The CFA Perspective

Charles Franc

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CMS Final Rule Released Ending the Mandatory Cardiac Bundled Payment Initiative

Posted by Charles Franc

12/5/17 10:16 AM

CMS Final Rule Released Ending the Mandatory Cardiac Bundled Payment Initiative.jpgThe Centers for Medicare and Medicaid Services in a final rule released Thursday, November 30, 2017, closed the loop on its proposed cancellation of the cardiac bundled payment models.  Previously, CMS requested comments regarding new payment models from the Center for Medicare and Medicaid Innovation.  CFA posted an article on the CMS input request here on September 20, 2017.

In addition, CMS reduced the number of geographical areas participating in the bundled joint replacement model program from 67 to 34.  These CMS rule changes have been anticipated under the Trump Administration’s stated philosophy of supporting market-based solutions and encouraging more healthcare competition.  As such, the Trump Administration has opposed expansion of existing bundles and/or creation of new bundles, and any mandatory participation in bundled payments.

CMS Administrator Seema Verma said the agency anticipated announcing new voluntary payment bundles soon.  "While CMS continues to believe that bundled payment models offer opportunities to improve quality and care coordination while lowering spending, we believe that focusing on developing different bundled payment models and engaging more providers is the best way to drive health system change while minimizing burden and maintaining access to care," Verma said.  CMS has also stated that not pursuing these models gives CMS greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute care spectrum.

CMS stated it expects to develop new opportunities for providers to take part in voluntary initiatives rather than large mandatory bundled payment models as have been focused on in the past.

Breaking News:  Another Signal of the End of the Cardiac Bundled Pricing Initiative Era

Posted by Charles Franc

9/20/17 1:19 PM

Another Signal of the End of the Cardiac Bundled Pricing Initiative Era.jpgIn an article published in The Wall Street Journal on Tuesday, Sept. 19, by Seema Verna, the administrator of Centers for Medicare & Medicaid Services (CMS), stated the Trump Administration is planning to move the CMS Innovation Center in a direction to give providers more flexibility with new payment models and to increase healthcare competition.  Verma stated CMS is reviewing all Innovation Center models “to determine what is working and should continue, and what isn’t and shouldn’t.”

A key statement Verna made in the article is, “The complexity of many of the current models might have encouraged consolidation within the healthcare system, leading to fewer choices for patients. Strengthening Medicare and Medicaid will require health-care providers to compete for patients in a free and dynamic market, creating incentives to increase quality and reduce costs.”  Verma stated, “On Wednesday, we are issuing a ‘request for information’ to collect ideas on the path forward. We will move away from the assumption that Washington can engineer a more efficient healthcare system from afar—that we should specify the processes healthcare provider are required to follow.”

On the following day, Sept. 20, CMS published Centers for Medicare & Medicaid Services: Innovation Center New Direction.  In the background statement, CMS states, “One of the most important goals at CMS is fostering an affordable, accessible healthcare system that puts patients first. Through this informal Request for Information (RFI) the CMS Innovation Center (Innovation Center) is seeking your feedback on a new direction to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes. The Innovation Center welcomes stakeholder input on the ideas included here, on additional ideas and concepts, and on the future direction of the Innovation Center.”

In addition to the Request for Information (found here) seeking input from key healthcare stakeholders, CMS listed the eight areas of focus for new payment models they are interested in:

  1. Increased participation in Advanced Alternative Payment Models (APMs);
  2. Consumer-Directed Care & Market-Based Innovation Models;
  3. Physician Specialty Models;
  4. Prescription Drug Models;
  5. Medicare Advantage (MA) Innovation Models;
  6. State-Based and Local Innovation, including Medicaid-focused Models;
  7. Mental and Behavioral Health Models; and
  8. Program Integrity.

CFA encourages healthcare managers throughout the country to read and consider the CMS statement (link above) and the RFI request document by CMS.  This is a unique opportunity to provide experienced and practical input into the decision-making process of CMS for the future of payment models affecting nearly every provider.  The deadline for submitting comments and ideas is 11:59 PM EST, November 20, 2017.

