Industry Insights

CMS Shifts to “Choose Your Own Risk” for Bundles

August 2017
Author:  Steve Smith

Steve Smith

Managing Consultant

Consulting

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Kansas City, MO 64106-2246

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On August 15, 2017, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule to cancel three mandatory bundled payment programs with scheduled effective dates of January 1, 2018, as well as change the Comprehensive Care for Joint Replacement (CJR) model, which has been in place since April 2016. Specifically, the proposed rule would:

  • Cancel the mandatory Episode Payment Models (EPM), which include the Acute Myocardial Infarction and Coronary Artery Bypass Graft models. These models would have affected 98 metropolitan statistical areas (MSA).
  • Cancel the Cardiac Rehabilitation (CR) Incentive Payment Model, which would have affected 90 MSAs
  • Cancel the mandatory Surgical Hip and Femur Fracture Treatment bundled payment model, which would have affected 67 MSAs
  • Change the nature of the existing CJR model from 67 MSAs to 34 mandatory MSAs. CJR participants in the 33 remaining MSAs will still have the opportunity to participate in the model on a voluntary basis. CMS also has proposed voluntary participation in the CJR model for all low-volume and rural hospitals in all CJR MSAs.

The proposed changes to these models don’t signal a desire for CMS to move away from value-based reimbursement. Instead, the new message during this transitional period will be one of choice over mandate. In an August 15 press release, CMS Administrator Seema Verma 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. 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.” It’s expected CMS will expand opportunities for voluntary bundles under the new Bundled Payments for Care Improvement initiative, which also would allow a provider to qualify as an Advanced Alternative Payment Model under the Medicare Access and CHIP Reauthorization Act of 2015.

Many providers are intrigued by voluntary programs that allow them to determine how much risk is acceptable and whether a given model is a good fit for their organization. Accountable Care Organization applications have sharply risen in the last few years as more providers desire to participate in the Medicare Shared Savings Program. The voluntary Comprehensive Primary Care Plus model currently has 2,866 participating practices, which will increase when a second round of providers begin participation January 1, 2018.

Practices should know the shift to value-based reimbursement extends beyond CMS and the models affected by the proposed rule. Commercial payors continue to develop, implement and evaluate value-based reimbursement strategies, and the proposed rule isn’t expected to curb that trend. Instead, practices should expect a continued move toward value-based reimbursement, but in a manner that allows the practice greater flexibility in selecting payment models that fit the practice’s operations and risk tolerance.

Read more about the CJR model here.

Read more about the EPM and CR Incentive Payment Model cancellation here.

The proposed rule (CMS-5524-P) can be downloaded from the Federal Register here. Public comments on the proposed rule are due by October 16, 2017, at 11:59 p.m.

Contact your BKD advisor if you have questions.

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