On January 31, 2013, the Centers for Medicare & Medicaid Services (CMS) announced the health care organizations selected to participate in the Bundled Payments for Care Improvement initiative (“BPCI”).  BPCI was created by the Affordable Care Act (“ACA”) healthcare reform law to assess whether bundling payments for services in a single episode of care can improve quality and lower costs.  BPCI also allows organizations to enter into payment arrangements that include financial and performance accountability for certain episodes of care.

CMS announced that more than 450 healthcare organizations will participate in the BPCI initiative.   Model 1 Awardees agree to provide a standard discount to Medicare from the typical Part A hospital inpatient payments, and hospitals and providers are able to share any gains that come from their care-redesign strategies.  Currently, there are no Texas Model 1 Awardees.  However, in the future, the CMS plans to announce a second opportunity for providers to participate in Model 1 starting in early 2014.

Models 2 and 3 follow a retrospective bundled-payment arrangement where expenditures are settled against a target price for an episode of care, while Model 4 involves a prospective bundled-payment arrangement in which a provider receives a lump-sum payment for the entire episode of care. In each of these three models, participants can choose up to 48 clinical episodes of care to test.

See the chart below for a list of Texas organizations that will participate in the BPCI program.