Should ACOs rush to sign up for Cohort 2 of BPCI?

CMS announced an update to BPCI Advanced Model on April 25th, 2019. https://innovation.cms.gov/Files/fact-sheet/bpciadvanced-my3-modeloverviewfs.pdf

The program was initially implemented to promote seamless, integrated bundled-price care for a number of inpatient and outpatient surgical procedures and episodes of care. You can read more from the CMS website at https://innovation.cms.gov/initiatives/bpci-advanced.

You can apply via a web portal CMS will only accept applications via the BPCI Advanced Application Portal / https://app1.innovation.cms.gov/bpciadvancedapp through June 24, 2019.

But should ACOs and other integrated health systems rush to apply? Meh! I've not been a fan of their system since it began. I've been developing and negotiating bundled surgery pricing for over 23 years. I don't like how they set up the program and how the rates are developed. I think they place providers at lots of unnecessary risk.

The Cohort 2 opportunity includes bundled case pricing for:

• Inpatient Clinical Episodes BPCI Advanced includes 33 inpatient Clinical Episodes for MY3
• Bariatric Surgery (New for MY3)
• Inflammatory Bowel Disease (New for MY3)
• Seizures (New for MY3)
• Transcatheter Aortic Valve Replacement (New for MY3)
• Disorders of the liver, excluding malignancy, cirrhosis, alcoholic hepatitis
• Acute myocardial infarction
• Back and neck surgery, excluding spinal fusion
• Cardiac arrhythmia
• Cardiac defibrillator
• Cardiac valve
• Cellulitis
• Cervical spinal fusion
• Chronic Obstructive Pulmonary Disease (COPD), bronchitis, asthma
• Combined anterior posterior spinal fusion
• Congestive heart failure
• Coronary artery bypass graft
• Double joint replacement of the lower extremity
• Fractures of the femur and hip or pelvis
• Gastrointestinal hemorrhage
• Gastrointestinal obstruction
• Hip and femur procedures except major joint
• Lower extremity/humerus procedure except hip, foot, femur
• Major bowel procedure
• Major joint replacement of the lower extremity (MJRLE)
• Major joint replacement of the upper extremity
• Pacemaker
• Percutaneous coronary intervention
• Renal failure
• Sepsis
• Simple pneumonia and respiratory infections
• Spinal fusion (non-cervical)
• Stroke
• Urinary tract infection 
• Participants can add/drop bundles at the end of 2020. By then, I believe many providers can be in a heap of hurt if they goofed on pricing and/or outcomes.
• CMS will be releasing more information about the program over the next eight weeks. I am betting they don't have their own research interpreted yet. Rushing could cost providers a lot of pain and loss and cause problems in smaller communities.

Sorry, but the CMS BPCI system just hasn't proven to me that it was organized, implemented or operated in a way that improves healthcare delivery or outcomes, and it is very risky for those that throw their hat in to try to be a team player.

Why? Because there are no standardized risk mitigation strategies that were implemented to address density and scale of the contracted payer's book of business. This trickles down to how providers adopt clinical guidelines vs going rogue, and it also impacts how providers decide to invest in software and technologies for predictive modeling for case volumes, timely intervention and clinical and operational workflows.

Another thing to consider is the "foot on two sidewalks" dilemma. When your hospital's revenue is divided between fee for service reimbursement and BPCI, the savings realized are largely at the expense of its own revenues. I believe that there are many other ways to internally contain costs so that margins are risk mitigated without cutting their noses to spite their faces. While I am a VERY STRONG proponent of bundled case pricing and help providers all over the world to create the formulas to use them, the CMS method for how they rolled them out doesn't work well in urban or rural settings. That's to say it is a misfit to what's really happening in surgical settings in many of the procedures they target with their program. To me, that's not sustainable. Instead, push back with other ways to distinguish your service, your costs and your outcomes with payers, if you aren't ready to assume this level of risk. Repeat after me: "NNNNNNNNO!" not "NNNNNNNNNNNNMaybe" or "NNNNNNNNNNNNNNOkay." It just isn't that difficult. One syllable and done.

A third concern I have is how risk and financial accountability metrics are measured and evaluated. With all due respect to actuaries, they themselves joke about how you tell them what you want to assess and measure and what you want the number to look like on the other side and let them do their stuff. Patient attribution, marketing messages about how great you are as a specialist with high risk (financial) conditions, all drive "adverse selected" patients to your doorstep. Adverse selection means "when sicker people choose you".

