More than 2,100 healthcare providers have passed through the review stage and will begin taking on financial risk in the Centers for Medicare and Medicaid Services Bundled Payments for Care Improvement Initiative, the federal agency announced on Thursday.
But while CMS celebrated the news as evidence that its move towards value-based payments is gathering momentum, the reality is more than half of providers that originally signed up have dropped out.
CMS on Thursday said 360 organizations have directly entered into bundled payment agreements with the agency, and an additional 1,755 providers have partnered with those organizations as of July. But CMS acting administrator Andy Slavitt in June said there were more than 7,000 providers in the "at-risk" stage of the BPCI model.
Participating providers include acute care hospitals, skilled nursing facilities, physician group practices, long-term care hospitals, inpatient rehabilitation facilities and home health agencies, CMS said.
The bundled payment program gives set payments for the entire care episode, rather than paying for each step of treatment on a fee-for-services basis. So far, CMS is bundling payments for 48 conditions including knee and hip replacements and coronary artery bypass surgeries. The hope is the shared payment pool will encourage doctors and administrators to work together better to coordinate care and manage costs. But going over the set costs could mean penalties for participating organizations.
While the total number of participating providers or partner organizations has plummeted, the 360 organizations directly contracting with CMS as of July 1 is an increase.
The BPCI includes four models based on the organizations and the type of care episode. However, it's only in models 2, 3 and 4 where providers begin to take on financial risk.
CMS, which as the administrator of Medicare and Medicaid is the largest payer in healthcare, is aggressively pushing a host of value-based reimbursement models, including accountable care organization programs, and said it expects to have 50 percent of its payments tied to value by 2018.
However, the bundled payment program is not the only model seeing drop-offs.
For example, the Pioneer ACO model, in which CMS enlisted some of the top and most stable healthcare providers to participate in a risk-sharing model, only has 19 providers left despite starting with 32.
The Medicare Shared Savings ACO program has also seen participants walk away.
While value-based initiatives aim to improve care and manage costs, CMS programs are taking their toll on healthcare providers in the form of reimbursement penalties for things like hospital-acquired conditions. In fact, a recent tally from CMS found more than half of U.S. hospitals will be hit with penalties in 2016 for their readmission numbers.