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Rural hospitals not using bundled payment models, data shows

Smaller hospitals may lack the requisite expertise, personnel and financial resources necessary to make the leap.

Jeff Lagasse, Associate Editor

Among the byproducts of value-based care are bundled payment models, in which provider reimbursement is based on projected costs for episodes of care, including all the costs of hospitalization and beyond -- or at least through 90 days post-discharge.

Yet according to new research published in JAMA, the vast majority of hospitals that pursue bundled payment options are larger, urban and have relatively deep pockets. Their smaller, more rural and cash-strapped counterparts tend not to latch onto bundled payment initiatives.

This is despite the Bundled Payments for Care Improvement initiative, created by the Centers for Medicare and Medicaid Services in an attempt to incentivize the pursuit of bundled payments. BPCI-Advanced, established that same year, has been equally ineffective at shepherding rural hospitals toward value-based care.

Possible reasons include the requisite level of expertise, personnel and financial resources necessary to make the leap.


Looking at BCPI data from 2013 to 2018, as well as 2018 and 2019 BCPI-Advanced data, researchers examined the link between the duration of hospital participation in the programs and readmission rates and Medicare payments.

BPCI-Advanced attracted about double the number of hospital participants than did its forebear, but the makeup of those hospitals was mostly the same: larger, for-profit teaching hospitals in urban areas with high operating margins and relatively few patients dually enrolled in Medicaid.

Among those participating in BPCI-Advanced, almost 45% fully dropped out of at least one bundle; 15% percent dropped out of inpatient bundles altogether. Those that dropped out were primarily small for-profits in areas with scant resources.

Still, BPCI-Advanced boasts more participating hospitals than its predecessor, possibly due in part to financial incentives introduced under MACRA. The authors say better strategies are needed to attract and retain smaller hospitals, floating the idea of providing technical support to more easily enable participation from hospitals with thinner operating margins.


As of March, more than 250 providers had dropped out of BPCI Advanced, a 16 percent drop in numbers. Despite that, CMS still called participation in the bundled payment model robust.

At that time, 715 acute care hospitals and 580 physician group practices remained in the program, for a total of 1,295 Medicare providers. That's a loss of 252 providers from the 832 acute care hospitals and 715 physician group practices -- a total of 1,547 -- that began the program in October.

Twitter: @JELagasse

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