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The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would extend and modify the Comprehensive Care for Joint Replacement (CJR) Model, under which CMS makes a “bundled” payment to participant hospitals for an “episode of care” for lower extremity joint replacement (LEJR) surgery, covering all services provided during the inpatient admission through 90 days post-discharge (with certain exceptions).  Notably, CMS has proposed incorporating outpatient hip and knee replacements into the episode of care definition, now that these procedures are no longer on the CMS “inpatient only” list.  CMS also requests comments on a potential future bundled payment model focusing on LEJR procedures performed in ambulatory surgical centers (ASCs).  CMS will accept comments on until April 24, 2020.

Highlights of the proposed rule include the following:

  • Extension of CJR Model. The CJR Model began April 1, 2016 and currently is scheduled to run through December 31, 2020.  CMS has proposed extending the model for an additional three years, through December 31, 2023 for participant hospitals physically located in the 34 mandatory metropolitan statistical areas (MSAs), excluding rural or low-volume hospitals in those MSAs.  CMS anticipates that approximately 350 participants would participate in the CJR model during the proposed three-year extension, compared with about 470 providers as of October 2019.
  • Outpatient Joint Replacements. The proposed rule would expand the definition of a CJR “episode” to include outpatient total knee arthroplasty (TKA) and total hip arthroplasty (THA), in light of previously-adopted CMS policies that allow total knee and total hip replacements to be treated in the outpatient setting.  This change would apply to episodes initiated by an “anchor procedure” furnished on or after October 4, 2020 (because the 90-day episode would end on or after January 1, 2021, the first day of proposed new plan year 6).  CMS proposes to group all outpatient TKA procedures into MS-DRG 470 (LEJR without complications and/or comorbidities) without hip fracture historical episodes for purposes of calculating a single, site-neutral target price.  Outpatient THA cases would be grouped into either MS-DRG 470 with hip fracture or MS-DRG 470 without hip fracture depending on hip fracture status.
  • Target Price Calculation. CMS has proposed changing the basis for the target price from three years of claims data to the most recent one year of claims data.  The proposed rule also would discontinue the use of the regional and hospital anchor weighting steps in the target price calculation methodology, and it would end the annual updates to the target prices.  Furthermore, CMS proposes to incorporate additional risk adjustment to the target pricing and modify the high episode spending cap calculation methodology.

The proposed rule also would, among other things:
Continue Reading CMS Plans to Add Outpatient Hip/Knee Replacements to CJR Model, Seeks Comments on ASC Joint Procedure Bundled Payment Model

The Centers for Medicare & Medicaid Services (CMS) has published its proposed Medicare physician fee schedule (PFS) rule for calendar year (CY) 2020.  In addition to updating rates for physician services, CMS proposes changes to numerous other Medicare Part B policies.  Highlights of the proposed rule include the following:

  • The proposed 2020 conversion factor (CF)

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The Trump Administration has rolled out its first CMS Innovation Center Medicare bundled payment initiative, the Bundled Payments for Care Improvement Advanced (BPCI Advanced). Under the new voluntary model, CMS will test whether bundled payments for 29 inpatient and 3 outpatient clinical episodes will lead to reduced Medicare expenditures while improving quality of care for Medicare beneficiaries. CMS anticipates that the performance period of the BPCI Advanced model will begin on October 1, 2018 and run through December 31, 2023.

BPCI Advanced builds on the ongoing Bundled Payments for Care Improvement (BPCI) initiative, which was launched in 2013 and runs through September 30, 2018. As in the BPCI model, BPCI Advanced seeks to incentivize providers to coordinate care to furnish services more efficiently while maintaining quality. Specifically, participants may either realize a gain or loss depending both on (1) how successfully they manage total Medicare fee-for-service costs of care (with limited exceptions) throughout each 90-day episode of care and (2) performance on specified quality measures.

There are key differences between the original BPCI and BPCI Advanced models, including the following (among others):
Continue Reading Trump Administration Unveils Its First Bundled Payment Initiative — BPCI Advanced

In the waning days of the Obama Administration, the Centers for Medicare & Medicaid Services (CMS) has unveiled a lengthy and complex final rule to establish mandatory Medicare bundled payment programs for acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) procedures furnished in designated geographic areas.  The rule also includes provisions to promote the use of cardiac rehabilitation services, refine current Comprehensive Care for Joint Replacement Model (CJR) rules, and integrate bundled payment programs into the new physician Quality Payment Program. The 1,606-page advance version of the rule was released on December 20, 2016; the official version is scheduled to be published January 3, 2017.

