The Centers for Medicare & Medicaid Services recently proposed a new payment model that would bundle payment to acute care hospitals for heart attack and cardiac bypass surgery services. In 2014, more than 200,000 Medicare beneficiaries were hospitalized for heart attack treatment or underwent bypass surgery, costing Medicare over $6 billion. But the cost of treating patients varied by 50% across hospitals and the share of patients readmitted to the hospital within 30 days varied by more than 50%. And, patient experience also varied.
Under the new cardiac bundled payment model, the hospital in which the initial services are provided would be held accountable for the quality and costs of care for the entire episode of care from the time of the hospital stay through 90 days after discharge. This earmarks a major change in the financial responsibility of hospitals. The hospital would either earn a financial reward or be required to repay Medicare for a portion of the costs based on its performance on cost and quality for the episode. The proposed bundled payment models for cardiac care includes medical as well as surgical services, which will offer new information on how these models affect quality and costs.
“Under the new cardiac bundled payment model, the hospital in which the initial services are provided would be held accountable for the quality and costs of care for the entire episode of care from the time of the hospital stay through 90 days after discharge.”
The bundled payment would establish a two-part cardiac rehabilitation incentive payment based on the total cardiac rehabilitation use of beneficiaries attributable to participant hospitals. The cardiac rehabilitation incentive payment model would test the impact of providing an incentive payment to hospitals where beneficiaries are hospitalized for a heart attack or bypass surgery, which would be based on beneficiary utilization of cardiac rehabilitation and intensive cardiac rehabilitation services in the 90-day care period following hospital discharge. Hospitals may use this incentive payment to coordinate cardiac rehabilitation and support beneficiary adherence to the cardiac rehabilitation treatment plan to improve cardiovascular fitness. Currently, only 15% of heart attack patients receive cardiac rehabilitation, even though completing a rehabilitation program can lower the risk of a second heart attack or death. Patients who receive cardiac rehabilitation are assigned a team of healthcare professionals such as cardiologists, dietitians, and physical therapists to help the patient recover and regain cardiovascular fitness.
|The Measures of Care Coordination Include:
CMS proposes establishing a two-part cardiac rehabilitation incentive payment that would be paid retrospectively based on the total cardiac rehabilitation use of beneficiaries attributable to participant hospitals:
1. 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.
2. 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.
The cardiac model would be mandatory for hospitals in 98 geographic areas across the country. The models would begin in July 2017. The proposed rule seeks to increase coordination of care and decrease costs for heart attack and bypass surgery patients.
Quality Metrics To Each Episode
Hospitals would be assessed based on quality metrics appropriate to each episode, using performance and improvement on required measures that are already used in other CMS programs and submission of voluntary data for other quality measures in development or implementation testing:
- Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Myocardial Infarction (AMI) Hospitalization (NQF #0230)
- Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction
- Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey (NQF #0166)
- Voluntary Hybrid Hospital 30-Day, All-Cause, Risk-Standardized Mortality eMeasure (NQF #2473) data submission
- Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft (CABG) Surgery (NQF #2558)
- HCAHPS Survey (NQF #0166)
These new models support the Administration’s goal to have 50 percent of traditional Medicare payments flowing through alternative payment models by 2018 (already, 30 percent of Medicare payments go through alternative models). But, there is more to understand about the significance of the proposed ruling:
1. This is CMS’ second round of mandatory bundled payment arrangements.
CMS is quickly expanding value-based payments, with the goal of 50% of all payments tied to Alternative Payment Models (APM)s by the end of 2018. The agency is also showing a pattern of shifting bundled payments from voluntary-to-mandatory participation when there is compelling financial reasons or data to do so, as evidenced by the previously-announced CJR Model and the newly-announced cardiac care bundled payments.
2. CMS is expanding Episode Payment Models (EPMs) into chronic health conditions.
In the announcement CMS notes that chronic conditions which result in hospitalizations, regardless of the reason for the hospitalization, often represent a common pathway that includes failure of outpatient care management and care coordination for the beneficiary with that chronic condition. Bundled payments tend to be associated with a clear beginning and end for an acute episode of care, such as a surgical procedure, but with this cardiac care bundle we’re seeing CMS apply an EPM to a chronic condition through the use of cardiac rehabilitation services. Beginning on p. 39 of the proposed rule, Medicare notes that despite evidence from multiple studies that Cardiac Rehabilitation (CR) services improving outcomes, only 35% of acute myocardial infarction patients 50 or older receive this indicated treatment. CMS is sending a clear message that evidence-based CR services are essential in keeping patients out of the hospital.
3. Physicians now have a pathway to receive qualification as Advanced Alternative Payment Models (APMs) through the proposed Quality Payment Program in MACRA.
