Value-Based Payment: Bundled Payments for Care Improvement Advanced Model (BPCI)

We can expect the federal government to include more specialists in value-based care models


In federal healthcare programs, fee-for-service (FFS) remains the primary reimbursement method. For years, CMS has been trying to move away from paying only for the volume of care without a yardstick to measure the quality of care. Increasingly, the federal government is experimenting with value-based care models, particularly bundled payments that reimburse for treatment of an entire episode of care.

In October 2022, the HHS Centers for Medicare & Medicaid Innovation Center (CMMI) extended one value-based payment model — its Bundled Payments for Care Improvement Advanced Model (BPCI) — for two more years, through December 31, 2025. The BPCI is a voluntary reimbursement program that encourages team collaboration during a patient’s episode of care.

The purpose of BPCI is to incentivize greater coordination across a patient’s healthcare team. Under the BPCI model, when patients are admitted to a hospital or receive an outpatient procedure, treating physicians will be encouraged to communicate with the patient’s other doctors. The hope is that if healthcare professionals are responsible for the total cost of a patient’s care, this will result in better immediate treatment and follow-up afterward, reducing the frequency and length of preventable hospital stays and emergency room visits.


On February 1, 2023, CMS released a Request for Applications (RFA) for eligible Medicare-enrolled providers and suppliers and Medicare Accountable Care Organizations (ACOs) to participate in BPCI in 2024-2025.


  • BPCI payment is tied to participant-reported quality measures in a retrospective bundled payment, with CMS making payments to participants following a reconciliation of all non-excluded Medicare FFS expenditures for a clinical episode against its target price.
  • As a voluntary program, BPCI participants may terminate their participation at any time without penalty after providing 90 days’ advance written notice.
  • CMS is recruiting participants — including eligible Medicare-enrolled providers and Medicare ACOs — to be part of the 2024-2025 BPCI advanced model. The application process is open until May 31, 2023.

Bottom Line

In the future, we can expect the federal government to include more specialists in value-based care models, building on some limited success from earlier models. Interest in the program may vary depending on the target prices for episodes and, based on those prices, the opportunity to realize savings. CMMI will make an effort to improve data sharing and create incentives within population-based models to encourage specialty care integration. To incentivize value-based specialty care models, CMMI may try to leverage beneficiary attribution and subpopulation targets.

Source BPCI Advanced. Accessed February 21, 2023.

Julie Barnes JD is the Founder and Principal of Maverick Health Policy. A former policy analyst, healthcare attorney, and Capitol Hill staffer, Ms. Barnes has more than two decades of experience helping the private sector navigate federal government activities that influence medicine.