CMS Proposes to Cut Mandatory Bundling Programs

Ken Terry

August 16, 2017

The Centers for Medicare & Medicaid Services (CMS) proposed on Tuesday to cancel two new mandatory bundled payment programs and make extensive changes to another that is currently underway in hundreds of hospitals. But these changes do not represent a retreat from bundled payments, according to a CMS news release.

In its proposed rule, CMS said it would make hospital participation in the Comprehensive Care for Joint Replacement model (CJR) voluntary in 33 of the 67 areas in which the program is currently mandatory. In addition, it proposed allowing low-volume and rural hospitals in all of the current CJR geographic areas to participate voluntarily.

The two mandatory programs that would be canceled are the Advancing Care Coordination Through Episode Payment Models (EPMs) and the Cardiac Rehabilitation Incentive Payment Model. The CMS proposal left open the possibility that the programs might someday be revived on a voluntary basis.

EPMs consist of bundled payments for episodes of care involving acute myocardial infarction, coronary artery bypass grafts, and surgical hip and femur fracture treatment. The Cardiac Rehabilitation Incentive Payment Model is an adjunct to the EPMs, which cover acute and postacute care. It offers bonuses to some of the hospitals participating in the EPMs provided they coordinate cardiac rehabilitation and support beneficiary adherence to postacute care plans.

In May, CMS postponed the start dates of the new programs from October 1, 2017, to January 1, 2018. In addition, CMS issued an "interim rule with comment" on the mandatory programs that portended the regulatory changes in the new proposal.

Health and Human Services Secretary Tom Price, MD, has said that he disapproves of CMS' mandatory bundled payment programs. The American Hospital Association has also been a vociferous critic of the mandatory approach.

The CJR demonstration, which started April 1, 2016, requires about 800 hospitals to take bundled payments for hip and knee replacement surgery. These payments cover hospital and physician services and 90 days of postdischarge care.

"Maximum Flexibility"

Going forward, CMS "expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts," according to the news release. "The changes in the proposed rule would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models."

CMS Administrator Seema Verma said in the release, "Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries."

The leading candidate for the new bundled payment models is BPCI-Advanced, the next phase of CMS' Bundled Payments for Care Improvement (BPCI) program, which terminates in 2018. According to Becker's Hospital Review, the announcement of BPCI-Advanced is expected this summer. A CMS spokesman had no comment.

The 5-year BPCI demonstration offers participants bundled payments for 48 different clinical episodes of care in four models, three of which affect physicians involved in these episodes. Those models include retrospective payments for inpatient and postacute care, retrospective payments for postacute care only, and prospective payment for acute care hospital stay only.

The CMS proposal would also correct an error in how CMS reimburses physicians for telehealth services in the CJR bundled payment model. CMS admits that it made a mistake in not including practice expense relative value units (RVUs) in its calculation of prices for these services. Under the proposal, it would start using the same practice expense RVUs that it assigns to work in healthcare facilities.

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