First Year Experience of a Quaternary Medical Center with Heart Failure Bundled Payment

Abstract

Background: The Centers for Medicare and Medicaid Services (CMS) Bundled Payments for Care Improvement (BPCI) initiative is an alternative payment model designed to link payments for multiple services received during an episode of care. The goal is to achieve higher quality and greater coordination of care at a lower cost to CMS. Inova Fairfax Hospital joined the BPCI Model 2 program for heart failure effective October 2015, assuming both upside and downside risk for a 90-day episode of care. Cost targets for each of the 3 heart failure MS-DRGs (291–293) were established based on 2009–2012 Medicare spending. Performance improvement initiatives included nurse navigators (inpatient and post-acute), enhanced order sets (ED, hospital, home health), physician documentation education, and skilled nursing facility network development. While our institution achieved cost savings during the first year, we sought to better understand the factors responsible for this success and opportunities for improvement. Methods: Eligible patients likely to be billed to a heart failure MS-DRG, excluding ESRD, were identified at admission and followed for 90 days post discharge. CMS paid claims were analyzed to study episode cost performance compared to baseline, including readmissions, skilled/acute rehab, home health, outpatient procedures, and home infusion therapies. Results: There were 298 episodes of care: 48.7% were billed MS-DRG 291 (high acuity) and 51.3% were billed MS-DRG 292 or 293 (low acuity). We successfully reduced skilled/acute rehab utilization from 30% to 23% and 90-day readmissions from 34% to 31%, achieving a 1% savings from our cost target. Overall, 73% of episodes were breakeven or favorable, with high acuity patients less likely to achieve savings compared to low acuity patients (64% vs 82%) and 7% of episodes exceeded target by a cost of $30,000 or more, with drivers including readmissions, extended skilled/acute rehab stays, elective TAVR, planned ICD implants or replacements, and high cost home infusion therapies. Conclusions: During the first year of participation, cost savings were primarily driven by reductions in skilled/acute rehab utilization and readmissions, while care for high acuity patients was more likely to result in economic losses. Quaternary referral centers participating in BPCI for heart failure are vulnerable to negative cost performance due to providing medically complex care for heart failure patients.