SNFs’ Place in New Bundled Payment Model Unclear

The skilled nursing industry is still sorting out how it will participate in a newly announced bundled payment model rolled out by the Centers for Medicare & Medicaid Services on Tuesday.

Early analysis of the text from CMS seems to exclude skilled nursing facilities, home health agencies and other post-acute care providers from applying for the program, according to multiple experts who spoke to Skilled Nursing News.

“We were surprised and frankly disappointed to see SNFs and home health agencies not be episode initiators,” Keely Macmillan, general manager of bundled payments at the Watertown, Mass.-based Archway Health, told SNN.


“For bundled payments to be successful, you need post-acute care engagement,” Macmillan said, pointing to the success that PAC providers have already seen in existing models. “That’s what’s perplexing about it. So much of the opportunity for cost savings is in the 90 days after discharge. You have to engage SNFs and home health agencies and have their insight.”

While SNFs themselves can’t directly apply to participate in the program, dubbed Bundled Payments for Care Improvement Advanced (BPCI Advanced), experts say providers in the post-acute space will still find opportunities in the new landscape.

“There are aspects of BPCI Advanced that do talk about the possiblitiy of participants working in financial arrangements with downstream providers, [which] could include PAC providers,” Gina Bruno, vice president of clinical strategy at NaviHealth, said.


The Brentwood, Tenn.-based NaviHealth provides post-acute care transition services, and serves as one of the largest conveners in the bundled payment space.

Both Macmillan and Bruno cautioned they expect the agency to provide further guidance moving forward.

Streamlined approach

The new CMS initiative represents a more streamlined model than the original BPCI, Bruno said, though both seek to improve quality and reduce costs by requiring multiple participating providers to split the bill for a single episode of care. For instance, Bruno noted that the total number of episodes has been cut from 48 to 32, including 29 inpatient and three outpatient episodes.

While post-acute care providers are shut out of the application process, CMS mentioned PAC throughout its description of the new model and episodes of care, with more stringent quality markers. As a result, skilled nursing and home health providers will likely need to play an active role in helping participants achieve those goals.

“It’s clear throughout BPCI Advanced that PAC is still critical [as] players in bundles and episodes of care,” Bruno said.

In addition, the proposal includes hospice providers for the first time, which Bruno said could represent an opportunity for home health and skilled nursing providers that have those capabilities.

As for the exclusion of PAC companies from the application process as an initiator, Bruno said CMS could be attempting to improve the model through simplification.

“I wonder if CMS is looking for a way to present ways with fewer originating points and [test] if that is efficient for coordination, rather than multiple points — an effort to streamline communication and improve care coordination,” Bruno said. “Given the way CMS emphasized PAC providers and providers across the continuum, I would be hard-pressed to think it’s to exclude anyone.”

The return of mandatory bundles?

SNF providers cheered the demise of the mandatory Episode Payment Models and Cardiac Rehabilitation incentive payment model, and former Department of Health and Human Services secretary Tom Price had  been opposed to mandatory programs.

But during testimony before the Senate Finance Committee on Tuesday,  President Trump’s pick to replace Price expressed general support for mandatory payment trials.

“To test a hypothesis there around changing our health care system, [if] it needs to be mandatory as opposed to voluntary to get adequate data, then so be it,” Alex Azar said.

That stance puts Azar more in line with his predecessors under the Obama administration than Price — a fellow Trump nominee who was forced to step down amid a taxpayer-funded travel scandal — in Bruno’s mind.

“I don’t know that we will see anything break in the near term in the mandatory models, but it’s clear the BPCI Advanced Model, as it is laid out, has given itself room to align with future episodic payment models,” Bruno said.

Macmillan noted that the demise of the mandatory models paved the way for new voluntary programs such as BPCI Advanced.

“We’d be surprised if mandatory bundles would be announced at this point,” she said.

Written by Alex Spanko

Amy Baxter contributed reporting.

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