How Do Frail Medicare Beneficiaries Fare Under Bundled Payments?

Abstract

Background/objectives: Bundled payments are an alternative payment model in which a hospital takes accountability for the costs of a 90-day episode of care. Such models are meant to improve care through better coordination across care settings, but could have adverse consequences for frail adults if they lead to inappropriate cuts in necessary post-acute care.

Design: Retrospective claims-based analysis of hospitals' first year of participation in Medicare's Bundled Payments for Care Improvement (BPCI) program.

Setting: US hospitals.

Participants: A total of 641 146 Medicare beneficiaries admitted to 688 BPCI programs and 1276 matched control hospitals for myocardial infarction, heart failure, pneumonia, sepsis, chronic obstructive pulmonary disease, or major joint replacement of the lower extremity in 2012 to 2016.

Intervention: Participation in BPCI.

Measurements: Proportion of patients in each quartile of a validated claims-based frailty index, total and setting-specific standardized Medicare payments per episode, days at home, 90-day readmissions, and 90-day mortality.

Results: Higher levels of frailty were associated with higher Medicare payments and worse clinical outcomes (for the medical composite, costs per episode were $11 921, $17 348, $22 828, and $29 157 across frailty quartiles; days at home were 70.1, 60.4, 54.3, and 51.5; 90-day readmission rates were 16.0%, 27.0%, 38.2%, and 50.9%; and 90-day mortality rates were 15.4%, 22.5%, 25.1%, 21.3%); patterns were similar for joint replacement. Under the BPCI program, there was no differential change in the proportion of highly frail patients at BPCI vs control hospitals. There were also no differential deleterious changes in payments or clinical outcomes for frail relative to nonfrail patients at BPCI vs non-BPCI hospitals.

Conclusion: While frail patients had higher costs and worse outcomes in general, there was no evidence of changes in access or worsening clinical outcomes in BPCI hospitals for frail patients relative to the nonfrail in hospitals' first year of participation in the program. These findings may be reassuring for policy makers and clinical leaders. J Am Geriatr Soc 67:2245-2253, 2019.

Keywords: Medicare; bundled payments; costs; health policy.