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On May 3, 2021, the Centers for Medicare & Medicaid Services (CMS) published an 81-page final rule to both extend and change the Comprehensive Care for Joint Replacement (CJR) model. We previously reported on the proposed rule here. The CJR model was initially implemented by way of notice-and-comment rulemaking in April 2016; the recent…

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 Trump Administration has announced a number of policy goals and innovation models that seek to “improve the lives of Americans suffering from kidney disease, expand options for American patients, and reduce healthcare costs,” according to the Department of Health and Human Services (HHS).  The broad policy framework was outlined in an executive order on…

The Centers for Medicare & Medicaid Services (CMS) has proposed a new Radiation Oncology (RO) innovation model (RO Model) to test whether prospective site neutral, episode-based payments for radiotherapy (RT) episodes of care would reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.  Importantly, the RO Model would be mandatory for providers and suppliers that furnish RT services within randomly selected Core Based Statistical Areas (CBSAs), with very limited exceptions.  CMS estimates that the RO Model would cover about 40% of Medicare RO episodes and reduce Medicare spending by $250 million – $260 million during the five-year program.

Key features of the proposed RO Model are summarized below.  CMS will accept comments on the model until September 16, 2019.

RO Provider/Supplier Participation

Medicare-participating physician group practices (PGPs), hospital outpatient departments (HOPD), and freestanding radiation therapy centers that furnish RT services in designated CBSAs generally would be required to participate in the RO Model.  CMS proposes exempting a provider or supplier that:

(1)    furnishes RT services only in Maryland, Vermont, or the U.S. territories;

(2)    is classified as an ambulatory surgery center (ASC), critical access hospital (CAH), or prospective payment system-exempt cancer hospital; or

(3)    is eligible to participate the Pennsylvania Rural Health Model.

In a proposed rule to be published on July 18, 2019; CMS expresses its view that mandatory participation “is necessary to obtain a diverse, representative sample of RT providers and RT suppliers and to help support a statistically robust test of the prospective episode payments made under the RO Model.”  CMS notes that because hospital outpatient prospective payment system (OPPS) rates are projected to increase substantially more than physician fee schedule (PFS) rates during the period of 2019 through 2023, it “would result in few to no HOPDs electing to voluntarily participate in the Model.”  CMS also expects that a voluntary program would attract only those freestanding radiation therapy centers with historically lower RT costs compared to the national average.

Providers and suppliers would participate in the RO Model as either a Professional participant, Technical participant, or Dual participant.
Continue Reading CMS Proposes New Mandatory Medicare Radiation Oncology Payment Innovation Model

The Centers for Medicare & Medicaid Services (CMS) plans to test a new voluntary emergency ambulance service innovation model that seeks promote “the most appropriate level of care at the right time and place.”  In announcing the model, CMS noted that because Medicare regulations now only allow payment for emergency ground ambulance services for transportation…

The Centers for Medicare & Medicaid Services (CMS) has announced a new Medicare Part D Payment Modernization Model (Part D Model), which will be tested by the CMS Center for Medicare and Medicaid Innovation.  CMS unveiled the Part D Model on January 18, 2019, at the same time the agency released details on extensive revisions to its current Medicare Advantage Value-Based Insurance Design (VBID) model. On January 31, 2019, CMS provided additional detail on the new Part D Model during a webinar (the webinar will be repeated on February 6, 2019).

The Part D Model is a voluntary, five-year (CY 2020-2024) model open to standalone prescription drug plans (PDPs) and Medicare Advantage Prescription Drug Plans (MA-PDs), on a nationwide basis.  As discussed below, the model is intended to decrease Part D program spending by:  (i) introducing two-sided risk to participating plans for spending in the catastrophic portion of the Part D benefit, and (2) enhancing plan flexibilities to propose clinically-based drug utilization management techniques, including through rewards and incentives programs for plan beneficiaries.

Two-sided risk for the catastrophic portion of the Part D benefit. 

For plans accepted into the program, CMS will retrospectively (after the plan year has been completed) establish a target benchmark representing the federal catastrophic reinsurance subsidy amount (80% of Part D catastrophic phase costs after manufacturer rebates and other Direct and Indirect Remuneration) that would have been paid to participating organizations if they were not participating in the model.  The benchmark will be calculated after adjustment for certain factors, such as enrollee health and low-income subsidy status, and separate benchmarks will be calculated for participating PDPs and MA-PDs.  If the reinsurance subsidy amount (after adjustment) for the organization’s participating PDPs or MA-PDs (as applicable), calculated at the parent organization level, is lower than the applicable target benchmark, the organization will receive a portion of the difference (referred to by CMS as “savings”), and if it is higher than the benchmark, the organization must pay to CMS a portion of the difference (referred to by CMS as “losses”).  Specifically:
Continue Reading CMS Launches New Medicare Part D Payment Modernization Model

The Centers for Medicare & Medicaid Services (CMS) is making extensive revisions to its Medicare Advantage (MA) Value-Based Insurance Design model in order “to contribute to the modernization of Medicare Advantage through increasing choice, lowering cost, and improving the quality of care for Medicare beneficiaries.”

By way of background, the VBID innovation model was launched…

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…

CMS is planning a new “Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration” that would allow clinicians who participate in certain Medicare Advantage (MA) plans that involve taking on risk to be treated as Advanced Alternative Payment Model (Advanced APM) participants under the Medicare physician fee schedule. By way of background, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established two tracks for Medicare physician fee schedule/Quality Payment Program updates:

  1. The Merit-based Incentive Payment System (MIPS), which adjusts Medicare payments based on performance on quality, cost, improvement activities, and advancing care information measures, or
  2. Advanced APMs, under which eligible clinicians may earn incentive payments for sufficient participation in certain payment arrangements that coordinate care, improve quality, and reduce costs.

Continue Reading CMS Considering New Medicare Advantage Payment Arrangement Incentive (MAQI) Demonstration

The Department of Health and Human Services (HHS) is considering forming a workgroup aimed at facilitating “constructive, high-level dialogue between HHS leadership and those focused on innovating and investing in the healthcare industry.”  The goal of the initiative is to “spur investment, increase competition, accelerate innovation, and allow capital investment in the healthcare sector to …

Last fall, CMS requested public comments on the CMS Innovation Center’s “New Direction,” under which CMS will seek to “promote patient-centered care and test market-driven reforms.” In the interest of transparency and to facilitate discussion, CMS has posted a summary of the more than 1,000 comments it received from medical societies, providers, manufacturers,…

CMS will not proceed with its planned Direct Decision Support (DDS) innovation model “due to operational and technical issues with the proposed Model design.” When this model was announced in December 2016, it was expected to test a shared decision-making approach outside of the clinical delivery system. On February 2, 2018, CMS announced that it…

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

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 CMS Center for Medicare and Medicaid Innovation is holding a public summit on September 8, 2017 to explore creating a behavioral health innovative payment model intended to improve health care quality and access, while lowering the cost of care for Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) beneficiaries with behavioral health conditions. The…

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…

CMS is soliciting applications for 2018 Next Generation ACOs, an Innovation Center initiative intended to promote Medicare quality improvement and care coordination. Letters of intent are due May 4, 2017. CMS is holding a series of calls to discuss the model and the application process, including the following:

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