On September 23, the Centers for Medicare & Medicaid Services (CMS) released the final evaluation of its Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model. The evaluation, prepared by The Lewin Group with Abt Global, General Dynamics Information Technology, and Telligen, estimates that the model generated about $800 million in net Medicare savings over its eight model years.
Despite these savings, CMS said that BPCI Advanced “did not meet the Innovation Center’s criteria for expansion.” As the agency has explained, the Affordable Care Act authorizes the Secretary of Health and Human Services to expand models that “reduce or do not increase federal health expenditures while maintaining or improving quality for beneficiaries” provided other statutory requirements are met. Expansion also requires certification from the CMS Office of the Actuary, which concluded that earlier voluntary bundled models had not produced long-term net savings. CMS has indicated that it is using lessons from the experience to inform mandatory episode-based payment models such as the Transforming Episode Accountability Model (TEAM).
Background
BPCI Advanced ran from October 2018 through December 2025. It tested whether participating hospitals and physician group practices (PGPs) could achieve reductions in Medicare spending while maintaining or improving quality when held financially accountable for specific 90-day episodes of care. Each episode began with a qualifying hospitalization or outpatient procedure. Participants, who were paid under Medicare fee-for-service, qualified for reconciliation payments when spending fell below target levels or owed money to CMS when spending exceeded it.
The evaluators estimated that BPCI Advanced resulted in net Medicare losses of $65.7 million in its first two model years but noted that this was not statistically significant. There was a statistically significant loss of $113.7 million in the third model year.
In the model’s fourth year, CMS revised how it calculated target prices, changed its consideration of overlapping episodes and began to require participants to take accountability for broader groups of clinical episodes. This was followed by a reversal of financial results. Evaluators estimate that the program generated $915.8 million in net Medicare savings during Model Years 4 through 6. Another $85.8 million in savings was estimated for Model Years 7 and 8, although evaluators caution that this is likely overstated due to methodological limitations.
Participation in the program peaked in Model Year 3 with 1,010 hospitals and 728 PGPs. By Model Year 6, there were 106 hospitals and 87 PGPs. The count rose to 123 hospitals and 93 PGPs in Model Year 7, and 105 hospitals and 89 PGPs remained in the final year. Those who left the program cited a variety of reasons, including episode selection and target prices. The evaluators noted that the model’s voluntary participation and rates of attrition make it difficult to generalize results to other hospitals and markets.
Applicability
In an August 21, 2026, memo, the CMS Office of the Actuary (OACT) noted that it considered BPCI Advanced when evaluating the expansion of the Comprehensive Care for Joint Replacement (CJR) Model, known as CJR-X.
CMS is also applying lessons from BPCI Advanced to TEAM, which covers five specified surgical episodes. Because it mandates hospital participation in selected geographical areas, TEAM limits the sort of selection bias seen in BPCI Advanced.
The episodic periods in TEAM are also shorter, with participating hospitals responsible for spending during the hospital stay or procedure and the 30 days after discharge, rather than 90 days after a qualifying event as required in BPCI Advanced. CMS has said that TEAM builds on lessons from earlier episode-based models, including BPCI Advanced, and it used BPCI Advanced data in choosing TEAM’s five surgical episodes. In addition, TEAM target prices use regional spending and are adjusted for beneficiary and hospital characteristics.
Participants in TEAM could elect to immediately assume two-sided risk or choose an upside-only track in 2026. Safety-net, rural and certain other hospitals have additional options to phase in financial risk.
Post-acute care remains an important focus. The BPCI Advanced evaluation found that changes in post-acute care were a major source of lower episode spending, including fewer discharges to institutional post-acute settings and shorter skilled nursing facility stays. Those reductions generally occurred without increases in mortality or readmissions, although the evaluation identified some less favorable patient-reported findings.
CMS is also expanding mandatory episode-based payment through CJR-X. Beginning January 1, 2028, CJR-X will require most hospitals nationwide to participate in 90-day episodes for lower extremity joint replacement. The expansion is based on evidence from the original CJR model rather than BPCI Advanced.
For suppliers and other providers, the practical effect carries over. Under TEAM, Medicare providers and suppliers continue billing fee-for-service, but spending for included items and services counts toward the hospital’s episode spending. BPCI Advanced showed how that accountability can reshape decisions about where and how patients receive care after leaving the hospital.
