Consensus Comments for CMS on Expanding Bundled Payment for Care Improvement

Re: CMS-1632-P

The Health Care Transformation Task Force, which is made up of 34 organizations
including patients, payers, providers and purchasers,1 respectfully submits our
consensus comments on expanding the Bundled Payment for Care Improvement
Initiative (BPCI). Member organizations on the Task Force have BPCI programs that are
in the ‘at-risk’ Phase 2 stage at over 7,000 hospital and physician group sites across the

We believe Bundled Payments lead to high-quality, high-value care during Medicare
beneficiaries’ episodes of care and encourage coordination of care among providers.
These outcomes are achieved while ensuring access to care and freedom of choice for
all Medicare beneficiaries, regardless of their severity of illness.

In response to the Inpatient Prospective Payment System (IPPS) Proposed Rule for Fiscal
Year 2016 solicitation for public comments, we offer the following:

Breadth and Scope of Program Expansion/ Transition from Medicare FFS
Payments to Bundled Payments

  1. We support a voluntary, permanent, nationwide expansion of the bundled payment program as soon as it is certified by the CMS Office of the Chief Actuary (OACT).
  2. We encourage CMS to chart a path for Mandatory Expansion for select, high volume procedures shown (in the BPCI demonstration phase) to have achieved the greatest impact in quality improvement and cost reduction and that meet the CMMI and OACT certification standards for scaling successful alternative payment models. We believe this may be feasible in service lines such as orthopedics, with appropriate volume thresholds below which participation would remain voluntary.
  3. We recommend that any mandatory process provide organizations operating
    under comprehensive value-based payment arrangements with CMS for Part A
    and Part B services the opportunity to opt-out of the bundled payment program
    provided they can demonstrate the use alternative value-based payment models
    implemented within two-sided risk programs.
  4. We support a five-year transition to establishing target prices using a blend of
    national and regional data, with risk adjustment, similar to the Medicare
    Advantage Program or the evolution of the ACO model We believe this will
    promote a competitive marketplace and create a framework for improved long term
    management of the Medicare program. However, CMS should make impact
    data available to providers and suppliers of any proposed transition and seek
    public comment on the policy changes.

Episode Definitions

  1. We advocate developing methodologies for triggering certain bundles ‘at diagnosis’, rather than solely at acute intervention. We believe select surgical bundles and other episodes that are patient choice therapies lend themselves to at-diagnosis bundled payments. At-diagnosis triggers will capture the important clinical and patient decisions regarding pathway and site of care for a condition or disease. Evidence suggests Medicare can achieve materially greater savings from at-diagnosis triggers.
  2. We encourage CMMI to explore methods to accommodate changes in mix within an episode (e.g., an increase in hip fractures in the joint episode within the same MS-DRG over time) and allow for select additional exclusions for unrelated events. Current definitions create greater variation and risk in episode costs than truly exists. Appropriate risk adjustment would be a similar compensation for the insurance risk in the current models.
  3. We support exploration of bundled payments beyond acute inpatient events, particularly for high volume procedures and medical services that have multiple claims, such as colonoscopy. We believe such episodes may be much shorter and encourage health care providers to think broadly about the total cost of care. We also encourage consideration of bundled payments for common outpatient surgeries, such as hernia repair and knee arthroscopy.
  4. Explore the incorporation in the current episode exclusions definition ICD-9/10 procedure codes and HCPCS codes to accommodate services generally agreed to be unrelated to the episodes (e.g., hemophilia / other high cost drugs that are unrelated to the specific episode, colonoscopy in a joint bundle).

Models for Expansion

  1. For organizations choosing to participate in the retrospective payment option (existing Model 1, 2 or 3), we recommend a $300 fee and a $500 fee for surgical and medical episodes respectively as payment for care coordination and administrative services at the time CMS identifies a patient as accreting into a BPCI episode of care. This addresses a part of the substantial working capital challenge facing existing BPCI participants. The fee would be included as a cost in quarterly reconciliations. CMS could look to the Next Generation ACO model for possible ways to structure altering the cash flow to provide payments earlier in the bundle to assist in making care redesign investments.
  2. We furthermore support expanding Models 2 and 3 to include options for
    prospective payment to organizations meeting standards for reserve adequacy
    and proven ability to administer claims payments consistent with Medicare
    payment rules.
  3. Prospectively-paid bundled payments will require CMS to identify patients in a
    BPCI program from the UB04 claim form submitted by hospitals for payment.
    We recommend hospitals initially continue to receive DRG payments directly
    from their existing fiscal intermediary, with a lump-sum payment to Awardees or
    Conveners equal to the balance of the episode target price. Program
    participants should be enabled to pay providers and suppliers using existing
    Medicare payment rates, or separately negotiated rates, at their option.

