Signify Health exiting CMS' bundled payment program

Photo: John Fedele/Getty Images

Signify Health, a value-based care-focused analytics platform, will be ceasing its Episodes of Care Services (ECS) business and exiting the Centers for Medicare and Medicaid Services' Bundled Payments for Care Improvement-Advanced (BPCI-A) model, the company announced.

Signify said it was ending its involvement in the CMS program in light of the newly released CMS retrospective trend calculations that lowered target prices for episodes, which the company said reduces the opportunity for savings.

Ultimately, recent policies implemented by the Center for Medicare & Medicaid Innovation affecting BPCI-A pricing led the company to believe the program is unsustainable. The BPCI-A pricing methodology, officials said, has changed repeatedly over the course of several years and has recently included a retrospective adjustment that Signify said is not based on publicly available data.

The company added the adjustment can't be forecast accurately and is only known long after a performance period has ended, rendering it near-impossible to "take real-time action."

"The Company is currently in the process of contesting the most recent pricing calculations through CMMI's standard appeals process and advocating for CMMI to offer providers immediate relief," Signify said.

Signify said this strategy allows the company to invest more in future growth and diversification of its Home and Community Services business and its recent acquisition of Caravan Health. Officials expect the changes will positively impact 2023 earnings, and will provide additional guidance in its Q2 earnings report in early August.

WHAT'S THE IMPACT?

The company currently estimates that restructuring charges for severance and employee-related costs will fall between $25 and $35 million. There are about $85M of annualized direct ECS costs that will be eliminated. And there are roughly $60 million in annualized shared costs currently allocated to the ECS segment, of which Signify expects to eliminate about $30-35 million in annualized costs by the end of 2022 as it winds down the BPCI-A program.

In addressing the decision to end Signify Health's participation in the BPCI-A program, CEO Kyle Armbrester said, "We made this decision in partnership with our clients, who have repeatedly surpassed benchmarks for quality care and operational improvements with our support – including significant reductions in readmissions and increases in healthy days at home during an extremely challenging period for healthcare."

Armbrester does not expect the Caravan Health business to be affected by the changes. Caravan Health was acquired by Signify Health in March in part for its capabilities in shoring up providers' and accountable care organizations' population health management and value-based payment programs.

The business has done well since the acquisition, according to Signify, since its clients are aligning themselves with CMS' goal of having all Medicare beneficiaries in an accountable relationship with their healthcare provider by 2030.

THE LARGER TREND

In 2021, Signify Health teamed up with major insurer Humana and the Alamo Area Community Network to support Humana Medicare Advantage members in San Antonio through AACN's community resources and by connecting those in need with health-related social services such as food, transportation, housing and financial assistance. 

The AACN is a partnership of more than 40 organizations, with a number programs and services geared toward effectively impacting social determinants of health for San Antonio residents.

The partnership also included Signify Health's Social Care Coordinators, who provide outreach to Humana members to help them resolve their unmet needs.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com