I. BPCI-A program Model Year 3 Options for Participation
As highlighted in the Q2 2020, June Newsletter, in light of the COVID-19 pandemic, CMS has provided BPCI Advanced hospitals the opportunity to choose from one of three options as it relates to financial risk in Model Year (MY) 3 of the program. A detailed analysis factoring in various financial and operational considerations was completed to help guide each TH hospital leadership team in deciding which option to choose. Final decisions for each participating hospital are listed below in Figure 1. Regardless of which option participants choose, CMS will continue to provide monthly data to help participants understand their financial performance and to what degree the COVID-19 pandemic has had an effect on their bundles. This data will continue to be distributed internally to the individual hospital bundle clinical effectiveness teams (CET’s) on a quarterly basis. For additional questions, please don’t hesitate to reach out to your hospital leadership team, THP, or Kristen Klopp, Manager of Bundled Alternative Reimbursement.
II. BPCI-A Performance Period 1 with True Up #1 – physician payouts
The Q2 March 2020 THP BPCI-A Physician Newsletter featured a high-level section regarding the process of payment distribution in the case where hospitals experienced positive hospital savings for the first Performance Period (PP) of this program. Included is a link for quick reference to the March Newsletter.
- Timing of Distribution:
There are two payments made for each PP. The first payment (True Up #1) occurs approximately 15 months following the end of a PP. This payment will include a 10% withhold for quality performance as well as any additional claims lag. Accordingly, the second payment (of up to 10%), made four months later, is considered True Up #2. The Bundled Payment Steering Committee approved that the distribution of payments to the physicians would happen in 2 phases/payments in accordance with CMS’ reconciliation process: the first payment will be after each PP True Up #1 and the second will be the final payments after PP2 #2.
PP1: October 1, 2018 to June 30, 2019
True-Up #1: Fall 2020
True-Up #2: Spring 2021
The effective date of this decision will be from program inception or at the point when TH physicians were eligible for gainsharing payments (January 1st, 2019). Future distribution timing to physicians is dependent on timing of payment from CMS.
III. BPCI-A Funds Flow Changes
The Bundled Payment Steering Committee approved the following changes to the Tower Health BPCI-A funds flow methodology in July of 2020. These changes directly affect both physician reimbursement structure as well as potential to earn shared savings and have been included in BPCI-A Physician Contract Amendments for MY3.
Savings Pool Designation
Twice a year CMS reconciles all the Medicare spending that occurred at the aggregate/participant level for triggering episodes against a target price that CMS sets prior to every PP. As Figure 2 displays, the overall methodology for how the savings pool is to be distributed by PP, will be changing as of July 1st, 2020. PP4 moving forward, all participating bundle physicians will essentially be risk sharing across all episodes for a given hospital.
50% Physician Payment Cap:
With regard to PP1 of the BPCI-A program, CMS mandated that all participants with contracted gainsharing physicians, hold those partners subject to a 50% cap of the total professional fees billed by the physicians who achieved shared savings within that specific timeframe. This 50% fee cap in many cases, significantly reduces potential payment to physician collaborators, therefore, CMS put forth an amendment to the current contracts which ultimately provides the option for participants to lift this cap beginning PP 2 (July 1st, 2019). TH Hospitals did sign this amendment. The Bundled Payment Steering Committee voted in favor of allowing each TH hospital to choose whether they will lift the cap or keep the cap in place. For further information or additional questions, please don’t hesitate to reach out to your hospital leadership team, THP, or Kristen Klopp, Manager of Bundled Alternative Reimbursement.