Preparing for BPCI Advanced: Unique Physician Alignment Opportunities

As the Bundled Payments for Care Improvement (BPCI) model sunsets on September 30, 2018 and makes way for BPCI Advanced on October 1, 2018, it’s important for health systems and provider groups across the country to understand how this new voluntary program addresses episode precedence rules – especially in relation to the Comprehensive Care for Joint Replacement (CJR) program.

For physician group practices (PGPs) that are currently participating in the original BPCI model for the Major Joint Replacement of the Lower Extremity condition in CJR markets, the PGP “owns” the bundle, meaning the joint replacement episodes are attributed to the original BPCI PGP. However, with the end of the original BPCI model and the start of BPCI Advanced, these PGPs will no longer own the episode. Instead, it will be owned by the CJR hospital.

What This Means for BPCI Orthopedic Group Participants in CJR Markets

• Loss of control. The PGP will no longer be viewed by the Centers for Medicare & Medicaid Services (CMS) as the Episode Initiator for the bundle. This means the PGP will no longer be eligible to receive Net Payment Reconciliation Amount (NPRA) payments from CMS (or be on the hook for negative NPRA payments back to CMS). Therefore, many PGPs will lose a revenue stream and might be interested in exploring a gainsharing arrangement with CJR hospitals (since episodes will be attributed to the CJR hospital) to earn any portion of the future NPRA payments distributed by CMS.
• Financial repercussions could be significant. The CMS cap on gainsharing payments to physicians as compared to directly receiving the full CMS NPRA amount as PGP Episode Initiators means participating physicians will be limited to a maximum gainsharing distribution payment of 50% of their professional fees billed to CMS. Although the 50% gainsharing cap exists in both BPCI and CJR, the unearned gainsharing funds will stay with the CJR hospital, severely limiting the overall amount of savings available to those PGPs currently acting as the Episode Initiator under the BPCI model.
• The shift may challenge the physician-hospital relationship. If an agreement cannot be reached that meets the PGP’s expectations related to gainsharing dollars, hospitals that have historically had to cede control in the bundle to the PGP due to BPCI precedence rules now could be seen as shutting the physicians out, which may harm overall growth and collaboration for both parties.

Merging Bundled Payment and Co-Management Models

This unique issue in CJR markets requires a merged bundled payment gainsharing/service line co-management approach to not only maintain physician alignment, but also expand upon the bundles program to accelerate overall service line growth.

Service line co-management agreements have been in place for several years and often focus on improving financial, operational and quality performance. As episode precedence shifts from PGP under the original BPCI model to hospitals under CJR, the time is ripe for hospital administration and physician leaders to come together to evaluate and strengthen their alignment for a “win-win” scenario.

Functionally, there are unique elements associated with bundles and service line co-management alignment models that allow them to be additive to each other.

By blending bundled payment gainsharing agreements with service line co-management agreements, hospitals are able to offer PGPs the opportunity to participate in some portion of the gainshare via bundles (albeit it at a lower amount via the 50% cap) simultaneously with a service line co-management model.

Three Keys to Optimizing Your Aligned Bundle and Co-Management Model

1. Recognize that gainsharing and co-management would be two distinct contracts with the PGP, incenting the physicians for different activities.
2. Avoid double paying physicians between the two programs.
3. Understand that co-management is a service line-wide effort, thus could be broader than the bundled payment effort. It can involve multiple groups and sub-specialists (hand, sports medicine, etc.), which may not currently have access to any other incentive or alignment vehicle.

Crafting an alignment model that incorporates both bundled payment gainsharing and service line co-management agreements can create a sustainable, multi-year, multi-group, service line-wide alignment platform for hospitals to build on their competitive advantage in the market.

For more on how to achieve success in bundled payments, and BPCI Advanced in particular, download our white paper: Ready, Risk, Reward: Keys to Success in Bundled Payments.