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Washington Debrief: CMS Encourages Participation in Bundled Payments Model

May 21, 2013
by Jeff Smith, Director of Public Policy at CHIME
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Jeff Smith, Director of Public Policy at CHIME

Senate Confirms Tavenner, Holds Hearing on Future Medicare Payment; House Repeals ACA for 27th Time

Amid the turmoil of Associated Press wiretaps, Benghazi talking points and Internal Revenue Service malfeasance and the 27th House attempt to repeal the Affordable Care Act, there was some substantive activity in Washington last week. Most notably, the Senate confirmed Centers for Medicare & Medicaid Services’ (CMS) Acting Administrator Marilyn Tavenner as the agency’s first official chief in more than six years. Tavenner’s confirmation had been telegraphed for some time, as the Acting Administrator had received praise from both sides of the isle in Washington.  However, some last-minute politicking by Senate Health, Education, Labor & Pensions Chairman Tom Harkin and the threat of new accusations of wrong-doing against HHS Secretary Sebelius threatened final confirmation.

Also happening on the Hill this week, the Senate Finance Committee held a hearing to discuss Medicare's sustainable growth-rate formula.  Finance Committee Chair Max Baucus (D-Mont.) and Senator Orrin Hatch of Utah, said they felt an urgency to act this year to repeal the formula and replace it with a new system.  “I believe we currently have a good window of opportunity before us but we need to act very soon,” Hatch said during the hearing.  Indeed the official price tag of SGR repeal is estimated to be roughly $139 billion, down from more than $300 billion last year.  But two significant questions remain: what a replacement payment system looks like, and how to pay for putting it in place. And there is still no agreement between lawmakers on how to offset that cost.  The Senate Finance Committee has requested feedback from providers on their ideas to move away from the fee-for-service model dominating Medicare payments.  Responses are due back by the end of the month.

CMS Looks to Encourage More Participation in Bundled Payments ModelCMS is accepting additional applications from hospitals to participate in Model 1 of the Bundled Payments for Care Improvement Initiative, the agency recently announced.  The Medicare demonstration includes four models of care that bundle payments for multiple services received during an episode of inpatient and/or post-acute care.  Model 1, open to acute-care hospitals paid under the inpatient prospective payment system, defines the episode of care as an inpatient stay.  Participants agree to provide a standard discount to Medicare from the usual Part A hospital inpatient payments.  Interested organizations should submit an Information Intake Form to within 75 days.

Second Wave of Innovation Grants Now Available

The CMS Innovation Center announced the availability of $1 billion to test new payment and delivery reform models. The second round of innovation grants will seek to address gaps identified after the first wave of grants were disbursed last year.  The new projects will address ways to: rapidly reduce costs for Medicare, Medicaid and CHIP outpatient and post acute care costs; improve care for populations with specialized needs; improve clinical and financial models for specific provider types; and improve care through population-based approaches defined by geography or socioeconomic class.  “These awards will continue our work to drive down health care costs while providing high quality care to all Americans, and I’m excited to see the innovative ideas these applicants will bring to the table,” Secretary Sebelius said. “Organizations from the public and private sectors throughout the country are finding creative solutions to our health care system challenges and these awards will continue to stimulate these ideas.”  During the first round of grants, over 3000 applications were reviewed, resulting in 107 awards.

ONC Guide Looks to Help Providers Meet ‘Transitions of Care’ Requirements for Stage 2 Meaningful Use

The Office of the National Coordinator recently released a guide on how to meet the Transitions of Care requirements for Stage 2 Meaningful Use.  The purpose of the document, “is to provide Health Information Exchange Organizations (HIOs) and health information service providers (HISPs) with expanded advice on how to support the Transitions of Care measure 2, which requires 10 percent of referrals by eligible providers/hospitals to be sent electronically.  Built into the document are expectations about what CMS will require if an eligible provider is audited,” the document outlined.  The Stage 2 transition of care measures requires eligible health care providers and hospitals to use certified EHR systems or information exchanges to: