When the news last week broke that the Centers for Medicare and Medicaid (CMS) finalized a rule that will cancel mandatory hip fracture and cardiac bundled payment models, industry observers had mixed reactions, but given the current administration’s past sentiments on forcing providers into these initiatives, the rule did not come as a surprise to many.
Indeed, although it was just last year when federal officials under the Obama administration announced new mandatory bundled payment models for care for heart attacks and for cardiac bypass surgery, new health officials in the Trump administration were not keen on the “mandatory” aspect of the models. As such, in last week’s announcement, CMS Administrator Seema Verma said in a statement, “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.”
Some organizations, like the Charlotte, N.C.-based Premier, were unhappy with the ruling, pointing out that current bundled payment models are “actively transforming care, driving improved patient outcomes and reducing healthcare costs,” adding that CMS has decided to “pull the rug out from underneath providers without offering another avenue to participate and apply their significant investments to the benefit of patients.”
But for many others, the news came as a welcome relief. Mark Froimson, M.D., a longtime orthopedic surgeon and current president of the American Association of Hip and Knee Surgeons (AAHKS), says that he and his colleagues “were delighted that Medicare had pulled back on the mandatory bundled payments.” Froimson, who is also a principal at Riverside Health Advisors, and who works at San Francisco-based health IT vendor Clarify Health as a clinical consultant, says while there is general optimism around the episode-based payment concept, these current models that are being pulled back “would not have been effective and were filled with challenges for physicians, health systems, and patients.”
Mark Froimson, M.D.
Explaining further, Froimson feels that the “mandatory” aspect of the models meant that whether a hospital was prepared or not, whether it had invested the infrastructure or not, or had the clinical expertise or not, it would be thrust into these initiatives without choice. “Many hospitals are working on fairly thin margins and have to make tough decisions on where to invest resources. So for a number of them, this just didn’t rise up to their priority level, especially those who oversee safety-net populations, and weren’t equipped to invest. We thought it was not the right approach, to force with a broad brush all types of hospitals into a single model. These hospitals have very different patient populations, with different histories and different resources, so the fact that the models were mandatory and broad-brushed was not a good thing,” he says.
Chris Garcia, CEO of Remedy Partners, a Darien, Conn.-based company that helps hospitals and physicians with bundled payment programs, agrees with the ruling as well, noting that the voluntary nature of these programs “is critical and allows for much more rapid adoption.” He adds, “When you try to shove something down someone’s throat, they always try to figure out workarounds to make sure it doesn’t impact them negatively. The [mandatory] CJR [Comprehensive Care for Joint Replacement] Model had a detrimental impact on some and a positive impact on others. The government is moving away from anointing winners and losers, instead [focusing] on taking all interested parties. We think they can attract an extraordinary program on a voluntary basis rather than go on a mandatory route,” he says.
Garcia and Froimson both point to the government’s existing Bundled Payments for Care Improvement (BPCI) voluntary initiative, with four models of care, as proof that mandating participants is not necessary. Garcia attests that “There is very large pent-up demand right now for others to engage in this program.”
Remedy Partners is the largest awardee convener under the BPCI program, and according to Garcia, the company helps its clients manage more than $4 billion of Medicare spending per year, or about one-third of the total BPCI program spend. What’s more, he says that the private market has invested more than $300 million in this initiative. “This program is working; patients are recovering in lower-cost settings, having more successful outcomes, and staying home rather than being readmitted. So we don’t want to lose that momentum, and the [government] also knows that as they want to move away from fee-for-service and toward value.”