Note that President-elect Donald Trump’s designee for Secretary of Health and Human Services, Rep. Tom Price, M.D., has been highly critical of the proposed version of the rule published in August 2016, and has called on the CMS Center for Medicare and Medicaid Innovation (CMMI) to “stop experimenting with Americans’ health, and cease all current and future planned mandatory initiatives within the CMMI.” It is therefore uncertain whether all provisions of the final rule will actually be implemented as CMS currently envisions.  Nevertheless, impacted providers need to be prepared for potentially significant changes.

Mandatory Episode Payment Models for Cardiac Care, Hip/Femur Fractures

The final rule establishes new “episode payment models” (EPMs) that seek to “advance CMS’ goal of improving the efficiency and quality of care for Medicare beneficiaries and encourage hospitals, physicians, and post-acute care providers to work together to improve the coordination of care from the initial hospitalization through recovery.” CMS estimates that the EPMs will save $159 million during the duration of the program (July 1, 2017 through December 31, 2021).

CMS will “test” the EPMs beginning July 1, 2017 and ending December 31, 2021. CMS has selected 98 metropolitan statistical areas (MSAs) for the CABG and AMI EPMs, and will implement the SHFFT model in the same 67 MSAs where the CJR program is already underway. Acute care hospitals in these areas will participate in the models if they are paid under the Inpatient Prospective Payment System (IPPS) and are not concurrently participating in Models 2, 3, or 4 of the Innovation Center’s Bundled Payment for Care Improvement (BPCI) initiative for AMI, CABG, or SHFFT episodes. CMS estimates that approximately 1,120 hospitals will participate in the AMI and CABG models, and 860 hospitals will participate in the SHFFT model.

Under the final rule, an AMI, CABG, or SHFFT model episode will begin with an inpatient admission to an “anchor hospital” for the following specified Medicare Severity-Diagnosis Related Groups (MS-DRG):
Continue Reading CMS Issues Final Mandatory Episode Payment Models for Cardiac and Orthopedic Cases, Plus New Cardiac Rehabilitation Incentive Payment Model and CJR Program Refinements

The Centers for Medicare & Medicaid Services (CMS) has announced proposals for three new “episode payment models” that, like the Comprehensive Care for Joint Replacement (CJR) model, would mandate provider participation in selected geographic areas. The episodes included in these payment models would address care for heart attacks, coronary artery bypass graft, and surgical hip/femur fracture treatment (excluding lower-extremity joint replacement). The performance period for these proposed episode payment models would begin July 1, 2017, giving hospitals and other providers a very short amount of time to prepare for these new payment methods. Comments are due October 3, 2016. Reed Smith is available to assist clients with preparation of comments or questions related to the proposed rule.
Continue Reading CMS Proposes Three New “Episode Payment Models” for Cardiac Care, Hip/Femur Fracture Cases, Plus Changes to CJR Model

On July 25, 2016, CMS announced ambitious, multi-pronged plans to expand mandatory Medicare coordinated care/bundled payment programs, promote the use of cardiac rehabilitation services, refine current Comprehensive Care for Joint Replacement Model (CJR) rules, and integrate bundled payment programs into the upcoming Medicare physician quality/payment framework. The proposed “Advancing Care Coordination through Episode Payment Model” rule is part of the Administration’s efforts to move the Medicare system away from fee-for-service (FFS) payments and towards alternative payment models that reward quality of care rather than volume of services.
Continue Reading CMS Unveils New Mandatory Medicare Bundled Payment Models for Cardiac & Hip Fracture Cases, Plus Proposed Refinements to CJR Program

As previously reported, CMS has published its final rule to establish a Medicare Comprehensive Care for Joint Replacement (CJR) model that establishes a bundled payment framework for acute care hospitals for lower extremity joint replacement surgery (LEJR) episodes of care in selected geographic areas. The CJR initiative is particularly significant given that it is…

