BREAKING: CMS Officially Cancels Mandatory Hip Fracture, Cardiac Bundled Payment Models | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

BREAKING: CMS Officially Cancels Mandatory Hip Fracture, Cardiac Bundled Payment Models

November 30, 2017
by Rajiv Leventhal
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Federal health officials in the Trump administration have signaled in the past that they were not fans of mandating hospitals to participate in these bundled payment initiatives

The Centers for Medicare and Medicaid (CMS) has finalized a rule that will cancel mandatory hip fracture and cardiac bundled payment models.

In August, the Department of Health and Human Services (HHS) issued a proposed rule that would cancel these mandatory bundled payment models—initiatives that were delayed twice before that point in time by then-HHS Secretary Tom Price, M.D.—once in March and again in May. Now, in a Nov. 30 press release, CMS officials said it is finalizing the cancellation of the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) Incentive Payment Model that were to begin on January 1, 2018 and will also implement changes to the Comprehensive Care for Joint Replacement (CJR) Model. The motivation behind the ruling, CMS senior officials said, was to “offer greater flexibility and choice for hospitals in providing care to Medicare patients.”

As per the final rule, CMS is specifically reducing the number of mandatory geographic areas participating in CJR from 67 areas to 34 areas, and in an effort to address the unique needs of rural providers, the federal agency is also making participation voluntary for all low-volume and rural hospitals participating in the model in all 67 geographic areas. CMS is additionally establishing and seeking comment on a final policy to provide flexibility in determining episode costs for participant hospitals located in areas impacted by extreme and uncontrollable circumstances, such as the major hurricanes of 2017.

It was only just last year when federal officials under the Obama Administration announced a new introduction of mandatory bundled payment for care for heart attacks and for cardiac bypass surgery. The idea, the government said at the time, was to reward hospitals that work together with physicians and other providers to avoid complications, prevent hospital readmissions, and speed recovery.

It was also at this time when HHS pointed out that in 2014, more than 200,000 Medicare beneficiaries were hospitalized for heart attack treatment or underwent bypass surgery, costing Medicare over $6 billion. But the cost of treating patients for bypass surgery, hospitalization, and recovery varied by 50 percent across hospitals, and the share of heart attack patients readmitted to the hospital within 30 days varied by more than 50 percent. As such, these bundled payment efforts are designed to reduce this excessive spending since these models pay multiple providers with a single lump-sum payment for a for a solitary episode of care.

But CMS Administrator Seema Verma has said in the past that she doesn’t think these bundled payment models should be mandatory. Verma added in a statement today, “While CMS continues to believe that bundled payment models offer opportunities to improve quality and care coordination while lowering spending, we believe that focusing on developing different bundled payment models and engaging more providers is the best way to drive health system change while minimizing burden and maintaining access to care. We anticipate announcing new voluntary payment bundles soon.”

Blair Childs, senior vice president of public affairs, Charlotte, N.C.-based Premier, said in a statement today that his organization is unhappy with this ruling. The statement read, “Premier and its members are extremely disappointed with CMS’ decision to eliminate Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) Incentive Payment Model without contemporaneously offering voluntary alternatives to replace them. Current bundled payment models are actively transforming care, driving improved patient outcomes and reducing healthcare costs. Approximately two-thirds of CJR participants in Premier’s Bundled Payment Collaborative improved care for their joint replacement patients by achieving excellent or good quality scores, and also reduced Medicare costs. Yet, CMS is pulling the rug out from underneath providers without offering another avenue to participate and apply their significant investments to the benefit of patients.”

Childs added, “We urge CMS to quickly release its promised new episode payment model for 2018 to ensure there is not a similar gap for Bundled Payments for Care Improvement (BPCI) participants breaking their momentum in moving into a follow-on initiative. The new model is essential for advancing alternative payment models and qualifying eligible clinicians to earn the five percent bonus under the MACRA Quality Payment Program (QPP).”

The mandatory hip fracture and cardiac bundled payment models were to be operated by the CMS Innovation Center (CMMI), a center which has been called into question by Price and others for overstepping its authority by proposing mandatory healthcare payment and service delivery models. In its release today, CMS said, “Not pursuing these models gives CMS greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute care spectrum.”

Moving forward, CMS said it expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory bundled payment models.

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