Newly Released CMS Payment Models – What is to Come?
Right before the inauguration of the new President, the Centers for Medicare & Medicaid Services (CMS) finalized new Innovation Center models. The announcement finalizes significant new policies related to: (1) cardiac care; three new payment models will support clinicians in providing care to patients who receive treatment for heart attacks, heart surgery to bypass blocked coronary arteries, or cardiac rehabilitation following a heart attack or heart surgery; (2) orthopedic care; one payment model will support clinicians in providing care to patients who receive surgery after a hip fracture, other than hip replacement; (3) CMS is finalizing updates to the Comprehensive Care for Joint Replacement Model, which began in April 2016.
CMS is also now offering an Accountable Care Organization opportunity for small practices. In the new Medicare ACO Track 1+ Model will have more limited downside risk than Tracks 2 or 3 of the Medicare Shared Savings Program in order to encourage more practices, especially small practices, to advance to performance-based risk. However, it is unclear how far these models will go as they were proposed before President Trump took office.
HHS Support and Mixed Industry Reaction
As reported by the Advisory Board, HHS said CMS offer education and training to help prepare and support providers in complying with the new payment models. CMS will offer webinars addressing each payment model and the criteria providers must meet to qualify for incentive payments under MACRA. CMS also will release fact sheets explaining how clinicians can successfully comply with the models and will host open forums where CMS staff will answer questions about the new payment models.
Industry reaction, however, was mixed. The American Medical Association (AMA) applauded the new payment models. AMA President Andrew Gurman in a statement said the group "supports CMS as it expands the models that can qualify as Advanced APMs" and "is working with the agency to expand opportunities for different specialties and practices to participate in innovative care models." He added, "We hope that CMS will continue to expand the list of Advanced APMs in the future so new delivery and payment arrangements can be supported and promoted—a win for physicians and patients alike."
In contrast, Tom Nickels, executive vice president for government relations and public policy at the American Hospital Association (AHA), in a statement said, "The bundled-payment model for cardiac care is the second mandatory demonstration project [CMS] has finalized in just the past 15 months," adding, "This is too much too soon." Nickels continued, "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." He said AHA will "continue to urge that any new bundled payment programs be of a voluntary nature."
The three Episode Payment Models (EPMs) include models for episodes of care surrounding an acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment excluding lower extremity joint replacement (SHFFT). Episodes in the new models begin with admissions for hospitalizations in inpatient hospitals, and extend 90 days post-hospital discharge. Once the models are fully in effect, participating hospitals will be paid a fixed target price for each care episode, with hospitals that deliver higher-quality care receiving a higher target price. The goal for the payment models are to improve the quality of care provided to beneficiaries in an applicable episode while reducing episode spending through financial accountability.
CMS selected the EPM episodes based on their clinical homogeneity, site-of-service, and Medical Severity Diagnosis-Related Group (MS-DRG) assignment considerations. However, the AMI, CABG, and SHFFT models differ from previous CMMI payment models in a few ways. The Lower Extremity Joint Replacement model, while the procedures are common among the Medicare population, the majority of such procedures are elective. In contrast, the patient population included in the finalized episodes are substantially different from the patient population in CJR episodes, due to the clinical nature of the cardiac and SHFFT episodes.
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 EPM episode following discharge from the initial hospitalization that begins the episode. Both the AMI and CABG model episodes primarily include beneficiaries with cardiovascular disease, a chronic condition which likely contributed to the acute events or procedures that initiate the episodes. Additionally, 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 EPM episode following discharge from the initial hospitalization that begins the episode.
Specifically, in CMS' Cardiac Rehabilitation (CR) incentive payment model, the agency will test the use of CR and intensive cardiac rehabilitation (ICR) services for beneficiaries hospitalized for treatment of an AMI or CABG for 90 days post-hospital discharge, where the beneficiary's overall care is paid under either an EPM or the Medicare Fee for Service program. CR incentive payments will be available to hospital participants in 45 geographic areas that were selected for the CABG and AMI EPMs and 45 geographic areas that were not selected for the EPM program, and it will cover the same period as the cardiac care EPMs.