On November 16, 2015, CMS released its final rule to establish a Medicare Comprehensive Care for Joint Replacement (CJR) model that will test whether bundled payments to acute care hospitals for lower extremity joint replacement surgery (LEJR) episodes of care will reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries. CMS estimates that this initiative – which will be mandatory for most hospitals operating in selected geographical areas –will include about 23% of all LEJR episodes nationally and will result in approximately $343 million in net Medicare savings over five years. The advance version of the final rule is lengthy (more than 1000 pages) and complex. The basic framework of the program aligns with the program specifications set forth in CMS’s July 14, 2015 proposed rule. CMS did, however, push back the start date for the initiative; the regulations, while effective on January 15, 2016, are applicable when the first model performance period begins on April 1, 2016. Our preliminary observations regarding key features of the final rule and notable changes from the proposed rule include the following:
Continue Reading CMS Finalizes “Comprehensive Care for Joint Replacement” Model

As promised in our July 21st post, our team has compiled a comprehensive analysis of the Centers for Medicare and Medicaid Services’ (CMS) proposed rule to establish a Medicare Comprehensive Care for Joint Replacement (CCJR) model, under which CMS would provide a bundled payment to hospitals for an episode of lower extremity joint…

On July 14, 2015, CMS published a proposed rule to establish a Medicare Comprehensive Care for Joint Replacement (CCJR) model.  Under the proposed rule, CMS would provide a bundled payment to hospitals in selected geographic areas for an episode of care for lower extremity joint replacement (LEJR) surgery, covering all services provided during the inpatient admission through 90 days post-discharge.
Continue Reading CMS Proposes “Comprehensive Care for Joint Replacement” Model

On April 2-3, 2015, the Medicare Payment Advisory Commission (MedPAC) is meeting to discuss various Medicare policy issues, including: hospital short stay policy; polypharmacy/multiple drug use (focusing on Part D opioid use); Medicare Part D risk sharing; measuring low-value care; using episode bundles to improve care efficiency (including potential refinements to the Medicare spending per…

As previously reported, CMS has established a public-private partnership, the Health Care Payment Learning and Action Network, to support HHS’s goal of moving Medicare and the broader health industry from a FFS model towards alternative payment models that emphasize value. CMS is now inviting payers, providers, employers, purchasers, state partners, consumer groups, individual…

Today HHS Secretary Sylvia M. Burwell announced ambitious plans to move from “volume to value in Medicare payments” by accelerating the share of Medicare fee-for-service (FFS) payments that are tied to quality and value and reimbursed through alternative payment models. The first goal in the initiative is for 30% of Medicare provider payments to be…

The House Energy and Commerce Committee has scheduled a May 21 hearing entitled “Keeping the Promise: Site of Service Medicare Payment Reforms,” which will focus on two bills that seek to equalize payments between different providers:

  • The Medicare Patient Access to Cancer Treatment Act of 2014, which would establish payment parity under the Medicare program

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CMS has made changes to its Comprehensive ESRD Care (CEC) Initiative to encourage greater participation by both large dialysis organizations (LDOs) and non-LDOs. The goal of the CEC initiative is to improve outcomes for Medicare beneficiaries with ESRD while reducing expenditures by creating financial incentives for dialysis facilities, nephrologists, and other Medicare providers to effectively…

In early April, Reed Smith hosted an enlightening conference entitled “Reed Smith 2014 Washington Health Care Conference: Focus on Post-Acute Care” in Washington, D.C. The conference brought together a panel of experts to discuss episodic care, bundling models, and alternative payment and delivery systems, as well as other speakers to present from the perspective of investors and Capitol Hill. The conference was capped with a stimulating keynote address from American Enterprise Institute resident scholar Dr. Norman Ornstein on the current polarized nature of American politics, particularly in regards to national health policy.
Continue Reading Highlights from Reed Smith’s Post-Acute Care Conference

On February 14, 2014, CMS published a notice announcing an open period for additional organizations to be considered for participation in Models 2, 3, and 4 of the Bundled Payments for Care Improvement initiative. The three models are described as follows:

  • Model 2–Retrospective bundled payment models for hospitals, physicians, and post-acute providers for an episode

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CMS is requesting public comments on ways to structure new models for delivering and paying for Medicare outpatient specialty practitioner services. The first broad model CMS is considering is a procedural episode-based payment model, where the episode of care would be defined around an outpatient surgical or interventional procedure such as colonoscopy or cardiac…

The House Ways and Means Committee is inviting comments on draft legislation to reform Medicare post-acute care (PAC) policy, based on reforms included in President Obama’s fiscal year 2014 budget. The legislation would: 1. Reduce market basket updates for home health agencies, skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs) and long-term care hospitals; 2.…