As always, CFA invites your comments, suggestions and questions.  Please contact CFA at (949) 443-4005 or by e-mail at

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CFA is 21 Years Old!

Posted by Charles Franc

9/28/16 6:00 AM

CFA_21st-Anniversary-Logo.pngLooking back more than twenty-one years to when I first considered establishing Charles Franc & Associates, Inc. (CFA), it doesn’t really seem like more than two decades have passed.  Sure, we have grown as a firm from just one staff member (me) to a focused team of multispecialty cardiovascular services consulting professionals.  The number of consulting engagements and satisfied clients has steadily increased over the years, along with the opportunity for CFA to support increased access, enhanced clinical outcomes, and operational improvement in the field of cardiovascular services, both in the U.S. and in several foreign countries.  We have been privileged to work with many great organizations and fine individuals in the course of our consulting work and consider it an honor to have helped so many improve, expand and further develop their cardiovascular services.  For me, one very gratifying indicator of our success as a specialty healthcare consulting firm has been the large percentage of repeat or long term client relationships we have developed over the past two decades.

The field of cardiovascular medicine and the science and art of effectively managing a cardiovascular service line has been, and remains, a challenging and exciting environment.  It is characterized by monumental and ongoing clinical innovation – in the face of substantial changes in reimbursement for providing care, to both hospitals and physicians.  And, while there have been only three different U.S. Presidents during the last 21 years, it seems that the political climate – with its ramifications on the delivery of healthcare – is in a constant state of turmoil.  More than ever, the need to realize improved clinical quality outcomes and high levels of patient satisfaction, while closely managing the cost to deliver cardiovascular care, is front and center for cardiovascular managers, administrators and physicians.  The buzz words may change, but the underlying goals never do:  providing the best quality care, at the best price, in a highly competitive and ever-changing marketplace.

To best assist our clients with the challenges they face today as new technologies and payment initiatives drive changes, CFA continues to innovate and expand our consulting offerings to meet our clients’ evolving needs.  In addition to our specialized strategic, market, operational and management cardiovascular consulting services for hospitals, health systems and cardiovascular physician practices, we have added highly experienced, expert staff members in the following areas:

The CFA team encourages you to meet our new crew members  and take a few minutes to review the range of expanded cardiovascular consulting services we provide by visiting our website.  I am confident there is something our team of cardiovascular experts can do to help you and your cardiovascular program.

I would like to close with a warm thank you to all of our friends and clients, both current and past, who have selected the CFA team and trusted us with the responsibility to help them identify the best path to improvement, growth and success for their cardiovascular enterprise.

Here is to another 21 great years of helping to improve our field!


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A Simple Definition of “Value Equation”

Posted by Charles Franc

5/16/16 5:37 AM

A_Simple_Definition_of_Value_Equation_blog_image-690382-edited.jpgIt’s interesting how you sometimes casually read something and a statement pops off the page – a statement that clearly and succinctly describes a concept that is inherently complex or difficult to verbalize.  I was reading a Q&A session in the February 15, 2016 issue of Modern Healthcare with Marna Borgstrom, CEO of Yale-New Haven (CT) Health System (incidentally a past client of mine) discussing the challenge of being an academic medical center and the System’s approach to value-based care.  I would estimate that, up-to-now, there have been literally millions of words written about the so-called value equation – what it means, why it’s important, and how to go about achieving it.  I certainly know that it feels like I personally have read that many.  Admittedly, much of this discussion is confusing, contradictory, and laced with opinion, speculation and (understandably) author bias as well.

So when I read her statement, the little light bulb went off in my head.  Ms. Borgstrom stated:

“The numerator of value is making sure that we really get patient safety, the clear definition of clinical quality and the patient experience right.  The denominator is getting the cost/price point that people must pay for right.”