Under this model, CMS will make standard Medicare payments to providers for CR/ICR services, with an additional retrospective payment to participant hospitals based on total CR service use by beneficiaries attributed to the hospital, subject to Medicare coverage limits. CMS will make an initial payment of $25 per CR/ICR service for each of the first 11 CR/ICR services paid for by Medicare during the care period; after 11 services, the per-service payment increases to $175. CMS estimates that 1,320 hospitals will participate in the CR Incentive Payment Model, and that the model's impact on Medicare spending could range between $29 million in net Medicare costs and $32 million in net Medicare savings from July 2017 through December 2024, depending on the change in utilization of CR/ICR services.
These new payment models, like the CJR model, require provider participation in selected geographic areas. The SHFFT model's 67 geographic areas are the same as the CJR's. The cardiac test is meant to apply to hospitals located in 98 metro areas of the nation, representing about a quarter of all these regions in the nation.
Participant hospitals in these selected geographic areas are all acute care hospitals paid under the Inpatient Prospective Payment System (IPPS) that are not concurrently participating in Models 2, 3, or 4 of the Innovation Center's Bundled Payment for Care Improvement (BPCI) initiative for AMI, CABG, or SHFFT episodes. Additionally, geographic areas where all-payer models under the Innovation Center are operating — Maryland and Vermont — are excluded. Hospitals paid under a reasonable cost methodology, such as critical access hospitals, also are excluded. Notably, 17 of the selected MSAs have also been selected to participate in the CJR demonstration.
Medicare ACO Track 1+ Model
In its Final Rule announcement, CMS also outlined the basic parameters of a new "Track 1+" option that it intends to offer within the MSSP program beginning in 2018. The summary indicates that CMS intends to call for applications during the regular MSSP cycle in 2017 and that Letters of Intent to Apply will be due in May 2017. The model will be open to Track One ACOs that are in the current agreement period as well as new MSSP applicants and Track One ACOs that are renewing their agreements. CMS also explains that ACOs will have the opportunity to join during the 2019 and 2020 application cycles.
The Track 1+ model is designed to qualify as an Advanced APM for purposes of QPP and incorporates downside risk at a rate significant enough to meet the nominal risk criteria but less aggressively than MSSP Tracks Two and Three. It incorporates the 50% maximum savings sharing rate included in the current Track One but also includes some benefits of Track Three, such as prospective beneficiary assignment, symmetrical savings and loss thresholds and waiver of the 3-day SNF rule.
It offers a fixed 30% loss sharing rate with a maximum loss limit at either 8 percent of ACO participant Medicare fee-for-service revenue (for ACOs that are physician-led or include small, rural hospitals); or 4 percent of the ACO's updated benchmark depending on the composition of the ACO (for other ACOs now in Track 1 or new or renewing ACOs). In later years, ACOs eligible for the lower sharing limit could opt for a higher percentage of revenue in 2019 and 2020. The CMS announcement includes few details beyond the basic parameters but indicates that additional information on the model will be forthcoming.
With these new alternative payment models, CMS continues to shift Medicare payments from traditional fee-for-service to value-based payments. The new payment models, including the Cardiac Care Model, the Cardiac Rehabilitation Incentive Payment Model and the expanded CJR, all qualify as Advanced Alternative Payment Models under MACRA, and thus present opportunities for clinicians who collaborate with participant hospitals to qualify for a five percent incentive payment.
Will Trump Dump the Models?
As reported, President-elect Donald Trump's choice to head the US Department of Health and Human Services (HHS) doesn't like Medicare experiments in which physicians, hospitals, and patients have no choice but to participate. That means four mandatory bundled payment models just approved by the Centers for Medicare & Medicaid Services (CMS) are on a collision course with the incoming Trump administration.
As we previously described, industry reaction to the CMS proposals was mixed. However, Perhaps the most significant protest from the ranks of medicine came from Donald Trump's pick for HHS secretary, Rep. Tom Price, MD, (R-GA), an orthopedic surgeon. In a September letter to CMS, Dr. Price as lead signatory and 178 other House members said that by proposing mandatory bundled payments, the Center for Medicare and Medicaid Innovation "has upset the balance of power between the legislative and executive branches." The new models don't represent limited, low-risk tests, as envisioned by the ACA, but sweeping changes that warrant Congressional say-so, the lawmakers argued. "Medicare providers and their patients are being forced into high-risk government-dictated reforms with unknown impacts." As Secretary of HHS Dr. Price could erase or rewrite the regulations for the mandatory bundled payments. He may also make them voluntary.