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Alert: Proposed CMS rule for coordinated cardiac and hip fracture care

CMS released yesterday that it plans to expand the CJR (Comprehensive Joint Replacement) bundled payment system to include not only additional hip and femur DRGs, but also AMI (Acute Myocardial Infarction) and CABG (Coronary Artery Bypass Graft) DRGs. This is an ongoing progress from CMS to shift Medicare payments from quantity to quality by creating strong incentives for hospitals to deliver better care at a lower cost. Just like with the CJR bundle, the risk will be phased in. The proposed changes (once finalized) are schedule to start in July 2017 and be phased in over 5 years which will end in 2021. The program will also be limited to 98 randomly selected metropolitan statistical areas (MSAs). Facilities not in these geographical areas would be exempt from participating. Just like with the original CJR model – CMS is proposing to allow hospital participants to enter into alternative and creative financial arrangements with acute and post acute care providers to ensure high-quality care during and after the hospitalization.

The new proposal contains three new significant additions:

  1. New bundled payment models for cardiac care and an extension of the existing bundled payment model for hip replacements to other hip surgeries;

  2. A new model to increase cardiac rehabilitation utilization; and

  3. A proposed pathway for physicians with significant participation in bundled payment models to qualify for payment incentives under the proposed Quality Payment Program

How will it work?

CMS has stated that under the proposed episode payment model, that any hospital encounter for which a patient is admitted for care for any of the following conditions below, the treating facility would be accountable for the cost and quality of care during the inpatient stay and for 90 days after discharge (including home health, rehabilitation and other post acute care needs).

  1. a heart attack (AMI)

  2. MS-DRG 280-282 OR

  3. any percutaneous coronary intervention procedure MS-DRGs 246-251 with an AMI primary or secondary ICD-10 diagnosis code

  4. coronary artery bypass surgery (CABG)

  5. MSDRGs 213-236

  6. surgical hip/femur fracture(SHFFT)

  7. MS-DRGs 480-482.

Specifically, once all the models are in effect after 5 years, participating hospitals would be paid a fixed target price for each care episode, with hospitals that deliver higher-quality care receiving a higher target price. At the end of each performance year all facility data would be analyzed and those facilities who are under-performing, would need to return money Medicare. Essentially CMS is attempting to pay more money to hospitals that deliver higher quality care.

How the bundled payment would work: An Example

Medicare has posed an example of how the program would work which includes assessing hospitals on quality based metric appropriate for each episode of care. These quality and performance measures have already been in place through voluntary data collection as well as required quality data reporting measures.

“Consider hospitals in model years 4 and 5 in a region where Medicare historically spent an average of $50,000 for each coronary bypass surgery patient, taking into account the costs of surgery as well as all related care provided in the 90 days after hospital discharge. Target prices would reflect the average historical pricing minus the discount rate based on quality performance and improvement.

  1. Hospital A is performing at the highest overall level on quality measures and its discount rate is 1.5 percent for the episode. As a result, its quality-adjusted target price for bypass surgery is $49,250 (or $50,000 minus the discount of $750). By taking measures to avoid readmissions and other unnecessary costs, Hospital A is able to reduce average total hospitalization and related 90-day post-discharge costs for bypass surgery patients to $48,000. Hospital A would be paid average savings of $1,250 per patient. 

  2. Hospital B in the same region also reduces its average costs to $48,000 per patient. However, it achieves only acceptable overall performance on quality measures. Its discount rate is 3 percent and its quality-adjusted target price is $48,500 (or $50,000 minus the discount of $1,500). Hospital B would be paid average savings of $500 per patient.

  3. Hospital C also only achieves acceptable performance on quality measures (discount rate of 3 percent) and has a quality-adjusted target price of $48,500. However, Hospital C has average costs of $50,000 per patient. If Hospital C is unable to improve its cost and/or quality performance, it would have to repay Medicare an average of $1,500 per patient.”

What are the quality measures that will be used?

  1. Heart attacks:

  2. Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Myocardial Infarction (AMI) Hospitalization (NQF #0230)

  3. Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction

  4. Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey (NQF #0166)

  5. Voluntary Hybrid Hospital 30-Day, All-Cause, Risk-Standardized Mortality eMeasure (NQF #2473) data submission

  6. Bypass surgery:

  7. Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft (CABG) Surgery (NQF #2558)

  8. HCAHPS Survey (NQF #0166)

  9. Hip/femur fractures (same measures as in the existing Comprehensive Care for Joint Replacement (CJR) model):

  10. Hospital-Level Risk-Standardized Complication Rate Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550)

  11. HCAHPS Survey (#0166)

  12. Voluntary Total Hip Arthroplasty (THA)/Total Knee Arthroplasty (TKA) Patient-Reported Outcome (PRO) and Limited Risk Variable data submission

Wait! There is more…

Yep, as if the reimbursement schemes were not intricate enough, there is more. CMS has proposed two new modifications, in addition to the above changes.

  1. Cardiac Rehabilitation Incentive Payment (CRIP) – Studies from entities such as the American Heart Association and American College of Cardiology have suggested that cardiac rehab can improve outcomes. As such,  CMS plans to incentivize use of cardiac rehabilitation programs.This two part incentive payment would be paid retrospectively based upon the total cardiac rehabilitation use by beneficiaries that are attributed to participating hospitals.

  2. The initial payment would be $25 per cardiac rehabilitation service for each of the first 11 services paid for by Medicare during the care period for a heart attack or bypass surgery.

  3. After 11 services are paid for by Medicare for a beneficiary, the payment would increase to $175 per service paid for by Medicare during the care period for a heart attack or bypass surgery.

  4. Based on Medicare coverage, the number of cardiac rehabilitation program sessions would be limited to a maximum of two one-hour sessions per day for up to 36 sessions over up to 36 weeks, with the option for an additional 36 sessions over an extended period of time if approved by the Medicare Administrative Contractor. Intensive cardiac rehabilitation program sessions would be limited to 72 one-hour sessions, up to six sessions per day, over a period of up to 18 weeks.

  5. Advanced Alternative Payment Models (APMs) – CMS is proposing that physicians who participate in bundled payment models may qualify for financial rewards through the proposed Quality Payment Program (aka MACRA).

There are many changes underway, and it is imperative that everyone who cares about quality patient care take the time to read, become familiar and get involved in providing feedback on these new rules. The proposed rule can be viewed at and is anticipated to display at on July 26, 2016. Please plan to provide feedback on the proposals. Comments are due 60 days after the proposed rule publishes in the Federal Register.

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