Admittedly, every word and phrase she used – patient safety, clear definition of clinical quality, patient experience, and cost/price – is subject to the same definitional, opinion and bias issues that are always present in such discussions, but I found the quote to not only be meaningful, but also succinct and even conceptually “elegant.”  It conjured up a picture in my mind of what “value” really is that I can understand and relate to, as well as use as my basis for discussing the concept with others.  Aren’t these attributes what define a good quote?  And further, isn’t it a good example of how a hospital system CEO should communicate a complex concept – simply, efficiently, elegantly, and most important, meaningfully?  I will concede that the real challenge is in the details, and the key is getting these complex concepts, as she correctly stated, “right.”  But that misses the point, which is the ability to communicate a complex concept in a simple, straightforward manner.

I certainly wish there were more good examples like this in the literature.  So often the inherent complexity of the healthcare system is compounded by inelegant and obfuscating language.

So, here’s a shout-out to Marna Borgstrom for furthering the discourse in an efficient and effective, even elegant, manner.  Thanks, Marna!

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As always, CFA welcomes your comments, suggestions and questions.

PARTNER II SAPIEN 3 Trial – TAVR Outperforms SAVR – Again!

Posted by Charles Franc

4/15/16 12:09 PM

PARTNER II SAPIEN 3 Trial – TAVR Outperforms SAVR – Again!

Edwards_TAVR_Image.pngThe one year results of the PARTNER II, SAPIEN 3 clinical trial for intermediate-risk patients with severe aortic stenosis were recently announced at the American College of Cardiology’s 65th Annual Scientific Session in Chicago.  The results are good news for patients with severe aortic stenosis who potentially require valve replacement surgery and are classified as “moderate risk” – approximately 20% of candidates.  Previous trials have concentrated on “high-risk” patients undergoing TAVR (transcatheter aortic valve replacement) in comparison to SAVR (surgical aortic valve replacement).


According to the study, intermediate-risk patients who received TAVR with the latest generation SAPIEN 3 device (Edwards Lifesciences) fared better after one year than patients receiving traditional SAVR.  TAVR produced superior outcomes for the study’s endpoints:  a combination of death, stroke and moderate or severe aortic insufficiency (i.e., leakage of blood across the replaced valve).

Study findings were announced by the Emory University School of Medicine and Vinod H. Thourani, MD, professor of surgery and medicine,[1] and published simultaneously in The Lancet.[2]  Dr. Thourani said, “This study shows the lowest mortality rate ever of any transcatheter valve platform after one year, which is very exciting for the management of aortic stenosis.  Taken together, these results demonstrate substantial improvements in outcomes among intermediate-risk patients receiving the SAPIEN 3 valve as compared in a propensity score analysis in intermediate-risk patients receiving surgery.”  Changes in both implantation techniques and improvements in the design of the valve itself have made the procedure both safer and easier to perform.

The study found that TAVR was superior to SAVR mortality, occurring in only 7.4% of TAVR patients versus 13.0% of patients receiving surgery.  The stroke rate was also lower with TAVR:  4.6% compared to 8.2% for surgical patients.

Because these results were in intermediate-risk, as opposed to high-risk patients, the previous FDA-approved target population for TAVR, a significant potential number of surgical candidates will eventually have a new procedural option for their care.  SAPIEN 3 was approved by the FDA in June 2015 for high-risk patients with severe, symptomatic aortic stenosis who are not candidates for open-heart valve replacement surgery; the valve is not yet fully approved for intermediate risk patients in the U.S.

Note that reimbursement is still an issue, especially with the average cost of TAVR devices being several thousand dollars more than surgical artificial aortic valves.  However, it is anticipated that the cost of the devices and of the procedures should go down over time as TAVR’s usage expands, as is typical of many new technologies.  The current value-conscious healthcare environment should also embrace TAVR as the cost drops, especially if this less invasive technique has the potential to become a short-stay or same-day outpatient procedure for select patients.

These findings, and the pending FDA approval of the device, should establish TAVR as the standard of care over the next few years and increase the number of patients with severe aortic stenosis who can successfully be treated with TAVR as opposed to traditional SAVR procedures.  If studies prove that less invasive procedures have as good or superior outcomes to open surgical procedures, the less invasive procedure will typically win out in the marketplace every time.  Also, it seems that this change may come much sooner than many predicted.  Good news for patients and hospital TAVR programs alike.

As always, CFA welcomes your comments, questions and suggestions.

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