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The Centers for Medicare and Medicaid Services (CMS) remains committed to episode-based payment models as part of its multidimensional strategy to advance accountable care. Its most recent bundled payment program, Bundled Payments for Care Improvement (BPCI) Advanced, has been extended through 2025. In 2023, CMS announced plans to develop a new mandatory model that builds upon lessons learned from earlier programs, which have demonstrated care transformation and reduced spending while maintaining high-quality outcomes for many episode types. Early reports from BPCI Advanced have also reported reduced spending, although bonus payments yielded net losses for Medicare. A major question for CMS is how to best coordinate bundled payments with population-based approaches, such as accountable care organizations (ACOs).
Early indications are that CMS anticipates making the new model mandatory. Yet, if this were to be the case, the future of bundled payments risks losing a major player—physician group practices (hereafter physician groups). Given that it is likely infeasible to mandate participation from physician groups, which vary in size and ability to assume financial risk, a mandatory model implies that hospitals would be the target participant.