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Washington Highlights

AAMC Submits Comment Letter to CMS to Delay Episode Payment Models

April 21, 2017—The AAMC April 19 submitted a comment letter to the Centers for Medicare and Medicaid Services (CMS) regarding the delay of Episode Payment Models (EPMs) under the interim final rule with comment period.

The March 21 interim final rule delays the implementation of: 1) three new EPMs, 2) a Cardiac Rehabilitation (CR) Incentive Payment model, and 3) modifications to the Comprehensive Care for Joint Replacement (CJR) model from July 1 to October 1. In the rule, CMS proposes to consider an additional delay in the program start date until January 2018.

CMS developed EPMs as part of a broader initiative to shift Medicare expenditures from volume to value. The EPMs are designed to incentivize providers to deliver higher quality cardiac and orthopedic care at a lower cost and are designed around three clinical conditions:

  • Acute Myocardial Infarction (AMI) model;

  • Coronary Artery Bypass Graft (CABG) model; and

  • Surgical Hip and Femur Fracture Treatment (SHFFT) model.

EPMs set a single spending target for all included healthcare services provided to a Medicare beneficiary during a clinical episode over a defined period of time. Episode spending is then reconciled against the target price in order to determine a provider’s losses or savings.

Participation in EPMs is mandatory for hospitals located in select Metropolitan Statistical Areas (MSAs). The AMI and CABG models will be implemented in 98 MSAs, which comprise approximately 1,120 hospitals. The SHFFT model will be implemented in the 67 CJR MSAs, which include approximately 860 hospitals. Hospitals face no downside risk for the 2017 and 2018 performance years. In subsequent years, total losses are subject to a cap.

In order to provide hospitals with adequate time to prepare for EPM implementation, as well as allow hospitals to implement improvements to the CJR model as soon as possible, the AAMC urges CMS to:

  • Delay the EPM start date from October 1, 2017, to January 1, 2018;

  • Delay the onset of mandatory downside risk until 2020;

  • Delay the onset of two-thirds regional target pricing until 2020;

  • Modify the effective date of changes to the CJR program from October 1 to July ; and

  • Maximize opportunities for providers to participate in an Advanced Alternative Payment Model (APM).

The AAMC’s comments note that delaying the program start date until January 2018 is critical in order to provide hospitals with more time to develop and implement strategies to improve clinical and financial performance under the EPMs.

Contact:

Lauren Kuenstner
Healthcare Payment Reform Specialist
Telephone: 202-741-5516
Email: lkuenstner@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org