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CMS Launches Novel Payment Model for Inpatient, Outpatient Care

New payment model encourages value-based care.
Published Online: Jan 11,2018
Laurie Toich, Associate Editor
The Centers for Medicare and Medicaid Services (CMS) Center for Medicare and Medicaid Innovation recently launched a novel voluntary payment model, according to a press release.

Under fee-for-service Medicare, the program reimburses providers for each individual service. The new Bundled Payments for Care Improved Advanced (BCPI Advanced) program offers providers the opportunity to earn additional reimbursement if expenditures for an episode of care are under a certain threshold that accounts for quality, according to the release.

The CMS said that bundled payments incentivize health care professionals to collaborate and coordinate care to reduce unnecessary spending.

Providers participating in BCPI Advanced can earn value-based payments on 32 episodes of care, including major joint replacement, percutaneous coronary intervention, cardiac defibrillator, and spinal fusion. This model provides support for innovative providers and care redesign that focuses on improved quality and reduced spending, according to the release.

BCPI Advanced will also qualify as an Advanced Payment Model (APM), which is a program that changes the way physicians are reimbursed.

“CMS is proud to announce this Administration’s first Advanced APM,” said CMS Administrator Seema Verma. “BPCI Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value. Under this model, providers will have an incentive to deliver efficient, high-quality care.”

Under the new payment model, participants are expected to redesign care delivery to keep costs below a certain amount while improving quality measures, according to the release.

The CMS advises that physicians are responsible for financial risk, earn payments tied to performance, and are required to use electronic health records.

This novel model takes into account factors from previous programs, industry experience with bundled payments, and input from various stakeholders, such as acute care hospitals, physician groups, and other providers, according to the release.

The CMS said that BCPI Advanced is ideal for participants who are interested in:
  • redesigning and improving care
  • reducing unnecessary costs
  • care coordination and quality improvement
  • participating in a model that requires financial accountability for outcomes and lowered spending
  • developing an environment that advances evidence-based knowledge
  • increasing the commonality of better health at lower costs through patient engagement, education, and communication

The CMS concluded that there will be an evaluation at the end of the model in 2023 to determine the quality of care and changes in health care spending, according to the release.