Roles of Organizations and Relationships Necessary or Beneficial to
Care Transformation

  1. We urge CMS to appoint a multi-stakeholder advisory board to work with CMS
    and its contractors on all aspects of program design, pricing and quality, as well
    as minimizing the burden of unfunded administrative requirements. We believe
    this advisory role can assure roll-out of an improved BPCI program. We
    recommend that CMS utilize this advisory group in working with real early BPCI
    experience data to inform decisions.
  2. We also recommend that this group provide direction on the relationship
    between BPCI and other comprehensive value-based payment arrangements to
    assure the long-term success of each of these programs. We specifically note
    the need to address patient attribution issues and where savings will be accrued.
  3. We further recommend that precedence rules be modified for organizations
    moving from Phase 1 to Phase 2, so the program no longer penalizes those
    organizations requiring more time to accrete into Phase 2.

Setting Bundled Payment Amounts

  1. We believe baseline prices must remain fixed for one to two years with a
    transition beginning in the third and fourth years, subject only to trending, to
    allow the marketplace to be rewarded for efficient, high-quality health care
    delivery. Such trending should take into account baseline pricing, with a lower trend applicable for high-cost regions. Regular re-basing will create disincentives
    to participate in the BPCI program, as there is no longer a FFS benchmark
    unaffected by BPCI and ACO initiatives.
  2. Any changes to the pricing methodology should seek guidance from the
    proposed Advisory Board of BPCI participants, to avoid the shortcomings found
    in the existing approach to setting target prices.

Mitigating Risk of High-Cost Cases

  1. We support a continuation of the use of three risk tracks to truncate episode
    level risk for each Episode Initiator.
  2. We recommend that CMS only apply risk-track A rules (risk truncated at the 99th
    percentile) in determining facility-specific baseline prices. Then allow
    participants to select one of three risk tracks (99th, 95th, or 75th percentile) for
    the performance period. The additional cost to Medicare of providing financial
    protection at the 95th or 75th percentile level should be funded through a
    uniform percentage charge across all participants in each risk-track. This change
    would be budget neutral to CMS and would make the risk tracks perform more
    like traditional reinsurance, which would be far more equitable and predictable
    than the current system. The current application of the risk tracks to both the
    baseline pricing and performance period on a facility-specific basis can generate
    counterintuitive outcomes such as higher losses for participants that select risk
    tracks they think offer greater protection. Further, CMS should analyze risk
    thresholds separately based on hospital characteristics (i.e., major teaching vs.
    community hospitals; high DSH vs. low DSH hospitals). To the extent that the
    thresholds are materially different CMS should institute separate thresholds for
    the different peer groups.

Data Needs

  1. We advocate high levels of data transparency as a way to stimulate improvement in program performance and to drive innovation.
  2. We believe that providing multiple years of historic data, for all episodes and all
    patients for each Episode Initiator will enable programs to assess systemic
    challenges faced across service lines and lead to transformation affecting care
    processes across a broader cohort of Medicare patients.
  3. We urge CMS to ensure that there is full access and transparency around
    Medicare data to foster an efficient BPCI program.

Use of Health Information Technology

  1. We recognize that strong HIT systems will improve the chances of program
    success. For this reason, the Task Force continues to advocate open source solutions that lower the cost of implementing a BPCI program. This includes
    distribution by CMS of the software code used by CMS’ contractors to bundle
    claims into episodes, to create target prices and to manage reconciliations.
  2. We encourage CMS to promote standard data definitions and file sets available
    via HL7 connection to improve interoperability and access to data.
  3. We recommend that CMS deliver to Awardees/Conveners the 12 months of
    historical claims prior to anchor admission for all patients accreting into a
    bundled payment arrangement. These should be delivered as quickly as is
    feasible. This will assist program participants in risk stratification, readmission
    prediction and also speed the design of interventions designed to avert
    avoidable events.

Administering Bundled Payments

  1. We reiterate our support for a prospective payment option and exploring the
    triggering of select bundles ‘at diagnosis.’ We recognize that these changes will
    create additional administrative requirements.
  2. We believe Awardees or Awardee Conveners should be eligible to perform the
    claims payment function, although the standards required for CMS approval
    should include a demonstrated ability to pay claims using Medicare payment
    policies, including proven computerized claims systems similar to those used by
    Medicare Fiscal Intermediaries or Medicare Advantage Plans. A schedule of
    administrative requirements should be developed that Awardees/Conveners
    must demonstrate they have in place before CMS enters into a prospective
  3. We recommend that patient attribution for the episode be to the Episode
    Initiator with the preponderance of encounters during a performance period
    (rather than the current method which disqualifies all cases from providers who
    are registered to Medicare under multiple EI TINs during a performance

Quality Measurement and Payment for Value

  1. We advocate simplicity, low cost and ease of implementation in any quality
    measurement program. For gain sharing payment eligibility, we believe CMS
    may elicit provider cooperation and participation through a modest “pay for
    reporting” that would reward advanced systems to produce registry or EHR-based
    quality outcomes measures. Patient-specific quality measures should be
    limited to a parsimonious set of outcome measures, with a focus on patient-reported
    experience and functional outcomes.
  2. Payments to gain sharers should continue to be impacted by these measures,
    although we believe there should be no impact on the discount received by CMS
    for these measure.

