CMS should retain mandatory payment bundles, health policy experts say

The Centers for Medicare and Medicaid Services should continue the cardiac and expanded joint replacement mandatory bundled payment models, according to health policy experts writing in Health Affairs.

U.S. Health and Human Services Secretary Tom Price delayed the implementation of mandatory models for Comprehensive Care for Joint Replacement and Episode Payment Models.

The mandatory bundles for bypass surgery for heart attack and the expanded model for hip and knee replacement to included hip repair and femur fractures, were set to launch in randomly selected hospitals in 98 metro areas starting July 1.

Price must soon decide whether to lift the delay or move in another direction by modifying the models or making them voluntary.

[Also: Tom Price might soften bundled payments, but healthcare orgs will stay the course]

Modification options include allowing physicians to take more financial risk for bundles, or maintaining the mandatory nature of the programs, but spread responsibility to all participants in an episode of care in proportion to the portion of a care they provide -- an approach sometimes called a "virtual bundle." This would put physicians and post-acute care providers directly at risk, the authors said.

The issue has become politicized as Price and many Republicans have voiced opposition to mandatory models that came out of CMS's Innovation Center and were fueled by the Affordable Care Act.

Hospitals have also opposed mandatory models, preferring a voluntary structure, the Health Affairs authors said.

Before the ACA in 2010, bundled payments were small scale tests, according to the April 10 report in Health Affairs.

"However, making these models optional would eliminate the ability to generate robust evidence on their effectiveness, dealing a severe blow to efforts to use bundled payments to improve care delivery in orthopedics and cardiac care, and to the chances for bringing bundled payments to scale nationally in the coming years," said the Health Affairs authors Tim Gronniger, Matthew Fiedler, Kavita Patel, Loren Adler, and Paul B. Ginsburg.

[Also: Expert: Trump administration 'buying time' by delaying bundled payment programs]

The voluntary models in the Bundled Payments for Care Improvement initiative, or BPCI, have the weakness of limited size.

"Although BPCI was the largest test of bundled payment models yet conducted, many episodes had too little volume to generate statistically precise estimates of the model's effects with respect to those conditions," the authors said. "Another weakness of voluntary models is selective participation."

Providers which elected to participate in BPCI were in markets with twice as many specialists per capita as non-BPCI markets, Health Affairs said. This lead to criticism that differences in performance were reflected differences in participants, rather than care redesign.

Mandatory models for CJR and EPM, avoid this problem.

"If bundled payments are ever to reach national scale in Medicare or elsewhere, we will need evidence that they work for all providers, not just 'early adopters,'" the authors said.

[Also: CMS delays 2 bundled payment programs]

Mandatory approaches set common spending benchmarks. In voluntary programs, setting common benchmarks for all providers can keep historically high-cost providers from participating, while providing a windfall to historically low-cost providers, the authors said.

To offset this, voluntary programs must tailor benchmarks to the historical experience of each participant by rewarding higher-cost participants and penalizing lower-cost providers, they said.

Moreover, making the programs voluntary would send a damaging signal to the healthcare industry about CMS' ability to carry out mandatory demonstrations, they said. It could also curtail the effectiveness of the Innovation Center.

"In addition, such a retrenchment could have ripple effects for private payment reform efforts that attempt to complement CMS programs," they said. "Making these models optional would be a severe blow to efforts to use bundled payments to improve care delivery in orthopedics and cardiac care, and to the chances for bringing bundled payments to scale nationally in the coming years."

Gronniger is the former chief of staff and director of Delivery System Reform at CMS; Fiedler is a fellow with the Center for Health Policy in Brookings' Economic Studies Program; Patel is a physician and nonresident Senior Fellow at the Brookings Institution and was previously a director of Policy for The White House under President Obama; Adler is associate director of the Center for Health Policy at the Brookings Institution; Ginsburg directs the Schaeffer Initiative for Innovation in Health Policy and is the Leonard D. Schaeffer chair in Health Policy Studies at the Brookings Institution.

Twitter: @SusanJMorse