Is HHS’ Proposal to Scale Back Mandatory Bundled Payments a Step Back from Value-Based Care? Many Healthcare Experts Say No | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Is HHS’ Proposal to Scale Back Mandatory Bundled Payments a Step Back from Value-Based Care? Many Healthcare Experts Say No

August 18, 2017
by Heather Landi
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Some healthcare experts say HHS's proposal to cancel mandatory bundled payment programs will not slow down the drive to value-based payment models, and it's time for healthcare providers to get on board
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Last Thursday, the Department of Health and Human Services (HHS) posted a rule title that proposed eliminating mandatory bundled payment programs in several areas of healthcare including cardiac care and joint replacement. The Centers for Medicare and Medicaid (CMS) then followed up that rule posting with a press release Tuesday that provided more details regarding its proposal to change the Comprehensive Care for Joint Replacement Model and cancel the mandatory Episode Payment Models and Cardiac Rehabilitation Incentive payment model.

The proposed rule would cancel the mandatory bundled payment programs for heart attacks and bypass surgeries as well as expansion of the existing Comprehensive Care for Joint Replacement model (CJR) to include surgical treatments for hip and femur fractures. CMS officials said the proposed rule aims to provide “greater flexibility and choice for hospitals in orthopedic care for Medicare beneficiaries.”

As background, back in July 2016, during the administration of former President Barack Obama, HHS announced the introduction of a mandatory bundled payment for care for heart attacks and for cardiac bypass surgery and an extension of the existing bundled payment model for hip replacements to other hip surgeries. HHS announced the mandatory bundled payments for total hip and knee replacement procedures, which was imposed on providers in 67 metropolitan statistical areas (MSAs), in November 2015.

These bundled payment models for cardiac care, in addition to the extension of the existing bundled payment model for hip replacements to other hip surgeries, were perceived as a major step in forcing reimbursement forward into value-based purchasing.

Now, with this latest proposed from CMS under the Trump Administration, the agency is proposing to reduce the number of mandatory geographic areas participating in the Center for Medicare and Medicaid Innovation’s (Innovation Center) CJR model from 67 to 34. In addition, CMS proposes to allow CJR participants in the 33 remaining areas to participate on a voluntary basis. In this rule, CMS also proposes to make participation in the CJR model voluntary for all low volume and rural hospitals in all of the CJR geographic areas.

CMS also is proposing through this rule to cancel the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model, which were scheduled to begin on January 1, 2018. “Eliminating these models would give CMS greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute-care spectrum,” CMS said in a press release.

Moving forward, CMS says it expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts. “The changes in the proposed rule would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models,” CMS said.

Some healthcare organizations immediately voiced concerns that the proposal from HHS, under Secretary Tom Price, M.D., signals that CMS is taking its foot off the accelerator when it comes to pushing providers to move to advanced alternative payment models (APMs).

Blair Childs, senior vice president of public affairs for Premier Inc., said in a statement,” While we appreciate CMS making an effort to address stakeholder concerns about large-scale mandatory models, we are disappointed with the proposal to cancel EPM and CR models without offering alternatives to replace them. We believe CMS needs to be a strong leader and create more incentives for providers to move to advanced alternative payment models, including bundled payment. We hope that the promise for a future program that builds on the Bundled Payments for Care Improvement (BPCI) program is quickly followed up on with a fuller, specific proposal. These new models are essential for providers to earn the five percent physician payment bonuses under the MACRA Quality Payment Program (QPP).” 

What’s more, Childs said, “Members of Premier have been steadfast advocates in favor of moving away from the perverse incentives in Medicare’s micro-managing fee-for-service system in favor of more accountable, coordinated alternative care models. Through 15 years of experience, we know these models improve quality, reduce costs and enhance the overall care experience. We hope to work with CMS to continue to advance APMs and bundled payment’s uptake in the market.”

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