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CMS Proposes Cancellation of Episode Payment Models and Significant Changes to the Comprehensive Care for Joint Replacement Model

August 17, 2017—The Centers for Medicare and Medicaid Services (CMS) August 15 released a proposed rule entitled “Medicare Program; Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model (CJR)”. The rule proposes to: 1) eliminate the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model, and 2) reduce the number of metropolitan statistical areas (MSAs) required to participate in CJR. Comments on the proposed rule are due October 16.

Episode Payment Models

The EPMs were designed to incentivize providers to deliver higher quality cardiac and orthopedic care at a lower cost. The EPMs were 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.

Prior to the release of CMS’s proposed rule to cancel EPMs, they were scheduled to launch on January 1, 2018, and end December 31, 2021. Participation in EPMs was mandatory for hospitals located in select MSAs. The AMI and CABG Models were originally mandated in 98 MSAs comprising approximately 1,120 hospitals. The SHFFT model would be implemented in the 67 CJR MSAs, including approximately 860 hospitals.

Cardiac Rehab Incentive Payment Model

The Cardiac Rehab (CR) Incentive Payment Model was also scheduled to begin on January 1, 2018, and end on December 31, 2021. As designed, the CR Incentive Payment Model was originally mandated in 90 MSAs, 45 of which would also be AMI and CABG EPM MSAs. Providers in these 90 MSAs would have received $25 per CR service for the first 11 services, and $175 per service thereafter.

CMS’s cancellation of EPMs and the CR Incentive Payment Model signals that the administration is pursuing voluntary, rather than mandatory, payment models, such as BPCI 2.0.

Comprehensive Care for Joint Replacement Payment Model

The rule also includes significant changes to CJR. CMS proposes to reduce the number of MSAs required to participate in CJR from 67 to 34. Hospitals in the remaining 33 “voluntary” MSAs will be permitted to choose whether to continue to participate in the model. The list of voluntary MSAs can be found on page 26 of the rule.

In addition, low-volume hospitals (having fewer than 20 lower-extremity joint replacement (LEJR) episodes in total across the 3 historical years of data) in mandatory MSAs would no longer be required to participate. Rural hospitals would also be exempt from mandatory participation, although CMS is permitting rural hospitals to voluntarily opt into the program. Rural hospitals, low-volume hospitals, and hospitals located in voluntary MSAs that elect to remain in CJR must notify CMS in writing by January 31, 2018.

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