Voluntary Bundled Payments May Not Help Cut Post-Acute Spending

Voluntary bundled payment programs might not be the best way of tackling spending on post-acute care (PAC), at least according to a research letter in the Journal of the American Medical Association.

In fact, just 3.7% of PAC organizations took part in Model 3 of the Bundled Payments for Care Improvement (BPCI) initiative, which targets PAC organizations as the major bearers of risk. In addition, 43.2% of those participants stopped participating by the second quarter of 2017.

The researchers used Medicare BPCI participation reports from the first quarter of 2014 through the second quarter of 2017 to identify changes in BPCI participation, and restricted the sample to risk-bearing participants. They also used SNF data from Nursing Home Compare and surveys to compare SNF characteristics.


SNFs stick with it — if they start

Skilled nursing facilities accounted for 89% of the organizations that took part in Model 3.

In order to receive a share of the savings under that model, participating organizations have to spend less than a target price they receive for 30-, 60-, or 90-day PAC episodes. Organizations that spend more have to pay the Medicare program some of the difference.


Model 3 is unique in targeting PAC organizations as the lead bearers of risk rather than acute care hospitals, the authors noted. Risk-bearing participation in BPCI Model 3 peaked at just 1,177 PAC organizations, however, including 1,059 SNFs.

That accounts for just 6.8% of the 15,513 eligible SNFs.

The question is why.

“I think the message they sent was that the particular setup of Model 3 was not something most SNFs were interested in,” A. Jay Holmgren of Harvard Business School, who was corresponding author on the letter, told Skilled Nursing News in an email. “It’s impossible to say exactly why that was, though our results suggest that lower quality, independent SNFs were less likely to participate – perhaps due to a lack of organizational resources necessary to be successful that larger, multi-facility organizations have.”

The researchers defined “persistent participation” as remaining in the program through that second quarter of 2017, and not many organizations met the definition. Of the 1,177 participating PAC organizations, 669 were “persistent participants.” SNFs did make up a significant portion of these, at 581, however.

SNFs with two to three stars or four to five stars from the Centers for Medicare & Medicaid Services (CMS) were more likely to be persistent participants, as were for-profit operators and buildings that were part of a multi-facility organization. SNFs based in a hospital, on the other hand, were less likely to have that status.

“Whether such organizations have an advantage in controlling costs should be assessed,” the researchers noted.

Make it mandatory?

The BPCI initiative is voluntary, and that might be a problem, Holmgren and colleagues noted in their discussion of the findings.

“To have a broader effect on PAC, policy makers may wish to explore programs that are either mandatory for PAC organizations or hold acute care hospitals responsible for PAC spending,” they wrote in the letter published June 25.

But the new BPCI model rolled out in January by CMS is still voluntary. It also focuses primarily on hospitals and physicians — under Bundled Payments for Care Improvement Advanced (BPCI Advanced), SNFs and home health agencies cannot be episode initiators.

“Hospitals may be more likely to pressure SNFs to control costs related to the bundled payment episodes under this new model, but it’s hard to say how it will play out until we have data available to empirically examine,” Holmgren told SNN.

Written by Maggie Flynn

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