Bundled Payments for Care Improvements

    The Bundled Payments for Care Improvements (BPCI) is a group of 4 episode-based care models that bundle payments for multiple services Medicare beneficiaries receive during a single illness or course of treatment. Under this initiative, designed and instituted by the Centers for Medicare & Medicaid Services (CMS) Innovations Center, healthcare organizations enter into payment arrangements with Medicare that include financial and performance accountability for each episode of care. The goal of these payment models is to improve quality and coordination of care for Medicare beneficiaries while lowering costs.

    About BPCI

    BPCI is a volunteer project, giving providers the opportunity to work with CMS to test a value-based healthcare payment model for a three-year period – one that rewards providers for quality of care, rather than the quantity-based reward system inherent in the traditional fee-for-service model. According to CMS, another issue with the fee-for-service model is that it can result in fragmented care, with minimal coordination between healthcare providers, and research has shown that bundled payments can align incentives to encourage close coordination across all specialties and settings, resulting in higher quality, more cost-efficient care. Rehab select has opted to participate in BPCI, joining 3 Montgomery, AL hospitals that are also involved in the program.

    How BPCI Works

    Under the BPCI initiative, participants can choose among 4 episode-based payment models. In Model 1, the episode of care is defined as the inpatient stay in an acute care hospital and the bundled payment covers all related Medicare Part A services. Model 2 defines the episode as the initial inpatient stay, the post-acute period and readmissions, and all Part A and B services during the episode are covered. Model 3 episodes include the post-acute period and readmissions, and all Part A and B services are bundled. For Model 4, the episode includes the acute-care hospital stay plus readmissions, with all Part A and B services included. Participants can choose among 48 diagnoses that are eligible for bundling – Montgomery area hospitals have started out with 9 – and episodes may be 30, 60 or 90 days long.

    In Models 2 and 3, payment is subject to reconciliation at year end, comparing actual costs of episodes to target prices. Participants who contain costs below the target price will be entitled to receive a share of those savings from Medicare, while those who run over budget will be responsible for repaying a portion of the cost overrun. All models include provider-led care redesign and enhancements – reengineered care pathways, standardized care protocols, and/or more efficient care transitions and care coordination, for example – that are designed to improve patient care and reduce costs. Rehab select has embraced these changes, leading the charge in terms of provider-led care improvements in the Montgomery area. 

    Participant Types

    BPCI participants include Awardees, which are organizations that assume financial liability for episode spending, Episode Initiators, which are healthcare providers that trigger BPCI episodes of care, and Conveners, which are contracted groups that develop networks of care providers. There is often some overlap within these categories, since Initiators and Conveners may or may not also be BPCI Awardees.

    As an interesting side note, becoming an Awardee was, in 2011, a process that required filling out a 100 page application. While that process that has since been simplified to some extent, navigating the program to the best advantage of both patients and providers can still be a challenge. Rehab Select has worked hard to place itself on the cutting edge of today's shift to value-based healthcare, making us a great resource to aid your organization in making the most of the BPCI initiative.


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