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March 21, 2017

CMS delays start date for several new mandatory bundled payment models

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    Read Advisory Board's take on this story.

    CMS on Monday announced it plans to delay by three months several mandatory bundled payment models that had been set to take effect in July.

    Some industry experts say the delays, detailed in an interim rule published Tuesday in the Federal Register, raise questions about the future of mandatory payment models under the Trump administration.

    CMS delays mandatory cardiovascular, cardiac rehab bundled payment models

    Under the interim rule, CMS will delay, from July 1 to Oct. 1, two bundled payment programs for heart attack treatment and bypass surgery billed through Medicare. The new mandatory payment models—called the Acute Myocardial Infarction (AMI) Model and the Coronary Artery Bypass Graft (CABG) Model—are retrospective, 90-day bundles in which hospitals will need to reduce their episodic costs below a target quality-adjusted cost threshold lower than the historical average. The payment models are set to run in 98 metropolitan areas.

    The interim rule also will delay the Cardiac Rehabilitation Incentive Payment Model, which encourage providers in 90 U.S. regions to use cardiac rehabilitation, from July 1, 2017, until Oct. 1, 2017.

    CMS delays mandatory joint replacement bundled payment model expansion

    In addition, the interim rule will postpone, from July 1 to Oct. 1, the expansion of CMS' Comprehensive Care for Joint Replacement (CJR) Model.

    The mandatory payment model, which launched in April 2016, currently applies to 800 hospitals located in 67 U.S. regions that bill Medicare for hip and knee replacements. Under the expansion, hospitals in those 67 regions would receive retrospective bundled payments related to surgical hip/femur fracture treatment and recovery, under the Surgical Hip and Femur Fracture Treatment Model.

    According to Becker's Hospital Review, the interim final rule also delays certain program requirements for the CJR model from March 21 to May 20. 

    Reasons behind the delays

    CMS said the delays would give the agency more time to review the programs and would give providers more time to prepare for the payment changes under the models. The agency is accepting public comment on "the appropriateness" of the delays for 30 days after March 21.

    CMS also said it would prefer to align the payment periods with the calendar year, and as such is seeking comment on further delaying the start of cardiac bundled payments and CJR's expansion until Jan. 1, 2018.


    Stakeholders said HHS' decision to delay the mandatory payment models raises questions about how the Trump administration will approach the transition to value-based payments and the future of mandatory payment models.

    Ashish Jha, a professor of health policy at the Harvard School of Public Health, said the delays might suggest CMS will make the programs voluntary, which he said would affect the pool of participants and ultimately drive up costs. 

    However, some industry stakeholders say that voluntary bundled payment programs are more effective than mandatory programs. For instance, Carolyn Magill—CEO of Remedy Partners, a firm that helps hospitals and health systems with bundled payment programs—said, "We have found that voluntary models provide a forum for more engaged participation."

    Leading hospital groups, including the American Hospital Association, had criticized the payment models for being "too much, too soon." The Federation of American Hospitals in a statement praised the "decision to delay these bundled payment programs," saying that the organization, "welcome[s] a fresh set of eyes on these policies."

    According to RevCycle Intelligence, CMS' consideration of delaying the bundled payment models until 2018 also could have implications for whether providers could qualify for the higher incentives offered by the Advanced Alternative Payment Model track under MACRA's Quality Payment Program (Whitman, Modern Healthcare, 3/20; RevCycle Intellignce, 3/20; Ellison, Becker's Hospital Review, 3/20; MacDonald, FierceHealthcare, 3/21; Young, CQ HealthBest, 3/20 [subscription required]; AHA News, 3/20; Federation of American Hospitals release, 3/20).

    Advisory Board's take

    Eric Cragun, Senior Director, Health Policy

    Prior to his confirmation, HHS Secretary Tom Price repeatedly expressed concerns about CMS' mandatory bundled payment programs. The latest announcement indicates that the Trump administration continues to review these programs, although their ultimate fate is still not certain.

    For providers, this new interim final rule suggests that further changes and delays could be on the way in the coming months. The rule delays the start of the Episode Payment Models (EPMs), the expansion of CJR, and new cardiac rehab payments by three months. In addition, CMS is seeking comment on delaying the start dates even further, until January 1, 2018, and suggests that this additional delay might be preferable.

    CMS in the interim final rule also indicated that other aspects of the mandatory bundled payment programs may change, although the agency doesn't specify which elements of the program it is considering modifying, making it impossible to predict any changes.

    One important impact to watch is whether further delays or other changes push more providers into the MIPS track under MACRA's Quality Payment Program, when they might have otherwise qualified for the Advanced APM Track.

    We'll be discussing providers' Medicare risk strategies during an upcoming two-part webconference series. Part 1 will be on reevaluating Medicare ACOs and the path to risk, while Part 2 will be on expanding into the Medicare Advantage Market and ensuring a durable Medicare risk strategy.

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