Providers waiting for the right time to transition to value-based care got the sign they were waiting for: The Centers for Medicare & Medicaid Services (CMS) has proposed a mandatory Cardiac Rehabilitation (CR) Incentive Payment Model. Under the model, hospitals will be held financially accountable for an anchor hospitalization and 90 days of post-acute care. The announcement comes on the heels of the Comprehensive Care for Joint Replacement (CJR) model and requires a similar system of data-driven risk management. The impact of CR will be larger than the bundle for hips and knees, affecting 98 randomly selected metropolitan statistical areas (MSA). The CR bundles are set to begin on July 1, 2017.
Heart disease is a leading cause of death in the U.S.; the American Heart Association estimates more than $316 billion in direct and indirect costs for treating cardiovascular disease and stroke in 2014. The CR Incentive Payment Model proposal underscored the need for improved clinical and financial outcomes by stating that “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.”
Hospitals looking to succeed in tomorrow's reimbursement model will need to enhance their data analytics capabilities, develop stronger post-acute networks and align physicians to achieve desired results. BKD’s dedicated team of advanced payment model leaders understands the challenge of changing reimbursement and is prepared to assist you. Visit our Health Care Payment Reform Resource Center to learn more about our Outcomes Compass™ services.
Proposed Rule FAQs
Which hospitals will participate in coronary artery bypass grafting (CABG)?
Hospitals in 98 MSAs will be mandated to participate in the cardiac bundle—rural counties will be excluded, and rural hospitals will have additional protections to limit the financial risk.
What patients are eligible for the new bundle?
The new bundle will apply to Medicare patients admitted for heart attacks and bypass surgeries. The CR bundle will include acute myocardial infraction (AMI) (Diagnosis-Related Groups (DRG) 280–282), percutaneous coronary intervention (PCI) (DRGs 246–251)*, CABG (DRG 231–236) and surgical hip/femur fracture treatment episodes.
* PCI DRGs only will be included when the claim has an AMI diagnosis code in the principal or secondary position on the inpatient prospective payment system claim.
How is the cardiac bundle set up?
The cardiac bundle is similar to CJR—it will hold the hospital accountable for cost and quality of care for the entire 90-day episode. Hospitals will receive a fixed target price for each episode and have the opportunity for gainshare savings if they are under the target price at the end of the performance year.
How does this proposed mandate impact the Medicare Access and CHIP Reauthorization Act of 2015’s(MACRA) proposed rule?
Both CJR and the cardiac bundle allow physicians to potentially qualify under the Quality Payment Program for Advanced Alternative Payment Models (APM). This is positive news for physicians and hospitals looking to engage physicians in the quality redesign process, because it allows physicians to earn additional lump-sum bonuses during the first two years and bypass the sustainable growth rate formula.
What is the future of bundled payment models?
CMS indicated it plans to launch a voluntary bundled payment program in 2018 that also could potentially qualify as an APM under MACRA. Bundles are attractive to CMS because risk (target prices) easily can be measured and modulated based on performance. Providers should begin preparing for commercial bundles that adopt Medicare definitions and pricing mechanics.
Contact your BKD advisor for more information on successfully navigating bundles.