Comparison of Clinical Episode Outcomes between Bundled Payments for Care Improvement (BPCI) Initiative Participants and Non-Participants

TL;DR

This study compares outcomes and costs between hospitals participating in the BPCI initiative and non-participants for joint replacement and heart attack episodes, finding significant cost reductions for joint replacements without affecting readmission rates.

Contribution

It provides empirical evidence that bundled payments can reduce costs for joint replacement episodes without compromising patient recovery, highlighting the role of post-acute care reductions.

Findings

$444 reduction in Medicare payments for joint replacements

No significant change in readmission rates

Most savings from reduced post-acute care payments

Abstract

Objective: To evaluate differences in major outcomes between Bundled Payments for Care Improvement (BPCI) participating providers and non-participating providers for both Major Joint Replacement of the Lower Extremity (MJRLE) and Acute Myocardial Infarction (AMI) episodes. Methods: A difference-in-differences approach estimated the differential change in outcomes for Medicare beneficiaries who had an MJRLE or AMI at a BPCI participating hospital between the baseline (January 2011 through September 2013) and intervention (October 2013 through December 2016) periods and beneficiaries with the same episode (MJRLE or AMI) at a matched comparison hospital. Main Outcomes and Measures: Medicare payments, LOS, and readmissions during the episode, which includes the anchor hospitalization and the 90-day post discharge period. Results: Mean total Medicare payments for an MJRLE episode and the 90-day post discharge period declined $444 more (p < 0.0001) for Medicare beneficiaries with episodes initiated in a BPCI-participating provider than for the beneficiaries in a comparison provider. This reduction was mainly due to reduced institutional post-acute care (PAC) payments. Slight reductions in carrier payments and LOS were estimated. Readmission rates were not statistically different between the BPCI and the comparison populations. These findings suggest that PAC use can be reduced without adverse effects on recovery from MJRLE. The lack of statistically significant differences in effects for AMI could be explained by a smaller sample size or more heterogenous recovery paths in AMI. Conclusions: Our findings suggest that, as currently designed, bundled payments can be effective in reducing payments for MJRLE episodes of care, but not necessarily for AMI. Most savings came from the declines in PAC. These findings are consistent with the results reported in the BPCI model evaluation for CMS.