Pending regulatory review, CMS has proposed cancelling the cardiac and expanded joint replacement bundled payment models. The rule, which was sent to the Office of Management and Budget last week, would cancel the mandatory bundled payment programs for acute MI and coronary bypass graft surgeries (Source).
Also under consideration for cancellation is the expansion of the existing Comprehensive Care for Joint Replacement model to include surgical treatments for hip and femur fractures. Those bundled payment initiatives have already been delayed twice and were currently slated to take effect Jan. 1, 2018.
The handwriting was on the wall, and now it seems that the decision has been made. Did the mandatory nature of the model kill it, or was it the sum total of philosophical, political and practical factors that did it in? We probably will never know.
It is well known that Dr. Tom Price, Secretary of HHS, has publically stated that he, as a physician, favors a different approach than has been taken by CMS in the past. That favored approach is market-based, voluntary, physician-friendly and patient-centered, rather than top-down, mandatory and, some would say, less physician and patient-centric. While improving cost and quality are always drivers of excellence and at the center of all regulatory and innovative concerns, the current CMS will approach those two interrelated goals by giving incentives and policy support for market driven, physician-innovation approaches, rather than the top-down approach of the past administration.
We need to adopt a cautious, wait-and-see position with Medicare, based on the multiple delays of these incentives during the current and previous administration as well as significant push back from physicians and providers during the public comment period in 2017. This coupled with the public policy statements made by Dr. Price, and private payers as well, suggest another change is coming.
Forward thinking, innovative hospital cardiovascular programs need to study the episode of care and bundled pricing models for operational and financial clues relative to enhancing their ability to perform under any payment model. Medicare may not be on board yet, but other payers might follow, and/or be receptive to hospitals prepared to offer these bundled price/episode of care packages as options. Either way providers who commit to innovation and metrics-driven performance improvement initiatives that result in better care at a lower price will always be ahead of the curve!
Given this news, many hospitals will breathe a sigh of relief, take a deep breath, and keep their eyes open for the next round of news on this topic. Those who believe that bundled pricing will return to favor, in some form or another, by some payer or another, need to put pricing/packaging models back on the to-do-list. Maybe not at the top, but certainly keep it on the list for the foreseeable future.