Major changes are set to be made by CMS to Bundled Payments for Care Improvement (BPCI) Advanced next year. These changes are to stop the model from generating financial losses of close to $2 billion over the model’s ten performance periods.

The Model Year 4 begins on January 1, 2021. CMS’ Innovation Center will alter target price calculations by using an adjusted retrospective element. It requires participants to choose clinical episode groups versus individual episodes, remove the physician group practice offset, address clinical episode overlap, and change risk adjustment for major joint replacement episodes.

Brad Smith, Deputy Administrator and Director of CMS’ Innovation Center, said that the alterations to the BPCI Advanced model are prepared to improve target price accuracy for both CMS and model participants.

Smith also mentioned that to counter the selection effects observed in BPCI Advanced Model Years 1 and 2 the future bundled payment models would be mandatory.

Considering the ongoing global pandemic, recent changes could have a negative impact on participation in the BPCI Advanced in the next year.

Theresa Dreyer, the value-based care lead at the Association of American Medical Colleges (AAMC) said that the new process of selecting clinical episodes by group would put more dollars on the line.

She also said that some organizations will opt to exit the model. There is lot of uncertainty in the world and most organizations don’t have the appetite for bearing more financial risks right now.

Most of the participants will have to take on more clinical episodes as per the new requirement, thus increasing the risk involved with model participation.

This is quite true in the cases where the clinical episode groupings are complicated.

Infact some grouping appear to mesh at the first glance for example, CMS has created a group of different kinds of joint replacement. But one needs to note that not all groupings are so similar.

Aisha Pittman, VP of Policy at Premier, Inc said that there is a bit of concern with the groups. Are they the right groups of episodes? Do they really include similar care teams? If something similar gets added, it might result in just expanding your interventions or making minor tweaks.

But in case it is an episode that is touching different care teams, then it will roll out whole new interventions.

Pittman stated that in October, participants will receive data and then agreements will be signed in November. It’s a tight turnaround, especially if you are planning to add episodes to stay with the episodes that you are already in. Also, providers will be stuck for the next three years with the episodes they have chosen for Model Year 4.

The concern is that it will require too much efforts or having too little time to think through what would be your strategy before having to sign an agreement.