The majority of clinical episode groups participating in the Bundled Payments for Care Improvement initiative are generating Medicare savings, according to a CMS analysis.

The study showed that orthopedic surgery under Model 2 generated savings of $864 per episode, while improving postdischarge outcomes. Cardiovascular surgery episodes under Model 2 did not show any savings, but quality of care was preserved, according to the analysis. In total, 11 out of the 15 clinical episode groups analyzed showed potential savings to Medicare.

“While there is more work to be done, CMS continues to move forward to achieving the administration’s goal to have 50% of traditional Medicare payments tied to alternative payment models by 2018,” Patrick Conway, MD , CMS acting principal deputy administrator and chief medical officer wrote in a blog post . “Bundled payments continue to be an integral part of transforming our health care system by creating innovative care delivery models that support hospitals, doctors, and other providers in their efforts to deliver better care for patients while spending taxpayer dollars more wisely.”

The Bundled Payments for Care Improvement (BPCI) initiative was designed to test whether linking payments for all providers involved in an episode of care reduces Medicare costs, while maintaining or improving quality of care. To participate, BPCI awardees – which include hospitals, physician groups, post-acute care (PAC) providers, and other entities – enter into agreements with the CMS that hold them accountable for total Medicare episode payments. Such agreements specify choices among four payment models, 48 clinical episodes, three episode lengths, and waiver options.

From October 2013 through September 2014, the first full year of the initiative, 94 awardees, including hospitals, physician groups, and post–acute care providers, entered into agreements with the CMS to be held accountable for total Medicare episode payments. Under the initiative, nearly 60,000 episodes of care were initiated, according to the CMS. BPCI-participating providers tended to be larger, operate in more affluent urban areas, and have higher episode costs than providers who did not participate.

An analysis of Model 2 showed that:

• Average standardized Medicare payments for hospitalization and 90 days post discharge were estimated to have declined by $864 per orthopedic surgery episode at BPCI-participating hospitals, compared with nonparticipating hospitals.

• For cardiovascular surgery, there was no statistically significant difference in Medicare payments for the index hospitalization and the 90-day post discharge period between the BPCI and comparison episodes.

• For cardiovascular surgery, there were no statistically significant changes in hospital readmissions within the 30 or 90 days post discharge, or any of the assessment-based quality measures between the BPCI and comparison populations.

For most clinical episode groups in Model 3 , there were no statistically significant differences between BPCI and comparison episodes from the baseline to the intervention period in total Medicare standardized allowed payments during the qualifying inpatient stay and 90-day postdischarge period or in quality measures, the analysis found.

Over the next year, the CMS plans to have significantly more data available on the initiative, enabling the agency to better estimate effects on costs and quality, according to Dr. Conway. Future evaluation reports are expected to have greater ability to detect changes in payment and quality because of larger sample sizes and the recent growth in participation in the initiative.

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