To the surprise of no one, CMS today proposed rescinding the regulations that would implement the Medicare cardiac mandatory bundled payment model and the rehabailitation incentive payments that were expected to go into effect in January 2018. CMS has also elected to make changes to the CJR bundle currently in effect in 67 MSAs.
The significant provisions of the proposed rule are:
- Cancellation of the Episode Payment Model for Acute Myocardial Infarction, Coronary Artery Bypass Graft and Surgical Hip/Femur Fracture (SHFFT) episodes
- Cancellation of the Cardiac Rehabilitation Incentive Model
- Participation by hospitals in 33 of the 67 MSAs covered by the CJR would be voluntary
- Participation by hospitals in the remaining 34 MSAs, excluding rural and low volume hospitals, would remain mandatory
- Rural and low-volume hospitals would be excluded from CJR altogether
- The MSAs in which the model would be mandatory are largely geographies where episode costs are higher
- CMS anticipates 450 to 470 hospitals will continue to participate in the CJR on a voluntary or mandatory method
The MSAs in which hospitals must continue to participate are:
Source: CMS
In the rule, CMS notes that in the future they would not propose any new payment models via rulemaking which is to say they will not be proposing any new mandatory demonstrations like CJR. Instead they would accept applications for new models and encourage voluntary participation via the CMS Innovation Center. As we noted on Saturday, CMS will be relying on the Physician-focused Payment Model Technical Advisory Panel to crowd source new approaches to pay for care.
We suspect that implementation of the CJR is far enough along that not too much will change in those cities where participation becomes voluntary. Pressure on device makers and high cost post-acute providers will probably continue. One big unanswered question remains how CJR will intersect with TKA's removal from the Inpatient Only list.
For those that will look to this move as a sign that the Trump administration plans to keep hope alive for the Medicare Fee-for-Service system, don't get too comfortable. Bundled or episode payments have gotten a lot of traction among commercial payers. Tennessee and a few other states have implemented episode payments in their Medicaid program. The Trump administration is entertaining new flexibilities for Medicare Advantage benefit design that could mean bundled payments and other changes in 2019 and beyond.
As a former Bush 43 administration official recently reminded me, bundled payments is a bipartisan goal and has been for many years. There are, however, 100 ways to skin this cat and the Trump administration has decided edicts from CMS to hospital systems was not the way they wanted to go.
Call with questions. We are open 24/7/365. Even in August.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
