Episode Payment Model

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The Centers for Medicare & Medicaid Services (CMS) has announced that 1,299 entities have signed agreements to participate in the Administration’s new Bundled Payments for Care Improvement (BPCI) Advanced episode payment model, which runs from October 1, 2018 through December 31, 2023.  According to CMS, BPCI Advanced participants include 1,547 Medicare providers and suppliers (832…

The Centers for Medicare & Medicaid Services (CMS) has officially cancelled a planned program to require certain hospitals to participate in Medicare episode payment models (EPMs) for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment procedures furnished in designated areas of the country, along with a Cardiac Rehabilitation (CR) Incentive Payment Model. These programs, which were slated to launch on January 1, 2018, were summarized in previous posts. In a press release, CMS states that not pursuing these models gives it “greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute care spectrum.”

In the same rulemaking, CMS also dramatically scaled back the ongoing Comprehensive Care for Joint Replacement (CJR) model. By way of background, this program provides 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).  The bundled payment is paid retrospectively through a reconciliation process; providers receive regular fee-for-service payments in the interim. The CJR model began April 1, 2016 and runs through 2020.

Most notably, the new rule gives certain hospitals participating in the CJR model a one-time option to choose whether to continue their participation in the model, effective February 1, 2018. This voluntary election option applies to hospitals in 33 of the 67 Metropolitan Statistical Areas (MSAs) selected in the original CJR final rule, along with low volume hospitals and rural hospitals in the remaining 34 mandatory participation MSAs.  CMS is designating a one-time participation opt-in period from January 1 – 31, 2018 during which eligible hospitals may opt to continue to participate in CJR.  Note, however, that CMS will automatically terminate CJR participation for hospitals in the designated 33 MSAs, along with low volume and rural hospitals, as of February 1, 2018, unless the hospital elects to continue participation in the CJR model.  CMS expects the number of hospitals required to participate in CJR to fall from approximately 700 to about 370, and an additional 60 to 80 hospitals to make a voluntary election to continue participation.  A list of all current CJR participant hospitals and their status (mandatory or voluntary) is available on the CJR webpage, as is the Voluntary Participation Election Letter Template.

CMS also adopted a number of refinements to CJR model policies, including the following:
Continue Reading CMS Scraps Cardiac/Hip Fracture Episode Payment Model, Downsizes CJR Program

The Centers for Medicare & Medicaid Services (CMS) has announced a “new direction” for the CMS Innovation Center that is intended to “promote patient-centered care and test market-driven reforms.” The goal of these reforms – which may be tested on a smaller scale than current innovation models – is to “empower beneficiaries as consumers, provide…

Signals Trump Administration’s About-Face on Obama-Era Mandatory Innovation Models

The Centers for Medicare & Medicaid Services (CMS) has just released a proposed rule to cancel a significant — but still-pending — Obama Administration program that would require certain hospitals to participate in Medicare episode payment models (EPMs) for acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) procedures furnished in designated areas of the country. Perhaps more surprisingly, CMS also would dramatically scale back mandatory participation in the ongoing Comprehensive Care for Joint Replacement (CJR) program, with an option for participating hospitals in about half of the current CJR locations to shift to voluntary participation.

As previously reported, the EPM and CJR programs were part of the Obama Administration’s high-profile efforts to move the Medicare system away from fee-for-service (FFS) payments and towards alternative payment models (APMs) that reward quality of care rather than volume of services. Although early APMs (e.g., the Bundled Payment for Care Initiative) were voluntary, CMS eventually shifted attention to mandatory models in order to broaden participation. President Trump’s Secretary of Health and Human Services, Tom Price, M.D., has long been critical of mandatory Medicare payment innovation models and has been contemplating changes to these programs.  It is now clear that the Trump Administration is reversing course and pulling back from mandatory models.  In fact, CMS stated in an announcement that it “expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts” in the future.

EPM/CR Models Slated for Cancellation

CMS published a final rule in early 2017 to establish a mandatory EPM program for AMI and CABG cases in 98 metropolitan statistical areas (MSA), along with a mandatory EPM program for SHFFT procedures in 67 MSAs covered by the CJR program. In short, CMS planned to provide a bundled payment to hospitals in selected geographic areas for individual episodes, covering all services provided during the inpatient admission through 90 days post-discharge.  In such cases, the hospital would be held accountable for spending during the episode of care.  The bundled payment to the hospital would be paid retrospectively through a reconciliation process (hospitals and other providers and suppliers would continue to submit claims and receive payment via the usual Medicare FFS payment systems).  A participant hospital would receive a “reconciliation payment” if its actual episode payments (combined Medicare Part A and B claims payments for services furnished to the beneficiary during the episode) were below the target price for the episode, and certain quality thresholds were met.  Beginning with the second performance year, affected hospitals would be required to repay Medicare for a portion of spending that exceeded the target price (with limits on upward and downward adjustment). The rule also included provisions intended to promote the use of cardiac rehabilitation services through a Cardiac Rehabilitation (CR) Incentive Payment Model.
Continue Reading CMS Proposes Cancellation of Medicare Cardiac/Hip Fracture Episode Payment Models, Scale-Back of Mandatory CJR Participation

The Centers for Medicare & Medicaid Services (CMS) is delaying until January 1, 2018 implementation of mandatory Medicare episode payment models (EPMs) for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment procedures furnished in designated geographic areas.  Conforming changes to the Comprehensive Care for Joint Replacement (CJR) program also are being…

HHS Secretary Thomas Price and CMS Administrator Seema Verma have signaled that the Trump Administration is eyeing changes to one of the last major Medicare policies issued by the Obama Administration.  Specifically, CMS is delaying a January 3, 2017 final rule that established mandatory Medicare episode payment models (EPM) for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment procedures furnished in designated geographic areas. The rule also made conforming changes to the Comprehensive Care for Joint Replacement (CJR) program.  The rule was originally scheduled to go into effect February 18, 2017, but major provisions (including the EPM start date and CJR changes) were not scheduled to be implemented until July 1, 2017.  Last month, the Trump Administration published a notice pushing the effective date to March 21, but it did not impact the July 1, 2017 implementation date.

In an interim final rule with comment period published today, CMS is making the following changes to the EPM/CJR timeline:
Continue Reading Price, Verma Taking a Fresh Look at Obama Administration’s EPM/CJR Final Rule; Changes Pushed Back to at Least October 1, 2017

As mandated by the Trump Administration’s regulatory review policy, CMS is delaying the effective date of its January 3, 2017 final rule establishing mandatory Medicare episode payment models (EPM) for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment procedures furnished in designated geographic areas.  Specifically, CMS is extending the effective …

As has been the tradition for incoming administrations, the Trump Administration has ordered a regulatory freeze and review of final rules published by the Obama Administration that had not yet gone into effect.  In a January 20, 2017 memo to the heads of executive departments and agencies, Assistant to the President and Chief of Staff…

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