The Centers for Medicare & Medicaid Innovation launched the Bundled Payments for Care Improvement (BPCI) Initiative in 2013,1 a voluntary alternative payment model that holds participating hospitals, practices, or facilities accountable for quality and costs in 30-, 60-, or 90-day episodes of care. Participants can join for as many or as few of 48 eligible conditions as they wish and drop out without penalty. If cost targets are achieved, participants keep a portion of the savings; if cost targets are exceeded, participants reimburse Medicare a portion of the difference.
To our knowledge, no published data characterize participation or dropout from the risk-bearing phase of this program. Such information is important because voluntary alternative payment models are a key element in Medicare’s strategy to improve quality and costs of care.2
We evaluated model 2, which includes inpatient and post–acute spending and is the track selected by more than 99% of hospitals in BCPI. Hospitals could enroll for any of 48 conditions beginning in October 2013. We obtained quarterly public data sets from Medicare covering January 2014 through January 2017, which list participating hospitals and their planned end dates. Dropouts were defined as hospitals that initiated participation but were absent from participant lists prior to their planned end date. Hospital characteristics were obtained from the 2014 American Hospital Association Annual Survey Database.
Wilcoxon, χ2, and t tests were used to compare participating hospitals with nonparticipating hospitals. Adjusted odds ratios (aORs) of dropout were calculated for hospital-condition pairs using logistic regression with clustering by hospital. Kaplan-Meier calculations were used to estimate time to dropout, censoring hospitals still active as of January 2017.
Analyses were conducted using SAS (SAS Institute), version 9.4. Two-tailed P values less than .05 were considered statistically significant.
As of January 2017, 422 hospitals had signed up for BPCI model 2 (12.0% of 3523 eligible hospitals) for a mean of 7.2 conditions (SD, 9.6), yielding 3042 hospital-condition pairs (number of hospitals × number of conditions per hospital). Participating hospitals were more often nonprofit, urban, members of a system, and teaching hospitals, and had more beds and better operating margins (Table); participants were less likely to be safety-net hospitals.
Eighty-eight hospitals dropped out fully, 150 dropped out partially (for ≥1 condition), and 184 continued without change. Of the hospital-condition pairs, 1387 dropped out (Figure), ranging by condition from 24% to 83%. Hospital-condition pair dropout rates were 11.4% (95% CI, 10.3%-12.6%) by 6 months, 28.4% (95% CI, 26.8%-30.1%) by 12 months, 39.9% (95% CI, 38.2%-41.7%) by 18 months, and 47.0% (95% CI, 45.0%-48.9%) by 24 months after enrollment. Dropout varied by hospital type. For example, unadjusted dropout rates were 58.3% for hospital-condition pairs from for-profit hospitals (aOR, 2.17 [95% CI, 0.58-8.19]), 42.5% for nonprofit hospitals (aOR, 1.15 [95% CI, 0.32-4.16]), and 39.1% for public hospitals (reference group, P = .02) (Table). Higher operating margins were associated with lower odds of dropout.
Only 12% of eligible hospitals signed up for BPCI, and dropout was 47%. Differences between participants and nonparticipants, which confirm prior reports,3 and the high rate of dropout suggest that voluntary models may not have as much potential as hoped to improve quality and reduce costs across the diverse US health care landscape. One potential solution, Medicare’s mandatory bundling program,4 was criticized for imposing undue burden on clinicians,5 and the cardiac component of the mandatory program was recently cancelled.6 Other potential solutions include providing greater rewards for participation, which Medicare is pursuing under its new Quality Payment Program,2 or altering target cost amounts to make it easier for hospitals to achieve savings.
This study has limitations. Only hospital participants were analyzed, and patterns may differ for physician practices. Program performance was not examined because of the recent nature of the program. Why hospitals left the program is unknown and represents an important area for future research.
Patterns of participation and dropout in the BPCI program suggest that for voluntary alternative payment models to have a broad effect on quality and costs of health care, barriers to participation and strategies for retention need to be addressed.
Accepted for Publication: August 31, 2017.
Corresponding Author: Karen Joynt Maddox, MD, MPH, Washington University School of Medicine, 660 S Euclid Ave, St Louis, MO 63110 (firstname.lastname@example.org).
Author Contributions: Dr Joynt Maddox had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.
Concept and design: Joynt Maddox, Orav, Epstein.
Acquisition, analysis, or interpretation of data: All authors.
Drafting of the manuscript: Joynt Maddox, Epstein.
Critical revision of the manuscript for important intellectual content: All authors.
Statistical analysis: Orav, Zheng.
Obtained funding: Joynt Maddox, Epstein.
Administrative, technical, or material support: Epstein.
Conflict of Interest Disclosures: All authors have completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest. Dr Joynt Maddox reported doing part-time contract work for the United States Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. No other disclosures were reported.
Funding/Support: This work was funded by the Commonwealth Fund.
Role of the Funder/Sponsor: The funder had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.
Disclaimer: Dr Joynt Maddox, associate editor at JAMA, did not participate in the evaluation of this article or the decision to publish the study.
Additional Contributions: We thank Emily Crawford, MA (Harvard T. H. Chan School of Public Health), for her assistance with data collection. Ms Crawford received no additional compensation for her work beyond that associated with employment.
Centers for Medicare & Medicaid Services. Quality payment program: delivery system reform, Medicare payment reform, and MACRA
. 2016. https://qpp.cms.gov/
. Accessed June 4, 2016.