CMS Proposes to Cancel Episode Payment Models, Cardiac Rehab Incentive Payment Model and Revise Comprehensive Care for Joint Replacement Incentive Payment Model

by King & Spalding

On August 15, 2017, CMS announced a proposed rule to cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model scheduled to begin January 1, 2018, and to rescind the regulations governing these models. CMS also proposed changes to certain aspects of the Comprehensive Care for Joint Replacement (CJR) model, including giving certain hospitals selected for participation in the CJR model a one-time option to choose whether to continue their participation in the model; technical refinements and clarifications for certain payment, reconciliation and quality provisions; and a change to increase the pool of eligible clinicians that qualify as affiliated practitioners under the Advanced Alternative Payment Model (APM) track.

These mandatory value-based payment demonstrations, developed by the CMS Innovation Center, were the source of controversy among hospitals, physicians, and other health providers who were concerned that the models would be burdensome to implement in the allotted time period and not appropriate for all practices that would be covered by their mandatory designs. King & Spalding previously covered the Final Rule for the CR Model and Orthopedic Bundled Payment Models here. CMS delayed implementation of the rule several times, and signaled that it was considering a change in policy with its March 2017 interim final rule. The proposed rule is likely to be received positively in the provider community.

Canceled Episode Payment Model (EPM) and Cardiac Rehabilitation (CR) Mandatory Demonstrations

CMS is proposing through this rule to cancel the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model, both of which would have launched in January 2018. The CR model was one of the primary components of the broader EPM program, in which CMS hoped to incentivize coordinated care delivery systems for cardiac care and hip replacement surgeries, which are common hospital procedures for the Medicare population. Under the CR payment model, hospitals would receive a bundled payment for patients that participated in certain cardiac rehabilitation programs within 90 days of being treated for an acute myocardial infarction (AMI) or coronary artery bypass graft (CABG) episode of care.

CMS stated that it was canceling the entire EPM model because it would not have enough time to restructure the model’s components before the anticipated effective date. CMS noted in its press release that “[e]liminating these models would give CMS greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute-care spectrum. ”  The agency seeks comment regarding other ways to incentivize providers for coordinated care in these clinical areas.

Restructured/Streamlined Comprehensive Care for Joint Replacement (CJR)

CMS has proposed to cut in half the number of Metropolitan Statistical Areas (MSAs) that would be required to participate in the CJR model, its remaining mandatory payment demonstration if finalized. In addition, the proposed rule would exclude all rural hospitals and identified low-volume hospitals (those with fewer than 20 joint replacements over three years) from mandatory participation in the model. Both rural hospitals and low-volume hospitals in the mandatory MSAs, as well as all hospitals in the remaining voluntary MSAs, could choose to continue participation in this demonstration during an established election period from January 1-31, 2018.

CMS previously announced that measures from this CJR model could be applied to the Advanced Alternative Payment Model (Advanced APM), which was authorized as one track of the CMS Quality Payment Program under MACRA last year. In the current rule, CMS has proposed to allow clinicians that support a participating hospital’s CJR model to be included in the hospital’s quality metrics, and is seeking comment regarding other changes to the model that would help incentivize participation. Lastly, CMS proposes several technical refinements and clarifications for certain CJR model payment, reconciliation, and quality provisions.

A copy of the proposed rule is available here. Public comments regarding this proposal must be submitted to CMS no later than October 16, 2017.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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