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Understanding the BPCI Advanced Targets

DATE: April 16, 2018

In February, CMS issued preliminary target specifications for the Bundled Payments for Care Improvement (BCPI) Advanced program.  The targets in CMS bundled payment programs have progressed from straightforward, provider-specific, historical performance-based targets in original BPCI, to regional historical targets stratified by patient diagnosis in the Comprehensive Care for Joint Replacement (CJR) program, to case mix-adjusted, beneficiary-specific targets in the Oncology Care Model (OCM).

In the BPCI Advanced program, CMS has taken the experience from prior programs and included aspects of each in response to industry requests to include case mix and peer group adjustments.

CMS is continuing to adjust the CMS payments used in the target calculations for wage differences, quality, and rural add-ons to isolate payment differences due to utilization.  In BPCI Advanced, all episodes within a clinical episode category will receive the same target, since Medicare Severity-Diagnosis Related Group (MS-DRG) and Ambulatory Payment Classification (APC) are included as patient characteristics in the risk-adjustment model.

CMS is performing multiple regressions to adjust provider-specific historical episode payments for patient characteristics and spending trends within provider-specific peer groups.  The final list of adjustments and their level of influence are not yet known, but CMS has indicated inclusion of characteristics such as hierarchical condition categories, age, dual eligibility, and mix of DRG or APC triggered episodes within a clinical episode category.  The provider’s case mix-adjusted baseline payments will then be adjusted for a combination of peer group characteristics like teaching/non-teaching, urban/rural status, safety-net hospital, census division, and bed size.

The resulting number is a baseline payment adjusted for historical patient case-mix and peer group influences.  An additional adjustment is then made to control for a provider’s historical efficiency compared to the nation.  This means that if a provider is historically “low-cost,” its target will be lower than if it were historically “high-cost.”

The baseline will be trended forward to performance year dollars using a trend factor specific to the hospital peer group and any Medicare Prospective Payment System payment changes.

All of these calculations, in addition to the 3% discount factor, will be included in the preliminary targets expected in May.

It is important to note the final targets will be calculated at the time of reconciliation.  These targets will reflect any case-mix changes or any peer group changes observed in the performance year.

 

So what does this all mean?

Knowing the adjustments made to the preliminary target will reflect patient severity and case-mix changes in the performance period, providers should use these preliminary targets as a guide in evaluating potential opportunity or risk.  A provider needs to identify where their opportunities lie with improving post-acute utilization enough to realize a margin under the preliminary target.

For more information on BPCI Advanced, contact us and follow us on LinkedIn.

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