When you take steps to carve out high-risk, special needs individuals, the payer is bound to push back with lowered bonus incentives and savings pools to share. That's actually where the largest opportunities to show your clinical prowess and ability to reduce patient care delivery costs. That strategy can backfire on you. Do what you can. Take on risk you are prepared to "manage", rather than simply "assume". Then let's see what you've got in terms of innovation and clinical management and reform. But if you aren't ready - don't aim for the seemingly easy approach. Baby steps should be your beginner strategy. But I didn't see the possibility of Baby Steps as an option with Cohort 2. I beleive CMS has assumed that all the baby steps strategies have been deployed and tested. Nah. That's assumption of a fact not in evidence.

Wholistic approaches trump fragmentation when it comes to managing health care delivery costs. The whole person must be treated, not just one of 11 body systems one focuses on in their part of the comprehensive organism by specialists. Who manages overlap on the 11 system and who wins the turf wars? In the 1990s, I set up ad hoc teams of specialists and PCPs to determine, in advance, how the turf war rules of engagement would play out. EVERY CLIENT I ADVISED THIS WAY MADE MONEY WITH CAPITATION. and every client that didn't follow this advice lost large sums of money.

The knock down drag out fights between specialists and primary care providers cannot return to what we had to endure in the 1990s. PLEASE don't make us go through that again!

One way that I measure outcomes that is not taken into consideration is by using the RAND SF36? tool to collect data about patient reported outcomes. I use it mostly in my work in medical tourism where patients' symptoms and perceived functional gains are really important to measure across treatment locations and providers. Lately, I've found that measuring and re-measuring periodically not only helps my clients prove they delivered quality, safety and patient satisfaction, but those additional check-ins improve the post operative care management and often mitigate re-admissions and potential complications. Wholistic risk management in healthcare is your money shot! Believe it. But CMS (an d other payers) can't measure this through claims data. Bummer, man!

Another concern I have is contract drafting and authorship. The contracts most providers receive are authored in such a way that the ambiguity is pervasive (loaded with imprecise words such as sufficient, reasonable, timely, adequate, material, etc.) that tip the risk scales in the payer’s interest to reduce claims costs at the expense of the provider’s interest in minimizing risk and maximizing retained savings. If the knowledge workers involved in contract offer analysis, pushback and negotiation are not sufficiently trained or experienced, providers sign and get screwed more often than not. Show me a successful contract in recent years that produces "predictable savings for payers" and also benefits providers and their patients. There are ways to do it, but they aren't by any means a one-size-fits-all contract and metrics. How the payer intends to adjust risk, benchmark, and manage attribution will impact success.

Each contract must (vs "should") take into consideration an appropriate mix of incentives, feasibility and motivation by the physicians and health systems with which they contract. I describe this as "alignment". In the 1990s, we had integration and we didn't have much alignment. Hence, my 1997 book didn't mention "Alignment" in its title. The 2012 book did. Alignment makes or breaks the providers in BPCI deals.

And finally, if you read my previous article(s) on rural health and risk sharing agreements, you won't easily be able to argue away how important consumer demographics and behavior impact risk arrangements, treatment adherence, and utilization of specialists and technologies both in- and out-of-network. And if the payers have trimmed and tightened the network prior to putting out risk contracts with the strategy that implemented narrow networks to the point of ridiculous exclusions, out-of-network providers can run roughshod over participating providers attempting to manage risk.

Where to get help if you need it

Are you associated with a rural health provider facing shared- and full-risk contract offers? Do you have the knowledge workers on your internal team? If not, are you missing a coach or an interim analyst and negotiator. I can help, but I don't have time to cold call and I've never done so in my entire career. I'm not about to start now. If you need help, please feel free to call me at (800) 727.4160 or email me for an appointment for brief introductory chat at no cost or obligation.

But just remember one thing: I can't help everyone who calls. If your near-market competitor has already contracted with me to help them, I may not be able to help you if working for both of you can give rise to conflicts in terms of antitrust risk. To determine this, my conflict checking includes checking for hospitals and providers of similar services within not only the Standard Metropolitan Statistical Area, but also the areas defined within "health care commuting areas" in order to maintain the spirit of competition. So don't wait and then find you've been shut out. I tend to wait as much as 3-6 months between projects for competitors. And I won't be able to assign you to another consultant within my firm under my oversight. That doesn't work where antitrust risk is concerned. So make your call today if you need my help.

If you just need to learn the basics of capitation and shared- or full-risk contracting, the least expensive way to do that on your own is to search the Internet for my more recent articles by using your favorite search engine to search for Maria Todd or AskMariaTodd? and capitation or "managed care contracting" or "risk contracting managed care + Maria Todd or AskMariaTodd?, and you may also refer to my Managed Care Contracting Handbook, 2nd edition, which is available digital or printed from any retail bookseller or from the publisher. (I'm not permitted to sell them under my international publishing contract with CRC Press).