From Winners to Losers: The Methodology of Bundled Payments for Care Improvement Advanced Disincentivizes Participation in Bundled Payment Programs

Background: The Bundled Payments for Care Improvement (BPCI) initiative improved quality and reduced costs following total hip (THA) and knee arthroplasty (TKA). In October 2018, the BPCI-Advanced program was implemented. The purpose of this study is to compare the quality metrics and performance between our institution's participation in the BPCI program with the BPCI-Advanced initiative. Methods: We reviewed a consecutive series of Medicare primary THA and TKA patients. Demographics, medical comorbidities, discharge disposition, readmission, and complication rates were compared between BPCI and BPCI-Advanced groups. Medicare claims data were used to compare episode-of-care costs, target price, and margin per patient between the cohorts. Results: Compared to BPCI patients (n = 9222), BPCI-Advanced patients (n = 2430) had lower rates of readmission (5.8% vs 3.8%, P = .001) and higher rate of discharge to home (72% vs 78%, P < .001) with similar rates of complications (4% vs 4%, P = .216). Medical comorbidities were similar between groups. BPCI-Advanced patients had higher episode-of-care costs ($22,044 vs $18,440, P < .001) and a higher mean target price ($21,154 vs $20,277, P < .001). BPCI-Advanced patients had a reduced per-patient margin compared to BPCI ($890 loss vs $1459 gain, P < .001), resulting in a $2,138,670 loss in the first three-quarters of program participation. Conclusion: Despite marked improvements in quality metrics, our institution suffered a substantial loss through BPCI-Advanced secondary to methodological changes within the program, such as the exclusion of outpatient TKAs, facility-specific target pricing, and the elimination of different risk tracks for institutions. Medicare should consider adjustments to this program to keep surgeons participating in alternative payment models. (C) 2020 Elsevier Inc. All rights reserved.