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Bundled Payment Program Fails to Reduce Medicare Spending, Drives Home Health Use

Posted on Friday, October 12, 2018 5:34 PM

The expectation for Bundled Payments for Care Improvement (BPCI) was that it would save Medicare millions while making it easier for providers to get paid.  A new report this week shows a very different picture, the program has cost Medicare to lose hundreds of millions of dollars. 

The Model 2 track, the largest BPCI program in terms of episodes cost Medicare $202.1 million from the fourth quarters of 2013 and 2016, or $268 per event, according to the new report, by the Lewin Group.  The Model 3 initiative, resulted in an $85.2 million hit during that timeframe, which equates to $921 per episode.

The BPCI program lost money because of reconciliation payments to providers that met certain performance benchmarks. The Lewin Group places blame on CMS’ decision to eliminate providers’ downside risk. In this program, providers could only share in any savings, while not facing any monetary penalties for failing to perform.

“Reconciliation payments were greater than anticipated because CMS eliminated downside risk during part of the intervention,” the Lewin Group stated in its report.

Click here for the full article.

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