On October 13, 2022, the United States Centers for Medicare and Medicaid Services (CMS) announced that it will extend the Bundled Payments for Care Improvement Advanced (BPCI Advanced) Alternative Payment Model (APM) for two years to December 31, 2025, allowing new entities to join the model in 2024.
BCPI Advanced APM Background
The BCPI Advanced APM was launched on October 1, 2018, to test whether linking payments for a Clinical Episode to cost and quality of care would incentivize providers to reduce Medicare expenditures and maintain (or improve) quality of care. Under the APM, a Clinical Episode is defined as either an inpatient stay or an outpatient procedure and includes all non-excluded clinical laboratory services, durable medical equipment, physician services, Part B drugs, skilled nursing facility services, inpatient rehabilitation facility services, long term care hospital services, home health agency services, and hospice services.
Participants in the model include convener and non-convener participants. A convener participant does not need to be a Medicare-enrolled provider or supplier to participate in the model, but a non-convener participant must be a physician group practice (PGP) or acute care hospital (ACH).
As of December 31, 2021, more than 1.2 million Medicare beneficiaries received care from Participants in the BPCI Advanced Model and more than 1,800 ACHs and 69,867 physicians engaged in care redesign activities based on participation in the APM. Further, in the first two model years, Medicare providers and suppliers in the BPCI Advanced APM lowered health care spending without reducing quality.
Financial Methodology Changes for 2023
In 2023, CMS is making several financial methodology changes to the model for 2023, including reducing the CMS Discount for medical Clinical Episodes from 3% to 2%. CMS will also reduce the Peer Group Trend (PGT) Factor Adjustment cap for all Clinical Episodes from 10% to 5%. Additionally, CMS is modifying the major joint replacement of the upper extremity (MJRUE) Clinical Episode to include any outpatient total shoulder arthroplasty (TSA) procedures. CMS will also include a trauma/fracture flag and MJRUE procedure group flag along with their interactions in the risk adjustment for this Clinical Episode.
CMS will also hold participants accountable for all Clinical Episodes in which the beneficiary has a COVID-19 diagnosis during the Clinical Episode. This is because with the advent of COVID-19 vaccines and treatments, healthcare providers are now better equipped to care for COVID-19 patients than when the pandemic first started. This change is likely to increase Clinical Episode volume.
New Applicants for 2024
CMS will announce a Request for Applications in early 2023 for Medicare-enrolled providers and suppliers and Medicare Accountable Care Organizations (ACOs) to participate in the two-year extension (2024-2025). To be eligible for participation in the extension, Convener Applicants must be Medicare-enrolled entities or ACOs. Those interested in applying as Non-Convener Applicants will need to either be an ACH or a PGP.
Essentially, all new applicants for 2024 must be a Medicare-enrolled ACH or PGP or a Medicare ACO. Current participants active in 2023 will have the opportunity to continue to participate in the model by signing an amended and restated Participation Agreement for 2024 and beyond.