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CMMI Remains Bullish on Bundled Payments

Ecg Blog Cmmi Remains Full Size

On April 18, as anticipated, the Center for Medicare & Medicaid Innovation (CMMI) announced it would be extending one of the few healthcare programs that has actually saved the government money. The Bundled Payments for Care Improvement (BPCI) initiative was originally scheduled to be a 3-year pilot ending in the fall of 2016. But now CMMI is offering current participants the opportunity to extend their participation in Models 2, 3, and 4 for an additional 2 years, through September 30, 2018.

The expansion of the program is certainly a win for government payers. It is estimated that bundled payments could save CMS approximately $19 billion between 2010 and 2019.

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Providers are cheering the expansion as well. “We think this is great news for NYU,” said Joseph Bosco, M.D., Vice Chair of Orthopedic Surgery at NYU Langone Hospital for Joint Diseases, during a recent webinar hosted by ECG Management Consultants. “We have seen tremendous cost reductions and care improvements as a result of our efforts with BPCI.” Hannah Alphs Jackson, M.D., Program Director of Value-Based Delivery at Northwestern Memorial Hospital, concurs with Bosco. “You are lucky if once in your career you get an opportunity to be at the forefront of re-engineering the care model. With BPCI, this is it.”

Bosco’s and Jackson’s comments reflect the growing popularity of bundled payment initiatives. More than 1,500 organizations are participating in BPCI, which is the largest national test of the bundled payment reimbursement construct but not the only one. Further, it is widely expected that current BPCI participants will take CMS up on its extension offer. And in a recent survey conducted by ECG, 70% of respondents said their healthcare organizations are engaged in some sort of bundled payment reimbursement (ECG, 2016).

2016 National Bundled Payments Landscape

Map adapted from CMMI, April 2016.

All of this stands in stark contrast to the attitude in Congress, where two senators sought to delay implementation of the CJR model ahead of its April 1 effective date. Such stall tactics ignore both the enthusiasm of many providers and the numbers that demonstrate bundled payments’ success. In their proposed legislation, Congressmen Tom Price (R – Georgia) and David Scott (D – Georgia) insist that providers need more time to prepare for bundled payments, but such arguments ring hollow considering how many models are already in use.

To be sure, plenty of providers are still resistant to bundled payments. The pace is intense and implementation is disruptive. But like a muscle that needs developing, a good team will adapt. Further, with these models, there are clear winners and losers – any provider whose relative value to the bundle does not justify the cost will get squeezed. But innovation is about doing – not delaying. And right now, the winners are those organizations that are embracing change.