GAO: Mandatory bundled payment programs more beneficial to CMS

Mandatory participation in Medicare bundled payment programs may yield better results, the U.S. Government Accountability Office (GAO) said in a report released January 22.

As of February 2018, CMS had tested or was testing six bundled payment programs: five voluntary and one mandatory. Since then, CMS has scaled back testing of bundled payment programs.

The GAO’s report found that although bundled payment programs have the potential to generate data that can be used to reduce costs and improve the Medicare program, the overall pool of participants and the design of voluntary bundled payment programs may reduce the value of the data and the programs. Generally, participants in both voluntary and mandatory bundled payment programs were larger in size and had a higher volume of patients than providers nationally. Participants differed from the majority of provides in several other ways, including higher baseline spending for episodes relevant to the programs in which they participated. In addition, the report found differences between voluntary and mandatory programs that could affect the quality of data derived from them.

The design and nature of voluntary bundled payment programs can create participant bias and lead to results that may be of less value to CMS, according to the report. Stakeholders were only likely to opt into a voluntary bundled payment program if they determined after analysis of the program that it would benefit them financially, creating and inherent bias in the results.

For example, according to CMS’ Bundled Payments for Care Improvement (BCPI) evaluation reports, the most common reason providers said they chose to participate in BPCI model 2 was because the model included services delivered after a hospitalization, such as post-acute care services, and the providers thought they would be able to deliver these services for less than the target price and thereby receive additional payment from CMS, the report said.

In addition, some participants chose to leave the program after they reassessed their potential for financial gain and determined they were facing downside risk. However, the report noted that participants in voluntary payment programs are highly engaged and voluntary programs could be ideal for early testing of novel concepts in care redesign.

While voluntary bundled payment programs largely benefit providers, mandatory bundled payment programs are more likely to yield generalizable data, according to the report. Mandatory programs are not subject to the selection bias inherent in voluntary programs and participants cannot choose to drop out if they determine they may face downside risk, and therefore the pool of participating providers and patients is large and diverse. This ensures that CMS has access to more generalizable data and is better able to determine whether a model is likely to reduce costs and improve care quality among all provider types rather than a small group.