The Centers for Medicare & Medicaid Services (CMS) has announced proposals for three new “episode payment models” that, like the Comprehensive Care for Joint Replacement (CJR) model, would mandate provider participation in selected geographic areas. The episodes included in these payment models would address care for heart attacks, coronary artery bypass graft, and surgical hip/femur fracture treatment (excluding lower-extremity joint replacement). The performance period for these proposed episode payment models would begin July 1, 2017, giving hospitals and other providers a very short amount of time to prepare for these new payment methods. Comments are due October 3, 2016. Reed Smith is available to assist clients with preparation of comments or questions related to the proposed rule.

I. Overview Building on the current mandatory Comprehensive Care for Joint Replacement (CJR) bundled payment initiative, the Centers for Medicare & Medicaid Services (CMS) has announced ambitious and expansive proposals for three new “episode payment models” (EPMs) that, like the CJR model, would mandate provider participation in selected geographic areas. The episodes included in these EPMs address care for (1) heart attacks (acute myocardial infarction (AMI)), (2) coronary artery bypass graft (CABG), and (3) surgical hip/femur fracture treatment (SHFFT), excluding lower-extremity joint replacement (LEJR). As under the current CJR model, CMS proposes to provide a bundled payment to hospitals in selected geographic areas for an episode, covering all services provided during the inpatient admission through 90 days post-discharge. CMS proposes that the bundled payment be paid retrospectively through a reconciliation process; hospitals and other providers and suppliers would continue to submit claims and receive payment via the usual Medicare fee-for-service (FFS) payment systems, with the reconciliation occurring later. The proposal also includes provisions for episode-based gainsharing and alignment payments, as well as certain financial sharing and distribution arrangements among participants providing care. The performance period for these proposed EPMs would begin July 1, 2017, giving hospitals and other providers a very short amount of time to prepare for these new payment methods.