The Centers for Medicare & Medicaid Services recently announced a new way to pay for the care of patients who have had a heart attack or need coronary artery bypass graft surgery. CMS is seeking comment on the five-year demonstration, which would take effect July 1, 2017, in 98 randomly selected metropolitan areas.
Overview
The demonstration plan works much like the Comprehensive Care for Joint Replacement (CJR) model implemented this year. Similar to CJR, the new bundling plan would reimburse providers a set amount for an entire episode of care, from admission to 90 days after the patient is discharged. Medicare would create targets for spending, and if the total spending is less than the Medicare target, the hospitals may be eligible to receive additional payment from Medicare. If hospitals spend more than the Medicare target, they could be required to pay back Medicare for some portion of the difference. Like the CJR, the cardiac bundling plan is mandatory for hospitals in those areas.
CMS noted in the Proposed Rule that these episodes of cardiac care have been selected because, like the CJR episodes, these episodes represent high-expenditure, high-volume episodes of care for Medicare beneficiaries. However, the episodes typically result in very different patterns of care than those in the CJR. Most episodes are emergent, and not elective, and beneficiaries in these episodes commonly have chronic conditions that contribute to the initiation of the episodes and need both planned and unplanned care throughout the episode.
CMS has noted that it intends to build the Cardiac Care Model on lessons learned and comments received in the establishment of the CJR. One notable distinction is that ACOs are allowed to be collaborators under the new Cardiac Care Model, where they could not be under the CJR. CMS notes that this is due to the interest of ACOs in gainsharing during the CJR model rule making.
Move away from fee-for-service
The Cardiac Care Model confirms what many have suspected, that bundled payment and alternative payment model participation will quickly become mandatory across the industry, requiring all providers to begin to engage with the concepts of care redesign and the prospect of bearing risk. As reported by Modern Healthcare, the expansion of bundles to cardiac care is evidence that the value-based payment movement has gained substantial momentum with the government and private payers alike, said Dr. Susan Nedza, a former chief medical officer at the CMS who is now a senior vice president at MPA Healthcare Solutions. “We’ve often talked about a tipping point in the movement from fee-for-service to alternative payment models, and I believe today is the day,” Nedza said.
Potential pitfalls?
Joseph Burns, a Massachusetts-based independent journalist, writes that any new payment model may see unintended consequences. He cites Francois de Brantes, executive director of the consulting firm Health Care Incentives Improvement Institute and an expert on bundled payment models, who notes that it could lead some physicians to sell their practices to hospitals, contain too great of risk, and potential produce suboptimal care for patients.
By paying hospitals to lead these programs, physicians can serve only as participating providers rather than as organizers of care and as a result, physicians would have less flexibility to schedule these procedures at a less expensive facility outside the hospital. He is also concerned with the lack of appropriate mechanisms to adjust for the severity of illness, which increases the potential financial harm a hospital could face in caring for patients with highly complex illness levels. Burns writes that evidence suggests that these more complex patients thus tend to be referred to academic centers, which can be more expensive.
Reaction from medical groups
AMA President Andrew W. Gurman, M.D. supports the proposal, linking it to MACRA. Gurman’s statement reads: “In the landmark Medicare Access and CHIP Reauthorization Act (MACRA), Congress encouraged physicians to participate in alternative payment models that support their efforts to redesign the delivery of patient care in ways that improve quality and outcomes while also restraining spending growth. Under this new proposal, CMS is broadening its models so that physicians participating in its cardiac and orthopedic models will qualify as alternative payment model participants under MACRA. This is a good step and in keeping with the goals of MACRA.
Tom Nickels, the Executive Vice President Government Relations and Public Policy at the American Hospital Association is slightly less optimistic, raising concerns of the burdens created by CMS:
“[T]he proposal to bundle payments for cardiac care is the third mandatory demonstration project from CMS in a little over a year. Further, the agency is layering this new program on hospitals already working to implement the mandatory hip and knee bundled payment model. CMS also is proposing to expand and further complicate the hip and knee program less than four months after it began and before evaluating its results. CMS is putting the success of these critical programs at risk. Hospitals are under a tremendous burden to help ensure these complex models work for patients.”
“While we support the concept, it is important that bundled care models be carried out in such a way that clinicians are given the time and tools to truly impact patient care in the best ways possible,” says ACC President Richard A. Chazal, MD, FACC. “Changes in payment structures in health care can pose significant challenges to clinicians and must be driven by clinical practices that improve patient outcomes. We are optimistic that CMS will listen to comments, incorporate feedback from clinicians, and provide ample time for implementation of these new payment models.”