CMS unveils new bundled payment model

By Chase Doscher, Class of 2018; Elizabeth N. Pitman, Counsel at Waller; Zachary D. Trotter, Associate at Waller

Earlier this month, CMS announced the launch of the Bundled Payment for Care Improvement Advanced (BPCI Advanced) payment model.

This is the first Advanced Alternative Payment Model (Advanced APM) introduced under the Trump Administration and the start of the next generation of BPCI models offered through the Center for Medicare and Medicaid Innovation and authorized under the Affordable Care Act.  Under the MACRA Quality Payment Program, providers will be subject to Medicare payment adjustments through one of two tracks: Merit-based Incentive Payment System (MIPS) or Advanced APM.

Under MIPS, a provider may receive a negative, neutral or positive adjustment with the expectation that the majority of participants will experience either negative or neutral adjustments. The BPCI Advanced model, however, entices providers to participate in an Advanced APM by offering the potential for bonus payments under MACRA for those who meet or achieve certain benchmarks during a 90-day episode of care, including the all-cause hospital readmission measure and advance care plan measure.  As with other Advanced APMs, BPCI Advanced requires that participants assume some of the risk and ties payment to quality performance metrics and the required use of certified healthcare technology.

After cancelling an Obama-era proposal for converting certain of the BPCI episode models to mandatory bundled-payment models, the Trump Administration effort to maintain voluntary participation is an attempt to decrease the administrative burdens such models placed on providers. Voluntary participation in BPCI models, such as Comprehensive Care for Joint Replacement and the Cardiac Rehabilitation Incentive model, has been offered since 2016.

This new model will give providers, “an incentive to deliver efficient care,” Seema Verma, CMS Administrator, said. “BPCI Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and toward paying for value.”

Thirty-two clinical care episodes will initially be included in BPCI Advanced, 29 inpatient-setting episodes of care and three outpatient-setting episodes of care and the potential for episode revision for new and existing participants beginning January 1, 2020.   The clinical care episodes include services such as major joint replacement of a lower extremity, percutaneous coronary intervention and spinal fusion.

BPCI Advanced performance period is from October 1, 2018 through December 31, 2023.  Participants joining in the initial stage may not exit prior to January 1, 2020.

Providers interested in at least one of the 32 clinical episodes to apply to the model have until 11:59 pm EST on March 12, 2018 to apply via the application portal.

OIG Gives Green Light to Gainsharing Arrangement

By Brandon Huber, Class of 2019; Kim Harvey Looney, Partner at Waller; Justin Hickerson, Associate at Waller

A gainsharing arrangement between a non-profit hospital and members of a multi-specialty physician group has been authorized by the Office of Inspector General for the first time since the 2015 enactment of MACRA removed certain roadblocks from the expanded use of gainsharing in the healthcare industry.

An OIG advisory opinion issued earlier this month involves a proposed arrangement in which a non-profit medical center will pay certain neurosurgeons a share of cost savings realized by the selection and use of certain products during spinal fusion surgeries. Thirty-four cost-reduction measures were identified by the medical center based upon considerations of costs, quality of patient care, and utilization on a national level. Thirty-one recommendations involved standardizing certain devices and supplies used in spinal fusion surgeries. The remaining three suggested that the neurosurgeons use Bone Morphogenetic Protein for spine surgeries only on an as-needed basis.

The proposed arrangement established a three-year term, whereby the neurosurgeons would receive 50 percent of the annual cost savings, paid each year over the term of the arrangement. The compensation paid to the neurosurgeons would then be divided on a per capita basis, with the remainder being allocated towards paying the practice group’s administrative expenses. Other safeguards implemented under the arrangement included an oversight committee and a requirement that all patients be given written notice of the arrangement and an ability to review the details prior to the performance of their procedure.

In assessing the legality of the arrangement, the OIG examined the application of both the CMP and the Anti-kickback Statute. Regarding the CMP, although the OIG could not opine as to whether the arrangement would reduce medically necessary services, it found that, based on the methodology for development and payment of the cost savings, along with the monitoring and safeguards put in place, it would not impose sanctions.

Likewise, the OIG concluded that it would not impose sanctions under the Anti-kickback Statute because the arrangement presented a sufficiently low risk of fraud and abuse. The OIG based its decision on several factors:

  • the majority of the money received pursuant to the cost-sharing arrangement would be divided per capita amongst the four neurosurgeons, thereby reducing the risk that any particular physician would be incentivized to generate disproportionate cost savings;
  • there was no prohibition on using nonstandardized products, despite the product standardization recommendations; and
  • no other neurosurgeons from outside groups were allowed to participate, reducing the likelihood that the medical center would use the arrangement to attract neurosurgeons from competing hospitals to perform surgeries at its facility.

Although the opinion only applies to the parties who requested it, the opinion can serve as a valuable reference tool for those wanting to ensure future gainsharing arrangements are legally appropriate. Furthermore, this opinion highlights the OIG’s willingness to support gainsharing arrangements as the healthcare industry transitions from a fee-for-service model of care to a system which emphasizes value-based payments.