Senior federal healthcare officials took a major step in forcing reimbursement forward into value-based purchasing on Monday, when they announced the introduction of mandatory bundled payment for care for heart attacks and for cardiac bypass surgery.
In an announcement posted on the website of the Department of Health and Human Services (HHS), Health and Human Services Secretary Sylvia Mathews Burwell announced the change. As the announcement noted, “Today, the Department of Health & Human Services proposed new models that continue the Administration’s progress to shift Medicare payments from quantity to quality by creating strong incentives for hospitals to deliver better care to patients at a lower cost. These models would reward hospitals that work together with physicians and other providers to avoid complications, prevent hospital readmissions, and speed recovery.”
As the announcement said, “Today’s proposal contains three new significant policies:
> New bundled payment models for cardiac care and an extension of the existing bundled payment model for hip replacements to other hip surgeries;
> A new model to increase cardiac rehabilitation utilization; and
> A proposed pathway for physicians with significant participation in bundled payment models to qualify for payment incentives under the proposed Quality Payment Program.”
Secretary Burwell was quoted in the announcement as saying, “Having a heart attack or undergoing heart surgery is scary and stressful for patients and their families. Today’s proposal,” Ms. Burwell said, “is an important step to improving the quality of care Americans receive and driving down costs. By focusing on episodes of care and rewarding successful recoveries, bundled payments encourage hospitals to coordinate care to achieve the best outcomes possible for patients.”
Meanwhile, Patrick Conway, M.D. Principal Deputy Administrator and Chief Medical Officer in the Centers for Medicare & Medicaid Services (CMS), was quoted in the announcement as saying, “Patients want the peace of mind of knowing they will receive high-quality, coordinated care from the minute they’re admitted to the hospital through their recovery. The variation in cost and quality for the same surgery at different hospitals,” he added, “shows there are major opportunities for hospitals included in today’s models to reduce costs, improve care, and receive additional payments by improving patient outcomes.”
So what exactly is being proposed? “Under the new models in today’s rules,” the HHS announcement said, “the hospital in which a Medicare patient is admitted for care for a heart attack or bypass surgery would be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the inpatient stay and for 90 days after discharge. The proposed cardiac care policies would be phased in over a period of five years, but would begin July 1, 2017 for hospitals located in the 98 metro areas participating in the model (about one-quarter of all metro areas in the nation).”
Today’s announcement came in the form of a formal Notice of Proposed Rulemaking (NPRM). According to the fact sheet for the announcement—found here—the following changes would take place:
“Under the proposed episode payment models, the hospital in which a patient is admitted for care for a heart attack, bypass surgery, or surgical hip/femur fracture treatment would be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the inpatient stay and for 90 days after discharge. Specifically, once the models are fully in effect, participating hospitals would be paid a fixed target price for each care episode, with hospitals that deliver higher-quality care receiving a higher target price. At the end of a model performance year, actual spending for the episode (total expenditures for related services under Medicare Parts A and B) would be compared to the target price that reflects episode quality for the responsible hospital. Hospitals that work with physicians and other providers to deliver the needed care for less than the quality-adjusted target price, while meeting or exceeding quality standards, would be paid the savings achieved. Hospitals with costs exceeding the quality-adjusted target price would be required to repay Medicare.”
According to the proposed rule, “Each year, CMS would set target prices for different episodes based on historical data on total costs related to the episode of care for Medicare fee-for-service beneficiaries admitted for heart attacks, bypass surgery, or surgical hip/femur fracture treatment, beginning with the hospitalization and extending 90 days following discharge. Target prices would be adjusted based on the complexity of treating a heart attack or providing bypass surgery. For example, CMS proposes to adjust prices upwards for those heart attack patients who need to be transferred to a different hospital during their care to reflect the most resource-intensive cardiac care provided during the hospitalization. For heart attack patients, target prices would also differ depending on whether the patient was treated with surgery or medical management.”
Also, the NPRM document explained, “Target prices would be based on a blend of hospital-specific data and regional historical data,” with a blend of participant-specific and regional data that would shift over time from two-thirds participant-specific data and one-third regional data, beginning on July 1, 2017, and with “only regional data” used by performance years 4 and 5, which will be 2020 and 2021.
If the proposed rule is finalized as proposed, “Hospitals that delivered higher-quality care would be eligible to be paid a higher amount of savings than those with lower quality performance,” according to the NPRM document. “Specifically, an individual hospital’s quality-adjusted target price would be based on a 1.5 to 3 percent discount rate relative to historical spending, with the lowest discount percentage for those hospitals providing the highest-quality care. Payments would be based on a quality-first principle: only hospitals meeting quality standards would be paid the savings from providing care for less than the quality-adjusted target price.”
What kinds of data would be used? According to the NPRM document, CMS will use the following established measures: NQF #0230, “Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Myocardial Infarction (AMI) Hospitalization”; “excess days in acute care after hospitalization for acute myocardial infarction”; NQF # 0166, “Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey”; and NQF #2473, “Voluntary Hybrid Hospital 30-Day, All-Cause, Risk-Standardized Mortality eMeasure.”
When it comes to coronary artery bypass surgery (CABG), CMS will use the following: NQF #2558, “Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft (CABG) Surgery; and NQF #0166, “HCAHPS Survey.”
Meanwhile, CMS also proposed to expand its first and currently only existing bundled payment model, for total joint replacement surgeries, to include care for hip and femur fractures. The mandatory total joint replacement program took effect in January.
Stakeholders and observers had long speculated that cardiac procedures would be next in the expansion of bundled payment models.
existing measures for hip/femur fractures and for complications following hip and knee replacement surgery, would be used, in those clinical areas.
“As part of implementing the new models,” the NPRM document said, “CMS would provide hospitals with tools to help them improve care coordination and deliver higher-quality care. Proposed activities include providing participants with relevant spending and utilization data, waiving certain Medicare requirements to facilitate development of novel approaches to the delivery of care, and facilitating the sharing of best practices between participants through a learning and diffusion program.”
By Monday evening, the first official reaction had emerged. Blair Childs, senior vice president of the Charlotte-based Premier Inc., said in a statement that “Members of the Premier alliance strongly support the expansion of alternative payment options for providers, including new models for cardiac and orthopedic procedures. These models have been shown to incent care coordination, quality improvement and cost containment. Moreover, we commend CMS for recognizing that these models need to conform with the definition of advanced alternative payment models, as outlined in MACRA, for the purposes of allowing qualified professionals to earn upside bonus payments. However,” Childs added, “we continue to believe that these new models should be optional, rather than mandatory, programs.”
Healthcare Informatics will update readers as new developments in this story emerge.