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April 26, 2017

Should CMS continue mandatory bundled payment models? Hospitals disagree with each other

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    Some hospitals and other stakeholders are pressing CMS to make certain mandatory bundled payment initiatives under Medicare voluntary.


    Last month, CMS published an interim rule that details plans to delay by three months several mandatory bundled payment models that had been set to take effect in July.

    Under the interim rule, CMS delayed 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 delayed the Cardiac Rehabilitation Incentive Payment Model, which encourages providers in 90 U.S. regions to use cardiac rehabilitation, from July 1 until Oct. 1.

    In addition, the interim rule postponed from July 1 to Oct. 1 an 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.

    The interim final rule also delays certain program requirements for the CJR model from March 21 to May 20.

    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 accepted public comment on "the appropriateness" of the delays.

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

    CMS received 47 comments on the interim rule, Modern Healthcare reports.

    Some hospitals ask CMS to change mandatory programs to voluntary, cancel programs altogether

    According to Modern Healthcare, hospitals throughout the country in comments submitted to CMS asked the agency to change the programs from mandatory to voluntary, arguing that many health systems do not have the resources necessary to assume extra financial risk under the programs or to invest in the care-management services and health IT needed to comply with the initiatives.

    For instance, the Greater New York Hospital Association wrote that the mandatory bundled payment programs would place a significant hardship on safety net hospitals that heavily rely on Medicaid, Medicare, and disproportionate-share hospital payments. The group wrote, "Medicare and Medicaid rates no longer cover an adequate level of operating and capital costs, and the resulting lack of margins for safety net hospitals does not allow for capital investment."

    According to Modern Healthcare, the California Hospital Association and the Missouri Hospital Association (MHA) expressed similar concerns in their comments.

    In addition, MHA urged CMS to cancel the mandatory bundled payment models completely, saying they "trea[t] the nation's hospitals as lab rats in the experimentation, with hospitals randomly assigned to implement components of a growing number of complex CMS initiatives." MHA added, "CMS' assignments and their unforeseen outcomes can affect a hospital's ability to survive or thrive."

    The National Association of ACOs (NAACOS) urged CMS to suspend the mandatory bundled payment initiatives until the agency addresses conflicts the programs pose with accountable care organization (ACO) arrangements, RevCycleIntelligence reports. NAACOS President and CEO Clif Gaus wrote, "The overlap of ACOs with bundled payment initiatives such as the mandatory bundles … creates a clear conflict with the ACO model." He added that while NAACOS "support[s] voluntary bundled payment models," it "strongly oppose[s] … use of mandatory bundled and episode-based payment models."

    Others say CMS should keep programs mandatory, express concerns about delays

    However, other hospitals urged CMS to keep the programs mandatory. For example, Geisinger Health System argued that making the bundled payment models voluntary could allow some hospitals to selectively transfer or refer complex patients to providers that are not participating in the programs.

    The American Hospital Association (AHA) wrote that it supports the models' goal to increase health care providers' focus on coordinating patient care, as well as delaying the models' implementation until Jan. 1, 2018. However, AHA urged CMS not to delay the models beyond Jan. 1, 2018, writing that any additional delays "would effectively turn the start date for these programs into a moving target—hospitals and health systems would continue to expend resources to prepare for something that we fear would never come to fruition" (Dickson, Modern Healthcare, 4/24; RevCycleIntelligence, 4/24).

    One step toward CJR success: Know your joint replacement episode spending

    Advisory Board's Data and Analytics Group has developed a tool to help you assess your episodic spending and ensure your organization is on track for success under CJR.

    Our Joint Replacement Episode Profiler allows you to view national average episodic spending allocation by site of service and time intervals following anchor discharge, as well as modify your view from five to 90 days following anchor hospitalization.

    Access the tool

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