Bundled Payments for Care Improvement: Boom or Bust?

Abstract

Background: As early implementors of the Centers for Medicare and Medicaid Services (CMS) Bundled Payments for Care Improvement (BPCI) initiative, our private practice sought to compare our readmission rates, post-acute care utilization, and length of stay for the first year under BPCI compared to baseline data.

Methods: We used CMS data to compare total expenditures of all diagnosis-related groups (DRGs). Medicare patients who underwent orthopedic surgery between 2009 and 2012 were defined as non-BPCI (n = 8415) and were compared to Medicare BPCI patients (n = 4757) who had surgery in 2015. Ninety-day post-acute events including inpatient rehabilitation facility or subacute nursing facility admission, home health (HH), and readmissions were analyzed.

Results: The median expenditure for non-BPCI patients was $22,193 compared to $19,476 for BPCI patients (P < .001). Median post-acute care spend was $6861 for non-BPCI and $5360 for BPCI patients (P < .001). Compared to non-BPCI patients, BPCI patients had a lower rate of subacute nursing facility admissions (non-BPCI 43% vs 37% BPCI; P < .001), inpatient rehabilitation facility admissions (non-BPCI 3% vs 4% BPCI; P = .005), HH (non-BPCI 79% vs 73% BPCI; P < .001), and readmissions (non-BPCI 12% vs 10% BPCI; P = .02). Changes in length of stay for post-acute care were only significant for HH with BPCI patients using a median 12 days and non-BPCI using 24 days.

Conclusion: The objective of BPCI was to improve healthcare value. Through substantial efforts both financially and utilization of human resources to contain costs with clinical practice guidelines, patient navigators, and a BPCI management team, the expenditures for CMS were significantly lower for BPCI patients.

Keywords: Alternative Payment Models; Bundled Payments for Care Improvement; Medicare; healthcare utilization; post-acute; readmission.