CMS proposed Monday a new mandatory bundled payment program for heart attacks and bypass surgeries that includes changes to the existing Comprehensive Care for Joint Replacement Model as part of its larger goal to shift Medicare from quantity to quality incentives.
Here are 10 things to know about the proposed rule.
1. The new bundled payment models apply to cardiac care and extend the existing CJR model to include hip and femur fractures. Medicare fee-for-service patients admitted for heart attacks and bypass surgeries are eligible for the new cardiac bundled payment program.
2. The bundle makes hospitals accountable for the cost and quality of care provided during the inpatient stay and for 90 days after discharge. Hospitals will be paid a fixed target price for each episode of care, and those that hit higher quality targets will qualify for a higher target price. At the end of each performance year, hospitals have an additional opportunity to earn shared savings based on how they performed in terms of their target price.
3. Hospitals will be chosen from 98 randomly-selected metropolitan statistical areas for the cardiac bundling program. Hospitals outside of these selected areas will not participate in the cardiac bundles. The hip/femur fracture bundles, which build on the existing CJR program, will be tested in the 67 MSAs already selected for the CJR model. Rural counties will be excluded, and financial risk will be limited for rural hospitals that fall into MSAs selected.
4. Under the proposed rule, the bundles are set to begin on July 1, 2017. CMS proposed implementing the program in phases to allow hospitals to adapt to the new model and establish processes to support it. Downside risk is not added in until the second quarter of the second performance year. Beginning April 2018, downside risk is capped at 5 percent. This cap increases to 10 percent in the third performance year, and then will phase up to a maximum of 20 percent in the fourth and fifth performance years. Potential gains are also phased in. In the first two performance years, hospitals are able to earn a maximum bonus of 5 percent. These potential gains then grow in step with downside risk, up to 20 percent in performance years 4 and 5.
5. Hospitals would receive quality-adjusted target payments for each episode of care. These target payments will be based on a blend of historical hospital specific and regional data, and adjusted based on case complexity. Hospital targets would also be adjusted for quality, so that hospitals delivering the best care have the opportunity to share in more savings. If hospitals do not meet the baseline standards for quality, they cannot share in savings.
6. At the end of each performance year, hospitals that meet quality standards can earn additional payments based on cost. This means CMS compares the actual spending for each episode to the target prices paid to the hospital. Those that are able to deliver care for less than the target price are paid the achieved savings. Hospitals that exceed the target are required to repay Medicare.
7. The proposed rule also includes a model to test cardiac rehabilitation services. The model aims to test if payments incentivize use of cardiac rehabilitation during the 90-day period following hospital discharge. Payments of $25 per rehab service will be paid for the first 11 services given during the episode of care. The subsequent services are reimbursed at a rate of $175 per service. Sessions are limited to a maximum of 36 sessions over 36 weeks, with the option to extend. Hospitals participating in the cardiac bundles, as well as those in an additional 45 geographic areas, will be eligible to participate.
8. CMS said the cardiac bundle, as well as the CJR bundle, could qualify as Advanced Alternative Payment Models in 2018 under the Medicare Access and CHIP Reauthorization Act. The proposed rule for the cardiac bundle established pathways for physicians to potentially qualify under the Quality Payment Program for Advanced APMs. This is the more lucrative track under MACRA, which determines physicians' Medicare payment adjustments in place of the sustainable growth rate formula. The bundles would meet the requirements under the proposed rule for MACRA, meaning physicians could earn an additional lump-sum bonus.
9. Additionally, the proposed rule indicates that CMS plans to build on its Bundled Payments for Care Improvement Initiative. This includes a new voluntary bundled payment program that would begin in 2018, and could also potentially qualify as an Advanced APM under MACRA.
10. CMS is taking feedback on the proposals for 60 days, until September 24. The full text of the proposed rule is available here.
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