Readers of this page know that we have repeatedly noted the quick pace at which CMS has proposed changes to the Medicare payments system; how those changes are meant to encourage spill-over into the commercial payers; and how the next likely targets of their innovations would be cardiac procedures. On that last point, our prognostications were realized today when CMS released Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR). What we did not imagine is the speed at which CMS would move. It has been just three months since the first mandatory bundled payment model - the Comprehensive Care for Joint Replacement (CCJR) - was implemented. We expected CMS to watch a little data come in on that program before moving on to the next proposal. So, we have to hand it to the Obama Administration. They are using every minute they have to put in place major reforms before they clock out in January.
The major outlines of the program follow. Deep dive will come as soon as we get through 906 pages and crunch some utilization numbers.
- CMS will test three Episode Payment Models which would include models for episodes of care surrounding an acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment excluding lower extremity joint replacement (SHFFT).
- The EPMs would be tested for five years beginning July 1, 2017 and ending December 31, 2021.
- Inpatient acute care hospitals will be the episode of care initiators (as is the case with the CCJR).
- The Medicare payment will have a risk sharing components (as is the case with the CCJR)
- The following MS-DRGs would be subject to the mandatory bundles payment:
- MS-DRG 280-282 (AMI)
- MS-DRG 246-251 (Percutaneous Coronary Intervention in an AMI event)
- MS-DRG 231-236 (CABG)
- MS-DRG 480-482 (SHFFT)
- Episodes of Care would commence upon admission to the acute care hospital and end 90 days after discharge
- The payment bundle would include all inpatient care, post-acute treatment and physicians services provided under Medicare Parts A and B.
- CMS is also proposing a Cardiac Rehabiliation model that provides an incentive payment for hospitals paid under the bundled payment model for AMI and CABG and another incentive payment for hospitals that treat AMI and CABG but are not included in the mandatory bundle.
- The bundle would be paid retrospectively with the actual payments reconciled against a target price.
- For the CR incentive model, providers would be paid a $25 incentive fee for each of the first 11 CR services (as defined under the HCPCS codes). this amount would increase to $175 after the 11 services were billed.
- The model will be implemented in 98 MSAs.
- CMS estimates that the proposal will save $170 million over the life of the model.
- It isn't over - CMS includes in the proposed rule a request for comment on new bundled payments to be considered in the future.
We continue to believe that bundled payments will pressure hospital internal costs (for such things as devices) and high cost post-acute providers. Nothing we see in a first skim of the proposed rule changes that view... but more to come.
As always, feel free to call to discuss.