The CFA Perspective

CMS Delays Cardiac Bundled Payment Model

Posted by John Meyer, FACHE

Mar 24, 2017 7:42:49 AM

CMS Delays Cardiac Bundle image.jpgThe Centers for Medicare and Medicaid Services announced on March 21st in the Federal Register the following news on the anticipated implementation of the mandatory cardiac bundled payment initiative:

  • Implementation, expected in July 1, 2017, has been delayed three months to October 1, 2017.
  • The publication of the final rule laying out the implementation of Comprehensive Care for Joint Replacement, the cardiac initiative and other bundled payment programs is postponed from March 21 to May 20, 2017.
  • CMS is seeking comments on the “appropriateness of the delay.”
  • The Cardiac Rehabilitation Incentive Payment Model has been postponed.
  • CMS is weighing the delay of implementation of all new bundled payment initiatives even further, until 2018.

Stated reasons for the delay include:

  • Giving more time for comments on pushing back the implementation date (now January 1, 2018) and feedback to better structure the program.
  • Provide adequate time for CMS to undertake new rule-making, comment periods and modification to proposed rules as may be required.
  • Provide additional preparation time for hospitals.
  • Ensure that hospitals have a clear understanding of the rules of participation.
  • Align implementation with the calendar year.

As everyone remembers, the new program was initially presented in April 2016 across 800 hospitals in 67 metropolitan areas, with Medicare proposing to pay providers a single payment to cover all costs associated with a defined episode of care covering 90-days (acute and post-acute).  This program was to be expanded to include heart attacks and coronary artery bypass surgery in 98 randomly-selected metropolitan areas beginning in July 2017 and ending December 31, 2021.  This was to be mandatory, not voluntary.

The Trump administration's move to delay these initiatives raises questions about the future of government efforts to usher healthcare out of fee-for-service operations and into a new age of value-based payment.  Such efforts were a hallmark of healthcare reform under the Obama administration, which set the goal of having half of traditional Medicare dollars go through alternative payment models by 2018.

There continues to be conjecture that mandatory bundling for select cardiac services will never occur ‒ at least on the part of the Federal government.  We will have to wait and see.  CFA believes that bundling will continue to be looked upon as an important payment methodology by both public and (increasingly) private payers, and that the fundamental building blocks of successful bundling need to be addressed by all hospitals in an effort to prepare for the inevitability of an increase in bundling payment models.  These models are complex and far-reaching in scope and will need hospitals to address their efforts towards physician commitment, team-building, care management, cost reduction and post-acute care network development in order to be successful.

Additionally, regardless of the ultimate outcome of bundled payment, the activities and preparations required will not be without reward ‒ the baseline capabilities critical to successful bundling (see https://www.charlesfrancassociates.com/blog/preparation-to-enter-the-cardiovascular-bundled-pricing-market) will be advantageous in continuing to enhance efficiency and quality of care.

As always, CFA welcomes your comments and suggestions.  Please contact CFA at (949) 443-4005 or by e-mail at cfa@charlesfrancassociates.com.

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