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.”

Cardiac Rehab

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:

  • Transitions of care
  • Preventable emergency department visits
  • Potentially avoidable hospitalizations
  • Integration of medication information
  • Use of electronic health records


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:

Heart attacks:

  • 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

Bypass surgery:

  • 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.

Print Friendly, PDF & Email