CMS Intends to Backspace over Payment Models Introduced pre-TrumpFor the last few years, the Centers for Medicare & Medicaid Services (CMS) has been working toward implementing more of the bundled payment approach of reimbursement (a value-based model of care), rather than the relying solely on the traditional fee-for-service model. The former pays providers a set amount for the totality of a course of treatment for a medical condition, rather than for discrete visits. Ostensibly, the goal is quality over quantity, as well as savings for the government and, in theory, better care for the patient.

A recent announcement by CMS might seem to belie that value-based, approach, however.

Proposed rule: good-bye to EMPs and CR Incentive Payments … and to many CJR models

To mixed reviews, the CMS recently announced its decision to dismantle some payment models that were created in the Obama Administration and had either recently begun or were slated to go into effect in 2018. The proposed rule, published last month, involves eliminating the Cardiac Rehabilitation (CR) Incentive Payment Model and the Episode Payment Models (EPMs). Further, regarding the currently in-effect Comprehensive Care for Joint Replacement Model (CJR), the rule would decrease, by nearly half, the number of required participation locations.

The CMS had estimated that the value-based approach of these latter two models could save the government hundreds of millions of dollars (around $300 million just for the CJR model). Many providers, however, have said that they’d be onerously difficult and costly to implement. Apparently the Trump Administration agrees.

CMS Administrator Seema Verma said that withdrawing these payment models would allow the agency to “test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals.”

At a glance: the models impacted if the rule is implemented

Although not a bundled payment approach, the CR Incentive Payment Model has as its goal a reduction of health crises, and therefore shares the mindset behind the other models. It employs a stepwise method of reimbursement, beginning at $25 per visit for cardiac rehabilitation care and, after eleven more visits, increasing to $175. It encourages hospitals to improve cardiovascular health in patients via coordinating rehab and support services according to the treatment plan. In this sense, the model can save the government money down the road because heart-healthy patients won’t need to be readmitted for cardiac crises.

EPMs involve bundled payments for a triad of serious medical conditions: treatment for surgical hip/femur fracture; coronary artery bypass graft, and acute myocardial infarction. In nearly 100 areas across the country, participation will be mandatory for the latter two conditions beginning in January (if the CMS doesn’t pull the plug before then, of course). Conversely, participating in the EPM for the first condition will only be required in the hospitals slated to use the CJR model (at this point there are 67 geographic locations where required participation by hospitals would begin in January; however, if the CMS implements its proposed rule, that number would be reduced to 34).

The CJR model began in the spring of 2016 and is set to continue for five years. It is set up to test quality measurements within bundled payment approaches specifically for treatment for knee and hip replacements. Hospitals earn incentives for broadening the lens of patient care to include coordination with other care facilities and doctors. A CJR episode of care becomes the responsibility of the participating hospital, not only in terms of quality, but also in terms of cost.

CMS decision met with applause and boos

Many groups have praised the CMS intention to scale back the CJR model and to do away with the CR Incentive Payment Model and EPMs. In a press release, Bruce Siegel of America’s Essential Hospitals opined that care facilities “need more time before facing another demonstration and the potential for mandatory participation in two models simultaneously.”

The praise is not the blanket variety, however. Other groups have objected to the proposed move, saying it will work counter to attempts at effectively and wisely managing the rising costs of healthcare. For instance, Dr. Bob Kocher, special assistant to President Obama for healthcare and economic policy in 2009 and 2010, and Jason Furman, chairman of the White House Council of Economic Advisors under President Obama: the two wrote an op-ed piece for The Wall Street Journal criticizing the proposed rule.

This blog post is provided for educational purposes only and is not offered as, and should not be relied on as, legal advice. Any individual or entity reading this information should consult an attorney for their particular situation. For more information/questions regarding any legal matters, please email or call 310.203.2800.