Industry Insights

Cardiac Arrest:  Hospitals in Mandatory Cardiac Bundling Announced

December 2016
Author:  Eric Rogers

Eric Rogers

Senior Managing Consultant

Consulting

910 E. St. Louis Street, Suite 200
P.O. Box 1190
Springfield, MO 65801-1190 (65806)

Springfield
417.865.8701

On December 20, 2016, the Centers for Medicare & Medicaid Services (CMS) approved the mandatory expansion of new cardiac bundles within the episode payment model (EPM). This becomes effective for hospitals admitting patients on or after July 1, 2017. The bundles are:

  • Acute myocardial infarction (AMI):  Medicare Severity-Diagnosis Related Groups (MS-DRG) 280-282
  • Percutaneous Coronary Intervention (PCI):  MS-DRGs 246-251 (if an AMI ICD-DM diagnosis code is in the principal or secondary position on the claim)
  • Coronary artery bypass grafting (CABG):  MS-DRGs 231-236

The five-year program holds hospitals financially accountable for episodes of care lasting 90 days after the inpatient discharge date, including all related care covered by Medicare Parts A and B. Prospective episode target prices will be set, and CMS will continue to pay all providers within their existing fee-for-service (FFS) methodology. An automatic 3 percent discount will be applied to target prices. At the end of each performance year, the total FFS payments will be compared to target prices, revealing a reconciliation payment or repayment to CMS. Key takeaways include:

  • Episode definitions and exclusions
  • Transfer rules
  • Retrospective reconciliation
  • Quality metrics
  • Gainsharing
  • Regulatory waivers
  • Incentives for cardiac rehabilitation

Medicare also is implementing a unique cardiac rehabilitation incentive payment model to improve patient outcomes following AMI or CABG in select metropolitan statistical areas (MSA). In addition, hospitals currently subject to the Comprehensive Care for Joint Replacement model will have three additional DRGs (480-482) for Surgical Hip and Femur Fracture Treatment (SHFFT) added to their existing responsibilities. All MSAs subject to the EPM are listed on the CMS Innovation Center website.

Action Items for Executives

  • Identify sources of costs during the 90-day episode
  • Engage physicians to improve clinical standards that minimize variation in care and use
  • Evaluate opportunities with downstream partners, such as skilled nursing and home health
  • Identify patterns of readmission and develop processes to mitigate potentially avoidable complications

Visit the Health Care Payment Reform Resource Center for additional information and tools.

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