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August 18, 2017

How the industry is reacting to CMS' proposal to eliminate, scale back mandatory payment models

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The Trump administration's proposal to eliminate three planned Medicare mandatory bundled payment models and scale back a fourth drew mixed responses from the health care industry—with stakeholders including America's Essential Hospitals and the American Medical Association (AMA) praising the move but others, including the American Hospital Association (AHA), expressing disappointment.

Join us on Wednesday: Understand CMS's proposed changes to CJR and cancellation of EPMs

Background: CMS cancels, scales back bundled payment models

CMS on Tuesday proposed a rule that would eliminate three planned mandatory Episode Payment Models (EPMs) for heart attack treatment, bypass surgery, and hip and femur fracture treatment billed through Medicare.

The proposed rule also would eliminate the planned voluntary Cardiac Rehabilitation Incentive Payment Model, which would encourage providers in 90 U.S. regions to use cardiac rehabilitation, and cut in half the number of geographic areas that would mandatorily participate in the mandatory Comprehensive Care for Joint Replacement (CJR) Model.

CMS in the proposed rule said it considered adjusting the models to make them voluntary, but ultimately felt providers would not have enough time to prepare ahead of the Jan. 1, 2018 start date. CMS said it plans to work with providers to find new opportunities for voluntary payment initiatives. Specifically, CMS in the proposed rule said its Center for Medicare and Medicaid Innovation (CMMI) expects to develop new voluntary bundled payment models for calendar year 2018 that would qualify as Advanced Alternative Payment Models under MACRA.

The three mandatory EPMs, the voluntary Cardiac Rehabilitation Incentive Payment Model, and the expansion of the mandatory Comprehensive Care for Joint Replacement (CJR) Model currently are scheduled to take effect Jan. 1, 2018. CMS is accepting public comment on the proposal through Oct. 16.

Industry reaction mixed

According to CQ News, the proposed rule prompted both praise and criticism from the health care industry.  

Bruce Siegel, president and CEO of America's Essential Hospitals, said, "[W]e believe CMS made the right move to pull back the cardiac care episode payment models." Siegel said, "Providers selected for the Comprehensive Care for Joint Replacement (CJR) demonstration are only just now adapting to these new payment and delivery approaches and need more time before facing another demonstration and the potential for mandatory participation in two models simultaneously." Siegel continued, "This cancellation gives CMS an opportunity to evaluate current models and correct for unintended consequences before developing another voluntary or mandatory demonstration."

AMA, which had expressed concern with the way the bundled payment models were arranged, also praised the decision, saying, "Bundled payment models should ... be constructed to give physicians leadership roles in designing the care delivery process and ensuring that it achieves good patient outcomes without unnecessary costs." AMA said, "The cancelled and modified mandatory models designated the hospital as the accountable entity for all services that Medicare patients receive, including services delivered by physicians and post-acute care providers."

The American Academy of Orthopaedic Surgeons (AAOS) also applauded the proposed rule. AAOS President William Maloney in a press release said, "[I]mposing mandatory models on surgeons and facilities that lack the familiarity, experience, or infrastructure required has serious unintended consequences," adding, "Reducing the geographic area for CJR while still leaving a voluntary option significantly remedies this issue."

However, AHA expressed disappointment, saying that the sudden cancelation could result in additional costs for providers that have been preparing for the payment models. Ashley Thompson, AHA's senior vice president for public policy analysis and development, in a statement said the proposed rule "may be disruptive to providers who have expended valuable resources to put these programs in place."

Richard Chazal, the former president of the American College of Cardiology, called the payment models "far from perfect," but said that they included provisions that could potentially improve patient care at a lower cost. Chazal also expressed concern about the uncertainty the proposed rule would bring, asking, "Will [the models] be implemented a little bit later with more time to prepare or will something different be proposed?" (Firth, MedPage Today, 8/16; Clason, CQ News [subscription required], 8/16; Nather, "Vitals," Axios, 8/17).

Register for our webconference on the proposed rule

On August 15, 2017 CMS announced a proposal that would cancel three mandatory bundled payment programs for cardiac and orthopedic episodes and make significant changes to the Comprehensive Care for Joint Replacement (CJR) program.

Join our experts for a webconference on Wednesday, August 23 on CMS's proposed changes to CJR and cancellation of the EPM models.

Register Here

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