CMS mandates new bundled payment program, will qualify as MACRA advanced payment model

Patrick Conway, MD, acting principal deputy administrator for the Centers for Medicare and Medicaid Services.

New mandatory bundled payments for cardiac care and rehabilitation will qualify for incentive payments under MACRA's new alternative payment model starting in 2018, according to Patrick Conway, MD, acting principal deputy administrator for the Centers for Medicare and Medicaid Services.

The bundled payment models proposed in Monday's rule – as well as the comprehensive care for joint replacement model, which began this year – could qualify as APMs beginning in 2018 for physicians who collaborate with participating hospitals, according to CMS.

For the new cardiac bundles, CMS will select hospitals in 98 random metropolitan  areas. There is no application process, making participation mandatory, according to Conway.

The models will be phased in over five years starting July 2017.

Once the models are fully in effect, participating hospitals would be paid a fixed target price for each care episode, with hospitals that deliver higher-quality care receiving a higher target price.

"We have voluntary bundled payment models now," Conway said of hip and knee models. "Over 1,500 physician groups are participating."

[Also: Humana partners with orthopedic specialists in bundled payments for knee, hip replacement]

Those models are doing well, he said. The new hip/femur fracture surgeries model builds upon the existing model. CMS proposes to test these bundled payments in the same 67 metro areas that were selected for that model.

Specifically, the proposed rule would create a track in each model to potentially qualify for financial incentives under APM beginning in January for CJR or April for heart attacks and bypass surgery.

It would require participants to bear risk for monetary losses that meets the proposed nominal risk criteria; use quality measures that meet the proposed measure requirements to base payments; and
allow participants to opt into a track that requires use of Certified Electronic Health Record Technology.

The new bundled payment models are to improve the quality of care and reduce costs for beneficiaries who have a heart attack or undergo bypass surgery.

"Currently only 15 percent of patients receive rehabilitation," Conway said.

[Also: CMS extends participation in the Bundled Payments for Care Improvement initiative]

In some cases, hospitals, doctors, and rehabilitation facilities work together to support a patient from heart attack or surgery all the way through recovery. But in other cases, coordination breaks down, especially when a patient leaves the hospital.

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, CMS said.

Under the new model, the hospital in which a Medicare patient is admitted for care for a heart attack or bypass surgery would be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the inpatient stay and for 90 days after discharge.

The proposed cardiac care policies would be phased in over a period of five years, but would begin July 1, 2017 for hospitals located in the 98 metro areas participating in the model. This area represents about one-quarter of all metro areas in the nation.

These models reward hospitals that work together with physicians and other providers to avoid complications, prevent hospital readmissions, and speed recovery for better care at a lower cost.

The proposed bundled payment models for cardiac care includes medical as well as surgical services.

The cardiac care model and the cardiac rehabilitation proposal goes with the Million Heart awards announced last week – to support risk assessment and prevention of cardiovascular disease.

Heart attacks and strokes cause one in three deaths and result in in over $300 billion of health care costs each year.

These new models support the administration's goal to have 50 percent of traditional Medicare payments flowing through alternative payment models by 2018. Already, 30 percent of Medicare payments go through alternative models.

"The variation in cost and quality for the same surgery at different hospitals shows there are major opportunities for hospitals included in today's models to reduce costs, improve care, and receive additional payments by improving patient outcomes," Conway said.

Comments on the proposed rule are due 60 days after it publishes in the Federal Register.

Twitter: @SusanJMorse