CMS: New Bundled Payment Model for Cardiac Care Beginning in 2018

July 26, 2016

The Centers for Medicare & Medicaid Services recently announced a mandatory bundled payments policy for cardiac care and rehabilitation of incentive payments under MACRA’s new alternative payment model beginning in 2018.

The announcement comes just days after CMS announced their Million Heart awards to support risk assessment and prevention of cardiovascular disease, which causes 1 in 3 deaths and results in over $300 billion in health care costs annually. In 2014, more than 200,000 Medicare beneficiaries needing heart attack treatment or bypass surgery were hospitalized costing Medicare over $6 billion.

“Having a heart attack or undergoing heart surgery is scary and stressful for patients and their families,” Health and Human Services Secretary Sylvia M. Burwell said in a press release. “Today’s proposal is an important step to improving the quality of care Americans receive and driving down costs. By focusing on episodes of care and rewarding successful recoveries, bundled payments encourage hospitals to coordinate care to achieve the best outcomes possible for patients.”
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Beginning on July 1, 2017, the proposed cardiac care policies would be phased over a five-year period in hospitals located in 98 randomly selected metropolitan areas representing roughly one-quarter of all metropolitan areas in the US.

Acting Principal Deputy Administrator for CMS, Patrick Conway, MD, stated that there will be no application process, making participation mandatory for the randomly selected hospitals.

Under the new rule, if a Medicare patient is admitted to a participating hospital for a heart attack or bypass surgery, the hospital will be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the inpatient stay as well as for 90 days after discharge. The new model for cardiac care accounts for medical as well as surgical services.

Upon full implementation of the new model, participating hospitals will be paid a fixed target price for each care episode. Hospitals delivering higher quality care will receive a higher target price.

The goal of the new bundled payment model is to improve quality of care as well as reduce the costs for Medicare beneficiaries who have a heart attack or undergo bypass surgery participating hospitals. Conway stated that current bundled care models have been successful at reducing costs and improving the quality of care for patients.

“Patients want the peace of mind of knowing they will receive high-quality, coordinated care from the minute they’re admitted to the hospital through their recovery,” Conway said in the press release. “The variation in cost and quality for the same surgery at different hospitals shows there are major opportunities for hospitals included in today’s models to reduce costs, improve care, and receive additional payments by improving patient outcomes.” -Julie Gould 



Centers for Medicare & Medicaid Services. Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR). Published July 2016. Accessed July 26, 2016. 

Department of Health & Human Services. Important Next Step towards a Better, Smarter, Healthier Medicare: New Payment Models and Rewards for Better Care at Lower Cost. Published July 2016. Accessed July 26, 2016.