CMS cancels mandatory episode payment models, cuts participation in joint replacement model

The Centers for Medicare and Medicaid Services on Tuesday officially announced it is pulling back from mandatory bundled payment models set up under the Obama administration.

CMS is proposing to cancel the episode payment models and the cardiac rehabilitation incentive payment model, which were scheduled to begin on January 1, 2018.

[Also: Trump administration, HHS stepping away from Affordable Care Act promotion, bundled payments]

CMS is also reducing the number of mandatory geographic areas participating in the comprehensive care for joint replacement model, from 67 to 34.

Participants from the 33 remaining areas may take part on a voluntary basis, CMS said. Voluntary participation in the CJR model is to allow for low volume and rural hospitals.

Eliminating these models gives CMS greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute-care spectrum, the agency said.

"Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals," said CMS Administrator Seema Verma. "Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries."

Health and Human Services Secretary Tom Price, a physician, has long opposed mandatory bundled initiatives.

[Also: CMS should retain mandatory payment bundles, health policy experts say]

Moving forward, CMS expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts, including additional voluntary episode-based payment models, the agency said. 

The episode payment models and the cardiac rehab incentive models were designed as mandatory payment models to test the effects of bundling cardiac and orthopedic care beginning in 2018.

[Also: Patrick Conway is leaving CMS to head Blue Cross Blue Shield North Carolina]

They were established by CMS's Innovation Center, headed by Patrick Conway, MD, who last week announced he was leaving to lead Blue Cross Blue Shield North Carolina as of Oct. 1. Conway also served under the Obama administration.

Public comment is due by October 16.