CMS Finalizes Rule with Major Changes for Several Bundled Payment Models

Last Updated: Nov 30, 2017


The Centers for Medicare and Medicaid Services (CMS) has finalized a rule cancelling the mandatory Episode Payment Models and Cardiac Rehabilitation Incentive Payment Model. Changes to the Comprehensive Care for Joint Replacement (CJR) Model have also been finalized.

Here's a look at how the changes impact Pennsylvania physicians and hospitals.

Changes to CJR Model

The CJR Model, which began on April 1, 2016, is now in its second performance year. Hospitals in 67 geographic regions were selected for mandatory participation in this model through Dec. 31, 2020.

The model tests bundled payment and quality measurement for an episode of care, with the goal of improving the coordination of patient care by hospitals, physicians, and post-acute care providers from initial hospitalization through recovery.

In its final rule, CMS has reduced the number of mandatory geographic areas participating in the CJR Model from 67 to 34, with an exception for low-volume and rural hospitals in the mandatory areas who would have the option of participating voluntarily. The model would also continue on a voluntary basis in the remaining 33 regions.

The CJR will remain mandatory for all the participating Pennsylvania geographic areas (with an exception for low-volume and rural hospitals, as noted above):

  • Harrisburg-Carlisle (Cumberland, Perry, and Dauphin Counties)
  • Pittsburgh (Allegheny, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland Counties)
  • Reading (Berks County)

Low-volume and rural hospitals in the mandatory regions, including some in Pennsylvania, can opt in during a voluntary election period during Jan. 1-31, 2018.

Cancellation of Episode Payment Models and Cardiac Rehabilitation Model

CMS is cancelling the Episode Payment Models and Cardiac Rehabilitation Incentive Payment Model. These models were scheduled to begin on Jan. 1, 2018.

Under the models, a hospital in which a patient is admitted for care for a heart attack, bypass surgery, or surgical hip/femur fracture treatment would have been accountable for cost and quality of care for Medicare fee-for-service beneficiaries during the inpatient stay and for 90 days after discharge. Hospitals would then have been paid a fixed price for each episode of care, and higher-quality care would have received a higher target price.

These are the Pennsylvania regions affected by the cancellation – Regions are marked "Yes" if they were selected to participate in a specific model and "No" if they were not:

  Surgical Hip and Femur Fracture Treatment Acute Myocardial Infarction Coronary Artery Bypass Graft Cardiac Rehabilitation Incentive Payment Model
Allentown, Bethlehem, Easton No Yes Yes Yes
Erie No Yes Yes No
Harrisburg-Carlisle Yes No No Yes
Pittsburgh Yes No No No
Reading Yes Yes Yes Yes
Scranton, Wilkes-Barre, Hazleton No No No Yes

According to a CMS press release, "Eliminating 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." CMS says that it expects to increase opportunities for providers to participate in voluntary initiatives as opposed to the large mandatory episode payment models.

Get CMS' Fact Sheet on the bundled payments final rule here.

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