Blog Post

CMS appears set to cancel mandatory episodic payments

August 14, 2017

    On Thursday, the Office of Management and Budget (OMB) appears to have begun reviewing a new proposed rule titled: "Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model."

    This proposed rule seems to have replaced a prior version of the Episode Payment Model (EPM) regulations that had been pending OMB review since April under a different title.

    That previous title didn't imply the programs were set to end; the new title clearly implies that CMS plans to cancel the mandatory EPM and Cardiac Rehab programs, which were first proposed back in December 2016. It also appears that CMS in the proposed rule will offer some commentary on the mandatory Comprehensive Joint Replacement (CJR) program, although we don't know whether the CJR program will suffer a similar fate, be reestablished a voluntary program, or largely maintain in its current form.

    As we noted back in March when CMS first announced a delay to the EPM program, these developments are not entirely surprising given that current HHS Secretary Dr. Tom Price argued late last year—when he was a member of Congress—that certain mandatory bundled payment programs exceeded the authority of the Center for Medicare and Medicaid Innovation (CMMI).

    More information to come

    The pending rule is only a proposal and has not been released to the public, so once it clears OMB review it would be subject to public comment before being finalized. That means that although it appears the EPM and cardiac rehab models are set to be cancelled, much can still change.

    We'll be watching the developments closely in the coming days and weeks and will post updates on At the Margins, including commentary on the interplay with other payment policy programs and the implications for hospital and health system strategy.

    Stay tuned to At the Margins and the Daily Briefing for more analysis as the situation develops.

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