CMS Proposed Bundled Payment Rule Reflects Ongoing Health Industry Debate
CMS recently issued a proposed rule to roll back the scope of the Comprehensive Care for Joint Replacement Model (CJR) and eliminate the Episodic Payment Models (EPM) altogether. Both initiatives test bundled payment models, with the CJR launching in 2016 to improve hip and knee replacement care, and the EPM scheduled to begin in early 2018 with a focus on cardiac conditions. The announcement came as a shock to many observers, who were surprised at the extent of the proposed changes, and some suggested it was part of a larger goal of the Trump Administration to impede the growth of value-based care. While most coverage has rightly pointed out that HHS Secretary Tom Price has criticized the ACA and bundled payment models, players in the healthcare industry have also expressed significant concerns over the rapid growth of mandatory programs and the ability of healthcare providers to adapt to the changes. The proposal to scale back certain CMS initiatives is as much a reflection of the disagreements among providers about the pace of healthcare reform as it could be an ideological priority of the current administration.
The latest rule is not the first CMS has issued in regard to the CJR and EPM programs. The EPM programs and the CJR expansion, which would have broadened the covered procedures to include hip and femur fracture treatments, were originally intended to start in July 2017 but had been twice pushed back until January 2018. The delays were not unexpected, given that the programs were designed by the previous administration, which took a different approach to the implementation of value-based care. One of the primary differences has been the concern over administrative burden and fears of excessive pressure on rural and low-volume hospitals, issues often cited by Secretary Price. In addition to canceling the EPMs, the recent proposed rule eliminates the hip and femur fracture expansion component of the CJR entirely and halves mandatory participation to hospitals in 34 of 67 geographic areas, leaving the remainder voluntary. 422 of the current 795 hospitals in the CJR program would no longer face mandatory participation under the proposal, including 86 that would receive low-volume or rural hospital waivers.
CMS Bundled Payment Participation Facts
|Category||Number of Hospitals|
|Scheduled Participation in EPM, Heart Attack||691|
|Scheduled Participation in EPM, Coronary Bypass||695|
|Scheduled Participation in EPM, Cardiac Rehab||626|
|Scheduled Participation in Expanded CJR, Fracture||825|
|CJR Hospitals in Proposed Voluntary MSAs||336|
|CJR Hospitals in Mandatory MSAs with Proposed Waivers||86|
|Hospitals in at Least One Mandatory Bundled Payment Program||1,488|
Fig 1 Data from Definitive Healthcare
A number of hospital and industry groups seem to agree with some of Price’s concerns. Stakeholder feedback on the earlier proposed rules revealed a variety of criticisms. The Federation of American Hospitals (FAH) urged CMS to delay the EPM until January 2018, citing the current pace as “too fast, too soon.” FAH added that its members usually required at least 12 months to properly prepare for other episode-based payment models, and that the proposed mandatory cardiac model had not proven itself viable in previous trials. Likewise, Hospital Corporation of America (HCA) recommended a January 2018 starting date if the models were adjusted in response to hospital input and more analysis was conducted on their effectiveness. The Greater New York Hospital Association (GNYHA) suggested that the new models should no longer require mandatory participation, given the poor financial resources at safety-net hospitals to invest in the necessary infrastructure. GPO Premier Inc also advised that future bundled payment models be voluntary, arguing that existing payment frameworks may not be suitable for all hospitals or practices.
Of course, other groups criticized the delays and spoke against attempts to make the programs voluntary. The American Hospital Association cautioned that the proposed delay to 2018 should not become a habit, as many hospitals had already made investments in preparation for the new model and their efforts would be compromised by uncertainty. Analysts have also suggested that voluntary participation is detrimental to the growth of value-based care in the long run. An April post on Health Affairs argued that voluntary payment models generate inconclusive results due to a variety of factors. Positive outcomes in a limited, voluntary program may be the result of characteristics of hospitals that wanted to participate, rather than an effective model that could work at most organizations. In addition, mandatory programs tend to utilize common benchmark measurements that inspire greater performance improvements, whereas voluntary ones often employ customized scoring, which generates more participation but can improperly penalize historically low-cost providers.
While the decision to scale back the CJR program could be seen as a concession to industry concerns, the proposal to eliminate the EPMs is less easily explained. The CMS statement says that removing the EPMs will allow the agency “more flexibility to design and test innovations,” but given that they were originally announced over a year ago, canceling them outright would seem to represent a significant waste of invested resources. The original conditions and procedures targeted in the programs (heart attacks, coronary artery bypass grafts, hip and femur fractures, and cardiac rehabilitation) are already a focus of existing healthcare cost control and improvement efforts, making them logical choices for testing new payment models. It is likely that new models will be developed to address spending and outcomes in these areas, but the most recent proposal suggests they will not be implemented until later in 2018 at the earliest.
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