CMS Cancels Cardiac Bundled Payments, Cuts Back Joint Replacement Models

The Centers for Medicare & Medicaid Services (CMS) recently announced plans to cut back the amount of regions required to participate in the comprehensive joint replacement bundled payment model, and completely cancelled the cardiac bundled payment program. 

“Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals,” Seema Verma, MPH, administrator of the CMS, said in a press release. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”

Mandatory bundled payment models were established under the Affordable Care Act, in order to integrate care and reduce costs. Under the models, all providers within a spectrum of care for a given ailment are bundled together and receive one single payment based on the value of care.

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CMS plans to reduce the number of regions required to participate in the Comprehensive Care for Joint Replacement model, from 67 to 34. The plan will also allow the providers in the scaled back regions to continue participation on a voluntary basis. The CMS will also make participation voluntary for all low volume and rural hospitals in the mandatory regions, which will further reduce the amount of participation. 

CMS also announced that under the proposed rule it would completely cancel the Episode Payment Models and the Cardiac Rehabilitation incentive payment model. Both of these programs were scheduled to start on January 1, 2018. 

HHS Secretary Tom Price, MD, has been a vocal critic of bundled payment models. Last year he wrote a letter to Andy Slavitt, then acting administrator of the CMS, claiming that the programs are “experimenting with Americans’ health.”

“Until recently, the tests and models… were implemented as intended, on a voluntary, limited-scale basis where no state, health care provider, or health insurer had any obligation to participate,” Dr Price and other lawmakers wrote in the letter. “These mandatory models overhaul major payment systems, commandeer clinical decision making and dramatically alter the delivery of care.”

The agency claims that cutting these payment models will improve care coordination. However, critics have expressed doubt, suggesting that this move will ultimately cost Americans more for health care.

In a tweet, Mr Slavitt said that the decision by the CMS signals that the agency is “Moving health care back to fee for service,” and called the decision “Disappointing to those who want to see health care become quality and value-based.”

—David Costill