Photo: John Fedele/Getty Images
Signify Health, a value-based care-focused analytics platform, will cease its Episodes of Care Services (ECS) business and exit the Centers for Medicare and Medicaid Services’ Advanced Care Bundled Payments (BPCI-A) package, ie. the company said.
Signify said it is ending its participation in the CMS program in light of recently released CMS retrospective trend calculations that lowered target prices for episodes, which the company says reduces the opportunity for savings.
Finally, a recent policy implemented by the Center for Medicare & Medicaid Innovation affecting BPCI-A pricing has led the company to believe the program is unsustainable. BPCI-A’s pricing methodology, officials said, has changed multiple times over several years and recently included a retrospective adjustment that Signify said was not based on publicly available data.
The company added that the adjustment cannot be accurately predicted and is only known long after the performance period has ended, making it almost impossible to “take action in real time”.
“The company is currently in the process of challenging the latest price calculations through CMMI’s standard appeal process and advocating that CMMI offer providers immediate assistance,” Signify says.
Signify said the strategy allows the company to invest more in the future growth and diversification of its home and community services business and its recent acquisition of Caravan Health. Officials expect the changes to have a positive impact on earnings in 2023 and will provide additional guidance in their second-quarter earnings report in early August.
WHAT IS IMPACT
The company currently estimates that restructuring costs for severance and employee costs will fall between $25-35 million. There are about $85 million in annual ECS direct costs that will be eliminated. And there’s roughly $60 million in annual joint costs currently allocated to the ECS segment, of which Signify expects to eliminate about $30-35 million in annual costs by the end of 2022 as it spins off the BPCI-A program.
Commenting on 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 customers, who have repeatedly exceeded standards 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 time for healthcare.”
Armbrester does not expect the changes to affect Caravan Health’s operations. Caravan Health acquired Signify Health in March, in part for its capabilities in strengthening population health management and value-based payment programs for providers and accountable care organizations.
The business has done well since the acquisition, according to Signify, as its clients align with CMS’ goal that all Medicare beneficiaries have an accountable relationship with their health care provider by 2030.
A BIGGER TREND
In 2021, Signify Health partnered 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 connecting those in need with health-related social services such as food, transportation, housing and financial assistance.
AACN is a partnership of more than 40 organizations, with numerous programs and services focused on effectively influencing the social determinants of health for San Antonio residents.
The partnership also included Signify Health welfare coordinators, who provide access to Humana members to help them address their unmet needs.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
