Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model—Fourth Annual Report

The Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model tests whether holding participants financially accountable for the cost and quality of health-care services during an episode can reduce Medicare spending while maintaining or improving quality of care. Episodes begin with either a hospitalization or an outpatient procedure initiated by a BPCI Advanced participating hospital or physician group practice (PGP) and end 90 days after discharge. Participants in the model can earn a reconciliation payment if episode payments are below their target price or they may be required to repay Medicare if episode payments are above their target price, after considering the quality of their care. Thus, participants have incentives to coordinate care across all providers involved in the episode.

Hospitals and PGPs participating in the BPCI Advanced Model continued to reduce episode payments in 2020 (Model Year 3) through reductions in post-acute care use. BPCI Advanced continued to achieve net savings for Medicare from surgical clinical episodes which were offset by losses from medical clinical episodes. To bolster the model’s ability to achieve savings, the Centers for Medicare & Medicaid Services (CMS) made substantial changes to the target pricing methodology starting in 2021 and required participants to select among groups of clinical episodes rather than individual clinical episodes.

Early payment reconciliation data indicate a potentially favorable financial outcome for Medicare in 2021 (Model Year 4). Future evaluation reports will formally estimate savings under the model after these changes have taken effect. In 2020, there was some improvement in quality for PGP medical clinical episodes as seen in the small reductions in unplanned readmission and mortality rates. In 2021, BPCI Advanced survey respondents generally reported mixed or slightly unfavorable results for functional status and care experience.