After much anticipation, the data has finally arrived.
Providers that applied for the Centers for Medicare & Medicaid Services (CMS) Bundled Payments for Care Improvement (BPCI) Advanced model are now armed with historical data and preliminary target prices to help guide their decisions and strategy. Using this data, organizations can choose to enter the BPCI Advanced program, which starts in October, positioning themselves for a win-win-win scenario with better compensation tied to improved patient outcomes delivered at a lower cost.
The baseline and preliminary target price data are key to understanding historical performance, savings potential, and which clinical episodes have the greatest opportunity for process improvement and care coordination within the 32 conditions of the program. To uncover the greatest opportunity areas, episodes must be selected based on both methodical analysis of this data and associated qualitative considerations.
Outlined below are four keys to evaluating baseline and target price data.
- Analyze Conditions
Start by analyzing savings opportunities at the condition level to identify which clinical episodes have the greatest potential and make the most sense for your organization.
- Focus on clinical episodes with strong volume (i.e. 80-100+ episodes annually) to avoid statistical variability as lower volume conditions will mean they are more likely impacted by outlier cases.
- Pay attention to conditions that reflect a strong savings percentage that accounts for more than the required 3% savings that CMS has incorporated into the program (i.e. at least two to three times the discount required).
- Ensure you have access to the right comparative data and the ability to benchmark performance with peers across the nation to further understand savings opportunities.
- Pinpoint Opportunities
Once the top conditions are identified, take the analysis a step further for the conditions with the most potential.
- Understand historical case mix by analyzing episode volume and spend patterns at the code level, as a patient case mix adjustment is built into the target price methodology.
- Explore savings opportunities and spend/utilization patterns across the continuum to determine if your organization can achieve savings.
- Ex: If skilled nursing facility (SNF) costs make up a significant portion of episode spend in the Major Lower Joint condition, determine if your organization has the physician relationships, community partnerships and post-acute care network to actually drive SNF costs down for lower joint patients. How many of these patients have the potential to go straight home after discharge?
- Ex: Do you have extremely high inpatient rehab (IRF) utilization because your organization owns the IRF? Consider the politics or financial repercussions if IRF utilization was decreased.
- Ensure you have access to analytics that provide the ability to forecast the impact and estimate potential savings that could be achieved through adjustments in post-acute care utilization or average length of stay.
- Carefully Compare
After drilling down on potential conditions, it will be everyone’s natural inclination to compare the baseline data to preliminary target prices and determine how the organization performed. But exercise caution.
- Remember that the targets are in 2018 dollars and the baseline data is not, so the data provided from CMS is not apples to apples.
- Ensure you understand how best to do this comparison, as there are caveats to consider based on target price methodology.
- Ex: Target prices are provided at the clinical episode level, not the code level as we see in other CMS bundled payment programs. As such, it’s important to evaluate the target against the full population of episodes within the condition and avoid comparing the target price to an individual episode.
- Take Another Look
The data won’t tell you everything. Baseline and target price data can reveal quite a lot but there are other qualitative aspects to consider.
- The baseline data is only through 2016, leaving an almost two-year gap from when the program will go live. Consider what might have changed in your organization during the gap period.
- Ex: Did your organization obtain trauma status in 2017? This wouldn’t be captured in the baseline data provided, but would potentially affect patient volume and the acuity level of patients when live in the program.
- Ex: Maybe your organization had higher volumes in the baseline data, but volumes are expected to decrease significantly due to recent retirement of a high-volume provider.
- If your organization is considering procedural or medical conditions, these would require very different approaches and strategies.
- Your relationship status with physicians – employed or independent – will determine whether they are ready and willing to align with and understand the value and purpose of the program.
By making smart, educated decisions using baseline and preliminary target price data, BPCI Advanced applicants will be well positioned to enter the program and find success in their performance so they can hit quality goals and savings targets. For more on how to achieve success in bundled payments, and BPCI Advanced in particular, download our white paper: Ready, Risk, Reward: Keys to Success in Bundled Payments or contact Chris_Murphy@PremierInc.com
Anna Goldman is a manager with Premier’s Bundled Payment Team. She has 10 years of healthcare experience in revenue cycle, data analytics and process improvement. When not working, you can find Anna spending time with her husband and two children or testing a new recipe in the kitchen.
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