CMS Provides More Details on Proposal to Eliminate Mandatory Bundled Payment Programs

Aug. 17, 2017
The Centers for Medicare and Medicaid (CMS) posted a press release Tuesday that provides more details regarding its proposal to change the Comprehensive Care for Joint Replacement Model and cancel the mandatory Episode Payment Models and Cardiac Rehabilitation Incentive payment model.

The Centers for Medicare and Medicaid (CMS) posted a press release Tuesday that provides more details regarding its proposal to change the Comprehensive Care for Joint Replacement Model and cancel the mandatory Episode Payment Models and Cardiac Rehabilitation Incentive payment model.

CMS officials said the proposed rule aims to provide “greater flexibility and choice for hospitals in orthopedic care for Medicare beneficiaries.”

The Department of Health and Human Services (HHS) posted a rule, which was sent to the Office of Management and Budget last week, that would cancel the mandatory bundled payment programs for heart attacks and bypass surgeries as well as expansion of the existing Comprehensive Care for Joint Replacement model (CJR) to include surgical treatments for hip and femur fractures. Those bundled payment initiatives have already been delayed twice, once in March and again in May.

Specifically, CMS is proposing to reduce the number of mandatory geographic areas participating in the Center for Medicare and Medicaid Innovation’s (Innovation Center) CJR model from 67 to 34. In addition, CMS proposes to allow CJR participants in the 33 remaining areas to participate on a voluntary basis. In this rule, CMS also proposes to make participation in the CJR model voluntary for all low volume and rural hospitals in all of the CJR geographic areas.

CMS also is proposing through this rule to cancel the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model, which were scheduled to begin on January 1, 2018. “Eliminating these models would give CMS greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute-care spectrum,” CMS said in a press release.

“Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals,” CMS Administrator Seema Verma said in a prepared statement. “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.”

Moving forward, CMS says it expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts. “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 said.

The EPMs and the CR incentive models were designed as mandatory payment models and implemented via notice and comment rulemaking to test the effects of bundling cardiac and orthopedic care beginning in 2018. They were established by the Innovation Center under the authority of section 1115A of the Social Security Act (the Act).

HHS Secretary Tom Price, M.D., has voiced skepticism about mandatory bundled payment programs. As previously reported by Healthcare Informatics, last fall, when Price still served as a Congressman from Georgia, he was one of 200 federal lawmakers who sent a letter to Andy Slavitt, acting administrator for the Centers for Medicare & Medicaid Services (CMS), calling out the Center for Medicare and Medicaid Innovation (CMMI) for overstepping its authority by proposing mandatory healthcare payment and service delivery models.

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