In December, the Centers for Medicare & Medicaid Services (CMS) issued a final rule (Final Rule) implementing new and revised episode payment models (EPMs) developed by the CMS Innovation Center. The Final Rule continues CMS’ transition of Medicare payment methodologies away from fee-for-service and towards value-based payments, including by incentivizing care coordination efforts and tying payments to quality improvement.
New EPMs: The Final Rule implements three new EPMs for episodes of care surrounding (i) acute myocardial infarction (AMI); (ii) coronary artery bypass graft (CABG); and (iii) surgical hip/femur fracture treatment excluding lower extremity joint replacement (SHFFT). Each episode of care encompasses a beneficiary’s inpatient stay as well as all related care within 90 days after discharge covered under Medicare Parts A and B. The initial performance year for the EPMs will start July 1 and expire December 31, 2017, and be followed by four successive performance years (2018-2021). Participation in the AMI and CABG EPMs will mandatory for acute care hospitals located in 98 randomly-selected metropolitan statistical areas (MSAs), and participation in the SHFFT EPM will be mandatory for hospitals in the 67 MSAs that currently participate in CMS’s comprehensive care for joint replacement model (CJR Model). The EPMs are designed to incorporate downside risk starting in 2019, but allow participants to assume downside risk in 2018 in order to qualify for potential incentive payments under the Medicare Access and CHIP Reauthorization Act (MACRA), by participating in an Advanced Alternative Payment Model.
CJR Model Revisions: The Final Rule makes a number of revisions to the CJR Model, including adding beneficiary protection requirements to the 3-day skilled nursing facility (SNF) waiver and to newly exclude beneficiaries prospectively assigned to an accountable care organization (ACO) in Track 3 of the Medicare Shared Savings Program (MSSP). The Final Rule also coordinates aspects of the CJR Model with other EPMs by updating rules regarding financial arrangements and beneficiary engagement incentives, compliance enforcement, appeals, and beneficiary notifications.
New Cardiac Rehabilitation Incentive Payment Model: The Final Rule establishes a new cardiac rehabilitation incentive payment model to increase Medicare beneficiary utilization of cardiac rehabilitation (CR) services. Under this model, participating hospitals will be eligible for incentive payments based on beneficiary utilization of CR services during the preceding performance year. CMS intends this model to complement the new AMI and CABG EPMs, as CR services can improve health outcomes but are significantly underutilized. Therefore, this model is being implemented in 45 MSAs that have also been selected for participation in the AMI and CABG EPMs, as well as 45 eligible MSAs not selected for participation in the new EPMs.