LAUSR

The importance of institutional or noninstitutional postacute care (PAC) for Medicare beneficiaries is underscored by the fact that at least two of every five beneficiaries discharged from an acute inpatient stay will require PAC services. Moreover, PAC use has gradually increased from 41% in 2010 to 44% in 2018, and the Centers for Medicare and Medicaid Services (CMS) spends an estimated $58 billion on this care annually. This investment is critical for patients who cannot recuperate independently at home for several reasons, including their clinical condition, the absence of a caregiver, or the state of the home environment. However, several concerns exist regarding the variability in PAC outcomes and spending, and in the selection of patients for these settings. Moreover, because PAC is a significant contributor to episodic spending, it has been the focus of several payment reforms. Notably, savings have been realized in reforms such as the Medicare Shared Savings Program and the Comprehensive Care for Joint Replacement by hospitals reducing discharges to PAC facilities, namely skilled nursing facilities (SNFs), without a commensurate decline in clinical quality. Although many reforms have assigned hospitals the responsibility of reducing episodic spending, the Bundled Payments for Care Improvement (BPCI) initiative is among the few reforms that has held PAC facilities accountable for care through its Model 3. The BPCI was a voluntary bundled payment reform launched in 2013, which bundled the spending for care (inpatient stay and/or PAC) and set fiscal targets for providers to earn reconciliation payments or repay CMS. The BPCI provided incentives for hospitals, physicians, PAC providers, and other entities to improve care coordination while reducing spending for Medicare beneficiaries enrolled in one or more of 48 medical or surgical episodes of care. BPCI Models 1, 2, and 4 held hospitals accountable for meeting spending benchmarks, while Model 3 focused on PAC facilities. The BPCI ended in 2018, and the BPCI Advanced model now builds upon the successes and lessons of the BPCI.