Bundled Payments for Care Improvement (BPCI)A helpful post from Steven A. Farmer, Meaghan George and Mark B. McClellan explains. Comprehensive Care for Joint Replacement (CCJR) is a bundled payment structure for hip and knee replacements. CMS notes that:
2013, there were more than 400,000 inpatient primary procedures in Medicare, costing more than $7 billion for hospitalization alone.
The CCJR program creates lower extremity joint replacements (LEJR) episodes for hospital admissions for joint replacements (MS-DRG 469 and 470) that includes all payments during the 90 days following surgery. All Part A and B services the patient receives in that 90 day period are included in the bundle.
The CCJR program is similar to CMS’s other bundled payment programs such as aptly named Bundled Payments for Care Improvement (BPCI). However, the authors note a number of key differences between CCJR and BPCI.
- Mandatory participation. All hospitals (with limited exceptions) in selected geographic areas are required to participate. This design enables evaluation of the program in a much broader range of hospitals than agreed to participate in the BPCI and avoids selection bias. No alternative payment model has yet been applied to an entire class of providers, and CMS intends to pursue a robust evaluation of the program.
- Initiation occurs at hospitalization. Whereas CCJR must begin with an inpatient admission, BPCI episodes could be inpatient, outpatient or post-acute care.
- Providers have fewer choices with the CCJR episodes. The CCJR includes all Medicare Part A and B services, while some of BPCI models do not. BPCI offers participations a choice of episode durations (30-, 60-, or 90- day), while CCJR can only be 90 days.
One key issue with all bundled payments is innovation. Under bundled payment–either CCJR or BPCI–provider have an incentive to adopt new technologies that lower cost and improve or do not change quality as well as technologies that do not affect cost, but improve quality. Innovations that improve patient care but increase cost, however, will become increasingly difficult for providers to adopt if rates for CCJR episodes are fixed. Further services that are not currently captured in billing–such as telemedicine or digital medicine technologies–would not be included in the estimated payment bundle until years in the future.
Bundled payments will incentivize providers to improve efficiency and can save Medicare money, but it risks stifling innovation and potentially harming patient care.