Healthcare Financial Insights
BPCI Advanced: Additional Perspective
March 1, 2019
Last October, TripleTree kicked off a blog series on Bundled Payments for Care Improvement (BPCI) Advanced, the second-generation voluntary bundled payment program launched by the Centers for Medicare & Medicaid Services (CMS).
BPCI Advanced presents a new opportunity for providers to participate in bundled payments under a refreshed set of guidelines, methodologies, and timelines. In our first blog on BPCI Advanced, TripleTree provided a brief review of what we learned from BPCI Classic and our expectations for BPCI Advanced with specific predictions about how the program is continuing to evolve, including 1) Marquee providers will participate more meaningfully, 2) The role of conveners will evolve, 3) Software and analytics will play an even larger role in bundles.
Today, we dive into the publicly available CMS data to see what we can learn about program participation levels, how providers are engaging, and the convener landscape. Let’s take a look to see what we can glean.
At a summary level, the CMS data reveals a number of notable trends, three of which are described in detail through the balance of this blog:
- Participation levels in BPCI Advanced are strong
- The provider class shifted dramatically compared to BPCI Classic
- The convener landscape is changing, with new entrants and increasing specialization
Trend #1 – Participation levels in BPCI Advanced are strong
According to CMS, 1,547 episode initiating organizations are currently participating in BPCI Advanced, with approximately 1,300 being “unique” providers (the other ~250 are largely secondary provider site locations). This constitutes solid growth of 27% over the 1,025 providers in the BPCI Classic program as of July 2018. CMS Administrator Seema Verma agrees with our assertion, stating “The BPCI Advanced model was the Trump Administration’s first Advanced Alternative Payment Model, and today we are proud to announce robust participation.”1
Trend #2 – The provider class shifted dramatically compared to BPCI Classic
The breakdown of episode initiators by type demonstrates how BPCI Advanced participation has evolved from BPCI Classic. Both acute care hospitals (ACHs) and physician group practices (PGPs) experienced a strong increase in participation while post-acute care providers are no longer allowed to initiate episodes. This meaningful program adjustment by CMS underscores the role of physicians and other specialists at the “top of the funnel” and firmly in control of how patients are diagnosed/assessed and where bundles are initiated. Despite this change, post-acute care providers will still have a role in BPCI Advanced through partnering with episode initiators as part of post-acute care preferred provider network strategy.
This data also indicates that large marquee providers are buying into BPCI Advanced. Five years ago, many large health systems were hesitant to meaningfully engage in BPCI Classic. Under BPCI Advanced, the “wait and see” approach appears to have faded. Many notable health systems are participating in BPCI Advanced, each at various volume and convener engagement levels. These providers include: Trinity Health, Mayo Clinic, Catholic Health Initiatives, Northwell Healthcare, Baylor Scott & White, Advocate Health, and Yale New Haven Health. This named set of marquee health systems each has between four and 30 ACHs participating in BPCI Advanced and further underscore the direction and strength of the bundled payments market.1
Trend #3 – The convener landscape is changing, with new entrants and increasing specialization
While the convener market share leaders from BPCI Classic continue to dominate BPCI Advanced, a number of new convener entrants have emerged, most of whom have relatively small market share. Looking at the data, 83% of episode initiating providers are utilizing a convener for BPCI Advanced and 17% are contracting directly with CMS.
Looking at specific conveners, Remedy Partners(Remedy) remains the single largest convener in BPCI Advanced, with a 19% market share, meaning nearly one fifth of participating providers have engaged Remedy as a convener. Overall, market share is concentrated with seven top conveners that collectively represent 53% of the market. There is also a long-tail element to this market as well, with 30% of providers utilizing a convener with a smaller market share.1
This chart shows another interesting trend with 17% of episode initiating providers contracting directly with CMS. BPCI Classic provided an opportunity for providers to test and learn. As a result, more providers have elected to “go it alone” based on their sophistication, scale, and/or learnings from BPCI Classic. Some have built workflow tools to help manage the bundled payments process and use third party software or consulting to fill gaps. In fact, conveners are beginning to offer their capabilities for providers that are working directly with CMS.
Bundle specialization is another interesting trend we are experiencing in the convener marketplace. For instance, Archway Health (Archway), a Watertown, MA-based convener is building significant traction in the oncology market. Conveners like Archway have found that engaging directly with specialists, in this case oncologists (in other bundles it could be cardiologists or orthopods), can promote more rapid change, both in terms of the clinical process redesign and the ultimate outcome.
BPCI Advanced is in its early stages but is off to a strong start. The program adjustments by CMS have shifted the landscape of providers that are participating, and in turn, changed how conveners and other service providers are enabling the market. We are watching closely as the opportunity to add or drop bundles risk-free comes today, March 1, 2019. At this time, industry experts expect a number of episode initiators will drop bundles, or in some cases, may exit the program completely. Regardless of the March 1 changes, the initial participation levels lead us to conclude BPCI Advanced will serve as a driving force and catalyst in the shift to value-based care for years to come.
We look forward to watching this active market evolve during the BPCI Advanced program. Tell us what you think.
BPCI Advanced, Centers for Medicare & Medicaid Services, CMS