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May 19, 2017

CMS further delays start of several mandatory bundled payment models

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Read Advisory Board's take on this story.

CMS on Thursday finalized a rule that delays until Jan. 1 the implementation of several mandatory bundled payment models that had originally been set to take effect in July.

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

The final rule marks the second delay for the mandatory Episode Payment Models (EPMs), the voluntary Cardiac Rehabilitation Incentive Payment Model, and the expansion of the mandatory Comprehensive Care for Joint Replacement (CJR) Model. CMS in March in an interim rule delayed the effective date of those value-based payment models from July 1, 2017 to Oct. 1, 2017.

In that interim rule, CMS proposed further delaying the models until Jan. 1, 2018 to align the payment periods with the calendar year. The agency said it received 47 comments on those proposed changes during the 30-day comment period that ended April 19. According to HomeHealthcareNews, commenters had mixed reaction to the calendar year delay.

Further, some industry experts have said the delays raise questions about the future of mandatory payment models under the Trump administration.

CMS delays mandatory cardiovascular, cardiac rehab bundled payment models

Under the final rule, CMS will delay, from July 1 to Jan. 1, 2018, new EPM 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 would 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 final rule also will delay from July 1 to Jan. 1, 2018, the Cardiac Rehabilitation Incentive Payment Model, which would encourage providers in 90 U.S. regions to use cardiac rehabilitation..

CMS delays mandatory joint replacement bundled payment model expansion

In addition, the final rule will postpone, from July 1 to Jan. 1, 2018, the expansion of CMS' 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 (SHFFT) Model.

The final rule also delays certain provisions of the CJR model to Jan. 1, 2018 (Baxter, HomeHealthcareNews, 5/18; AHA News, 5/18).

Advisory Board's take

Rob Lazerow, Health Care Advisory Board

These new delays for the mandatory cardiac bundle, the cardiac rehab payment, and the expansion of CJR are not unexpected—CMS hinted they were considering further delays in March's previous rule.

The bigger question is whether CMS will propose to change the mandatory nature of the programs. We expect to see additional rules in coming months to clarify the future of the EPM and CJR programs. HHS Secretary Tom Price's prior outspoken opposition to mandatory bundled payment programs certainly suggests the possibility that CMS might ultimately shift the programs to be voluntary.

Finally, it's worth noting that Thursday's rule keeps in place the provisions that would allow clinicians participating in CJR this year to qualify for the Advanced APM track under MACRA's Quality Payment Program. Clinicians in this model should welcome the fact that CMS did not delay implementation of that policy.

We'll be discussing how hospitals and health systems should tailor their Medicare risk strategies amid uncertainty at our upcoming 2017 CEO Roundtable Meetings—one-day sessions with best practice research, tailored to executives. Register now to secure a spot at a session near you.

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