This proposed pathway would allow for the newly announced bundles as well as other Medicare bundled payment models to qualify as Advanced APMs as they meet nominal risk criteria, use required quality measures, and implement a certified EHR. This is a change from the proposed MACRA rule, where CJR did not qualify as an Advanced APM, and illustrates that CMS endorses bundled payments as effective models in bringing about care transformation.
4. Care coordination continues to be a high priority.
CMS proposes allowing participating hospitals to enter into financial arrangements with other providers and participants of the Medicare Shared Savings Program Accountable Care Organizations (MSSP ACOs). Medicare is similarly giving a clear signal of its strong endorsement of care coordination as evidence in the upfront payments for care coordination in Comprehensive Primary Care Plus (CPC+ and Oncology Care Model (OCM) programs. (Leavitt 2016)
Providers who develop robust care coordination systems stand a better chance to thrive in a value-based payment environment.
Phased Implementation For Cardiac Bundled Payment
Recognizing that hospitals will need time to adapt to the new models and establish processes to coordinate care, the proposed rule includes a number of measures to ease the transition, including gradually phasing-in risk.
|Downside risk (possible repayments to Medicare) would be phased in:||Gains (payments from Medicare to hospitals) would be phased in:|
|July 2017 – March 2018 (performance year 1 and quarter 1 of performance year 2): No repayment;||July 2017 – December 2018 (performance years 1 and 2): Capped at 5 percent;|
|April 2018 – December 2018(quarters 2 through 4 of performance year 2): Capped at 5 percent;||2019 (performance year 3): Capped at 10 percent; and|
|2019 (performance year 3): Capped at 10 percent; and||2020 – 2021 (performance years 4 and 5): Capped at 20 percent.|
|2020 – 2021 (performance years 4 and 5): Capped at 20 percent.||The first performance period would run from July 1, 2017 to December 31, 2017. The second through fifth performance periods would align with calendar years 2018 through 2021.|
Coordination Of Providers To Lower Costs
Research has shown that bundled payments can support providers – hospitals, physicians, post-acute care providers, and other clinicians – in working closely together to provide better care at lower cost. For example:
- The Medicare Acute Care Episode demonstration tested bundled payments for cardiovascular and orthopedic care. Participating hospitals and physicians achieved savings for Medicare while at least maintaining quality of care.
- In the 1990s, Medicare tested bundled payments for bypass surgery through the Medicare Participating Heart Bypass Center Demonstration. The evaluation concluded that the bundles successfully incentivized physicians and hospitals to work together to provide services more efficiently, improve quality, and reduce costs.
- In a bundled payment program at a private hospital system, bundled payments for bypass surgery led to reduced readmissions, shorter hospitals stays, reduced in-hospital mortality, and lower costs.
- States are also experimenting with bundled payment approaches. For example, Arkansas has adopted bundled payments within its Medicaid program and is finding reductions in readmission rates.
- Thousands of providers have participated or are participating in the Centers for Medicare & Medicaid Services (CMS) Bundled Payments for Care Improvement initiative, including thousands of physicians participating in cardiac and orthopedic bundles. While only preliminary results are available, they add to the evidence that bundled payments in these areas encourage care coordination and can reduce costs.
Collaboration With Other Providers
One of the major goals of bundled payments is to encourage coordination among all providers involved in a patient’s care: for example, collaboration between hospitals and physicians and skilled nursing facilities. Therefore, as in the CJR model, CMS is proposing to allow hospital participants to enter into financial arrangements with other types of providers (for example, skilled nursing facilities and physicians), as well as with Medicare Shared Savings Program Accountable Care Organizations (ACOs). Those arrangements would allow hospital participants to share reconciliation payments, internal cost savings, and the responsibility for repayment to Medicare with other providers and entities who choose to enter into these arrangements, subject to the limitations outlined in the proposed rule.
Remington’s Key Takeaways:
1. Develop evidence-based cardiac rehabilitation models that help improve the health and well-being of patients who have heart problems to include exercise training, education on heart healthy living, and counseling to reduce stress and help you return to an active life.
2. Use patient engagement tools to monitor patients at a higher risk for a readmission.
3. Reexamine your organization’s care transition model.
4. Integrate remote monitoring technology to provide real-time information.
5. Develop a patient population model specific to cardiac.
6. Implement data analytics to support better outcomes and communications with ACOs, hospitals, payers and physicians.
Lisa Remington is president of the Remington Health Strategy Group and publisher of the Remington Report magazine and has worked with more than 6,000 organizations in both a consultancy role and educator. Lisa monitors the complex key trends and forces of change to develop a correct strategic approach to de-risk decision-making and create sustainable futures across the healthcare continuum.