dataset to assess the opportunities, or perform an in-depth analysis to determine whether they can benefit from bundled payments and how to achieve maximum benefits. Either way, there’s a lot to be learned by doing the evaluation, and you will get some valuable data. Success under bundled payment depends on reducing cost per episode of care. Reducing readmissions and/or skilled nursing facility (SNF) costs (BPCI model 2), appears to offer the greatest opportunity to achieve this, because these areas account for a large percentage of episode cost and vary the most across the country. 
  2. Engage their doctors in addressing cost effectiveness: Active physician participation is key to reducing readmissions, SNF stays, imaging and testing, length of stay and other factors affecting cost per episode. The process of establishing physician ownership of guidelines and protocols starts by involving physicians in data analysis and identification of opportunities. Healthcare systems and hospitals can take advantage of BPCI to engage their physicians in identifying and addressing solutions for issues of clinical cost-effectiveness.  
  3. Be better prepared for the trend away from fee-for-service payment and toward value-based payment: While value-based payment is still predominantly a Medicare phenomenon, it is drawing increasing attention from commercial insurers, and is positioned to become a much more significant part of hospital payment. CMS already has the legal authority to mandate bundled payment for all episodes of care covered by Medicare. BPCI provides an opportunity for hospitals and health systems to determine their organizational readiness for value-based payment, and to start to put required infrastructure in place.