Home Health & Hospice Week

Larger HHAs tend to participate in bundled payment tests.

Is Medicare going to require you to participate in bundled payment models including other providers? The jury is still out, but you may get some clues on the program’s direction from a new HHS Office of Inspector General report on the pros and cons of voluntary versus required models.

In the report, the OIG investigates the six episode-based payment models that the Centers for Medicare & Medicaid Services offers as alternatives to traditional Medicare. Only one of those models, Bundled Payments for Care Improvement Model 3, Retrospective Post-Acute Care Only, involves home health agencies directly.

Reminder: Under BPCI Model 3, postacute care providers receive payments or pay recoupments if total spending for Medicare services is over or under a target price. Episodes of care begin with post-acute care services and include all services up to 90 days after initiation of post-acute care services with a participating post-acute care provider. Participants select from up to 48 clinical conditions included in the model.

As of last October, 116 HHAs had participated so far in the model, the OIG notes. Participating agencies in general were larger, had a higher episode volume, and higher episode spending compared to HHAs nationally.

Specifically, the OIG notes these characteristics about BPCI Model 3 agencies in 2016:

• BPCI HHAs employed 29 nurses on average, versus nine nationally;
• Seventy-three percent of BPCI agencies were part of a chain, versus 32 percent nationally;
• Seventy-eight percent of BPCI agencies were urban and 22 percent rural, versus 81 percent urban and 19 percent rural, nationally;
• Eighty-one percent of BPCI agencies were for-profit, 19 percent non-profit, and 0 percent government, versus 76 percent for-profit, 17 percent non-profit, and 6 percent government nationally;
• BPCI HHAs averaged 374 admission for BPCI episodes, versus 104 nationally; and
• For three of the possible 48 BPCI model 3 clinical episodes, BPCI agencies averaged $8,739 on episode spending, versus $8,531 nationally. Spending calculations included an inpatient stay plus relevant services provided during a 90-day post-discharge period, the OIG notes.

Financial Penalties Get More Real Under Mandatory Model

Voluntary bundled payment systems are more popular with providers because they generally have more favorable risk and financial terms to attract participants. Another reason is that potential participants “have the ability to self-select models and episodes where they have identified opportunities to successfully implement care redesign and earn performance bonuses,” the OIG notes.

The early adopters who participate in voluntary programs also “are interested in performing well under the model,” the OIG adds.

On the other hand: CMS gets a more representative pool of participants, allowing for results that are more applicable overall, with mandatory models, the OIG concludes. Required participation also allows for greater financial risks and penalties, and encourages value-based care in providers who are reluctant to transition.

“Voluntary models largely benefit providers” while “mandatory models are more likely to give CMS generalizable evaluation results,” the OIG concludes.

Note: The 44-page report is at www.gao.gov/assets/700/696264.pdf.