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Medicare Bundle Backlash is Brewing

News  |  By Christopher Cheney  
   December 22, 2016

Despite headwinds, Medicare officials are launching mandatory cardiac-care bundled payments and expanding similar episode-of-care reimbursement programs for orthopedic care.

The Centers for Medicare and Medicaid Services is forging ahead with efforts to expand mandatory bundled payment programs, but increasing resistance to the initiatives is adding uncertainty to the reform effort.

On December 20, CMS announced it will implement a trio of Medicare cardiac-care bundled payment programs beginning in July 2017: the Acute Myocardial Infarction (AMI) model, the Coronary Artery Bypass Graft (CABG) model, and the Cardiac Rehabilitation (CR) incentive payment model.

The cardiac-care bundled payments programs will be mandatory for hospitals in 98 markets nationwide.

CMS also unveiled a new episode-of-care model for the agency's Comprehensive Care for Joint Replacement (CJR) bundled payments program for orthopedic care.

The Surgical Hip and Femur Fracture Treatment (SHFFT) model expands CJR reimbursement for hip and knee replacement procedures to include payments for Medicare beneficiaries who undergo surgery for hip fractures.

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The AIM, CABG, CR and SHFFT bundled payments programs will follow the same implementation timeline: the first performance period for the new episode-of-care models will begin July 1, 2017, and the models are scheduled to operate through December 2021, according to the CMS website.

New Hurdles
As CMS presses the agency's campaign to expand Medicare's mandatory bundled payment programs, internal and external hurdles are looming in 2017.

Next year, internal opposition to mandatory bundled payment programs is likely to be most intense among the leadership of the Department of Health and Human Services (HHS), the Cabinet-level agency that oversees CMS.

President-elect Trump's nominee to lead HHS—Rep. Tom Price, MD, R-GA—has been among the fiercest congressional critics of mandatory bundled payments.

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In September, Price and fellow House members Charles Boustany, R-LA, and Erik Paulsen, R-MN, led an effort calling on CMS to abandon mandatory payment programs including CJR and the new cardiac-care bundles.

In a letter to CMS acting Administrator Andy Slavitt and Deputy Administrator Patrick Conway, signed by Price and 178 other House lawmakers, the congressmen accused the agency of overreach.

"[CMS] has exceeded its authority, failed to engage stakeholders, and has upset the balance of power between the legislative and executive branches," the letter says. "What makes these proposals even more disconcerting is their potentially negative effects on patients, especially our vulnerable seniors."

Healthcare providers have also expressed skepticism about Medicare's mandatory bundled payments programs. In surveys released earlier this year, a majority of hospitals reported they were either unprepared for CJR or expected to lose money on reimbursement from the program.

The Chicago-based American Hospital Association is sounding alarm over this week's CMS announcement about the new mandatory cardiac-care bundled payments and SHFFT.

'Too Much, Too Soon'
"While we are pleased they made some improvement to the programs, such as flexibility on risk adjustment and MACRA participation, we remain very concerned about several key issues, particularly the pace of change," Tom Nickels, AHA executive vice president, said in a prepared statement.

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"The bundled payment model for cardiac care is the second mandatory demonstration project the agency has finalized in just the past 15 months. This is too much, too soon," Nickels said.

"Regrettably, at the same time, the agency finalized its plans to expand and further complicate its existing mandatory hip and knee bundled payment model less than a year after it began, and before fully evaluating its results."

Clinicians who participate in AIM, CABG, CR and SHFFT will qualify for Advanced Alternative Payment Model (APM) bonus payments under Medicare's new value-based payment system, the Medicare Access and CHIP Reauthorization Act.

The Advanced APM payment pathway under MACRA awards bonuses as high as 5% for participating clinicians.

Christopher Cheney is the CMO editor at HealthLeaders.

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