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Bundled Payment and the Strategy Behind PAC Provider BPCI Participation

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In this week's edition of McKnight's Long-Term Care News & Assisted Living, Avalere's Brian Fuller wrote a guest post discussing the merits behind PAC provider bundling.
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.

While typical bundling may force PAC providers to lower their utilization of services, causing unwanted financial risk, joining CMS’s bundling demonstration offers great benefit.

The Bundled Payment for Care Improvement (BPCI) initiative, tests bundled payments to align incentives for providers to coordinate care across many different settings and clinical conditions. Through BPCI, PAC providers can participate in two out of the four different models, allowing them to either begin with an inpatient stay at an acute-care hospital (Model 2) or to start after the inpatient hospital stay and instead when the PAC services commence (Model 3). Regardless of the model chosen by different PAC providers, payments are retrospective, and they may chose up to 48 different clinical condition episodes, and pick between a 30, 60, or 90 day durations.

Brian identifies three clear strategic advantages for PAC providers to join the BPCI initiative. They are: PAC providers with the most risk-based payment experience, as well as those with experience testing coordinated care models, are the most likely BPCI participants. Opting out of this important demonstration could result in missing out on an opportunity to better align, and pay for, care in the future.

    Data Enlightenment – BPCI participation grants providers access to historic Medicare claims data.

    Experience in Risk-Based Payment – BPCI participants can gain essential risk-based payment experience while CMS still allows experimentation.

    Market Positioning – Early BPCI providers have can better position themselves in the market and build relationships with prescribing hospitals and physicians.

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