Modification of Medicare Payment Policies for BPCI Patients

  1. We urge CMS to waive certain payment policies, at the option of Awardees/Conveners/Facilitators, to improve the performance of the BPCI program. Specifically:
    1. Allow BPCI participants to use Home Health Agency services without
      triggering a Home Health Resource Group bundled payment. Accessing a
      modified form of the LUPA payment would allow participants to use only
      those HHA services ordered by the Patient’s physician, on a per visit
      basis, rather than a case rate.
    2. Pay for DME supplies for in-home infusion therapy, to enable care in the
      home for patient’s who otherwise are admitted to a PAC facility.
    3. Allow payment for dialysis in an outpatient setting (for non-ESRD
  2. In addition, we believe that the payment waivers that CMS proposed to apply
    within the Medicare Shared Savings Program (MSSP) for those providers who
    take risk should apply to any expansion of the BPCI program. Specifically, we
    urge CMS to finalize the following waivers for a bundled payment expansion:

    1. Hospital discharge planning requirements that prohibit hospitals from
      specifying or otherwise limiting the information provided on posthospital
    2. The skilled-nursing facility (SNF) three-day stay rule, which requires
      Medicare beneficiaries to have a prior inpatient stay of no fewer than
      three consecutive days in order to be eligible for Medicare coverage of
      inpatient SNF care;
    3. Medicare requirements for payment of tele-health services, such as
      limitations on the geographic area and provider setting in which these
      services may be received; and
    4. The homebound requirement for home health, which requires that a
      Medicare beneficiary be confined to the home to receive coverage for
      home health services.
  3. Allow for the payment policy waivers to cover episodes that are later deemed to
    be ineligible (e.g., due to ESRD coverage gained during the course of the Episode)
    in order to encourage the use of these waivers (e.g., SNF 72 hour rule) without
    the risk of the provider (or more importantly the beneficiary) being liable for
    reimbursement to the provider for services they had expected to be covered.

In addition to the members of the Task Force (listed in the name block below), the
Health Care Incentives Improvement Institute contributed to, and support the contents
of, this communication.

Thank you for considering our viewpoints on this important public policy matter. For
more information, please contact Susan Winckler at

Lee Sacks
EVP Chief Medical Officer
Advocate Health Care

Francis Soistman
Executive Vice President & Head of Government

Farzad Mostashari
Founder & CEO
Aledade, Inc.

Peter Leibold
Chief Advocacy Officer

Emily Brower
Executive Director, Accountable Care Programs
Atrius Health

Christina Severin
President and CEO
Beth Israel Deaconess Care Organization

Dana Gelb Safran
SVP, Performance Measurement & Improvement
Blue Cross Blue Shield Massachusetts

Joe Hohner
Executive Vice President, Health Care Value
Blue Cross Blue Shield of Michigan

Kristen Miranda
VP, Strategic Partnerships & Innovation
Blue Shield of California

Mark McClellan
Director, Health Care Innovation & Value Initiative
Brookings Institute

Tony Clapsis
VP and EA to Chairman, President, and CEO
Caesars Entertainment Corporation

Carlton Purvis
Director, Care Transformation
Centra Health

Prentice Tom
Chief Medical Officer
CEP America

Lynn Guillette
Director of Revenue
Dartmouth – Hitchcock

Elliot Fisher
Director for Health Policy & Clinical Practice
Dartmouth Institute for Health Policy and Clinical Practice

Lloyd Dean
President & CEO
Dignity Health

Chris Dawe
Managing Director
Evolent Health

Ronald Kuerbitz
Chief Executive Officer
Fresenius Medical Care

Steve Ondra
SVP and Enterprise Chief Medical Officer
Health Care Service Corporation – Illinois Blues

Dr. Richard Merkin
President and CEO
Heritage Development Organization

Lynn Richmond
Executive Vice President

Debra Ness
National Partnership for Women & Families

Jay Cohen
Senior Vice President

Kevin Schoeplein
President & CEO
OSF HealthCare System

David Lansky
President & CEO
Pacific Business Group on Health

Timothy Ferris
SVP, Population Health Management
Partners HealthCare

Jay Desai
Founder and CEO

Blair Childs
Senior Vice President

Joel Gilbertson
Senior Vice President
Providence Health & Services

Steve Wiggins
Remedy Partners

Michael Slubowski
President & CEO
SCL Health

Gaurov Dayal
President, Health Care Delivery, Finance & Integration
SSM Health Care

Paul Neumann
EVP & General Counsel
Trinity Health

Judy Rich
President & CEO
Tucson Medical Center Healthcare

1 The Health Care Transformation Task Force (the Task Force) came together to accelerate the pace of delivery system transformation. We share a common commitment to transform our respective business and clinical models to deliver the triple aim of better health, better care and reduced costs. Our organizations aspire to put 75 percent of their business into value-based arrangements that focus on the triple aim by 2020.