The Centers for Medicare & Medicaid Services (CMS) has officially cancelled a planned program to require certain hospitals to participate in Medicare episode payment models (EPMs) for acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment procedures furnished in designated areas of the country, along with a Cardiac Rehabilitation (CR) Incentive Payment Model. These programs, which were slated to launch on January 1, 2018, were summarized in previous posts. In a press release, CMS states that not pursuing these models gives it “greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute care spectrum.”

In the same rulemaking, CMS also dramatically scaled back the ongoing Comprehensive Care for Joint Replacement (CJR) model. By way of background, this program provides a “bundled” payment to participant hospitals for an “episode of care” for lower extremity joint replacement (LEJR) surgery, covering all services provided during the inpatient admission through 90 days post-discharge (with certain exceptions). The bundled payment is paid retrospectively through a reconciliation process; providers receive regular fee-for-service payments in the interim. The CJR model began April 1, 2016 and runs through 2020.

Most notably, the new rule gives certain hospitals participating in the CJR model a one-time option to choose whether to continue their participation in the model, effective February 1, 2018. This voluntary election option applies to hospitals in 33 of the 67 Metropolitan Statistical Areas (MSAs) selected in the original CJR final rule, along with low volume hospitals and rural hospitals in the remaining 34 mandatory participation MSAs. CMS is designating a one-time participation opt-in period from January 1 – 31, 2018 during which eligible hospitals may opt to continue to participate in CJR. Note, however, that CMS will automatically terminate CJR participation for hospitals in the designated 33 MSAs, along with low volume and rural hospitals, as of February 1, 2018, unless the hospital elects to continue participation in the CJR model. CMS expects the number of hospitals required to participate in CJR to fall from approximately 700 to about 370, and an additional 60 to 80 hospitals to make a voluntary election to continue participation. A list of all current CJR participant hospitals and their status (mandatory or voluntary) is available on the CJR webpage, as is the Voluntary Participation Election Letter Template.

CMS also adopted a number of refinements to CJR model policies, including the following.

  • CMS codified that it may take remedial action if a participant hospital or its collaborators, collaboration agents, or downstream collaboration agents fail to participate in “model‑related evaluation activities” conducted by CMS and/or its contractors. Presumably this could include providing access to documents and the like.
  • CMS established new “clinician engagement list” requirements that increase opportunities for eligible clinicians who are performing CJR model activities to be considered Qualifying Alternative Payment Model (APM) Participants under the Quality Payment Program.
  • CMS adopted its proposal to assign facility practice expense relative value units to the telehealth codes used in the CJR model.
  • CMS clarified that in the event of a reorganization involving a CJR model participant that results in a hospital with a new CMS Certification Number (CCN), CMS will perform separate reconciliation calculations for episodes that occur before and after the reorganization.
  • CMS adopted its proposal to use an amended composite quality score methodology during the “subsequent reconciliation calculation” for CJR performance year 1.

These changes are effective January 1, 2018.

In the preamble to the rule, CMS notes that it received numerous comments on the potential impact on the CJR program of a recent CMS decision to remove total knee arthroplasty (TKA) from the inpatient only list. Commenters expressed concern that if lower-cost cases move to the outpatient setting, CJR model hospitals will be left with the more costly/higher-acuity cases that are not appropriate for outpatient settings. Commenters warn that this would negatively impact CJR participants’ potential to meet their spending targets. CMS responded that because it did not propose changes to the CJR payment methodology and because there is no clinical experience or claims data yet to assess any impact of the TKA policy change on CJR target pricing, CMS will “consider all comments and address this issue through future rulemaking, as appropriate.” Separately, CMS discusses public comments on the agency’s request for suggestions on how to incentivize eligible hospitals to elect to continue participating in the CJR model and advance beneficiary care; CMS did not announce any related policy changes at this time.

Furthermore, CMS included an interim final rule with comment period to provide flexibility in determining episode costs for providers located in areas impacted by “extreme and uncontrollable circumstances,” such as recent wildfires and hurricanes. According to CMS, at least 113 CJR participant hospitals are located in areas affected by Hurricanes Irma, Harvey, and Nate, and at least 22 CJR participants are located in areas impacted by California wildfires. Under this provision, for participant hospitals that are located in an emergency area during an emergency period (as defined), CMS will cap actual episode payment at the target price: (1) for non-fracture episodes with a date of admission to the anchor hospitalization on or within 30 days before the date that the emergency period; and (2) for fracture episodes with a date of admission to the anchor hospitalization on or within 30 days before or after the date of the emergency period. This policy will apply to performance years 2 through 5. CMS will accept comments on this policy until January 30, 2018.

In announcing the proposed rule, CMS reaffirmed “that bundled payment models offer opportunities to improve quality and care coordination while lowering spending.” Nevertheless, CMS is now looking for ways “to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory bundled payment models.” In the preamble, CMS also cites its previously-announced “New Direction” for the CMS Innovation Center, under which “models will be designed to reduce burdensome requirements and unnecessary regulations to the extent possible to allow physicians and other providers to focus on providing high-quality healthcare to their patients.” CMS states that it expects to announce new voluntary payment bundle programs in the near future.