CMS puts an end to mandatory cardiac, hip fracture bundled payment models

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CMS says the changes will offer hospitals greater flexibility and choice in how they provide care to Medicare patients.

Although Tom Price no longer heads up the Department of Health and Human Services, one of his pet projects just made it to the finish line. The federal government will no longer mandate that providers participate in bundled payment models for hip fractures and cardiac care.

The programs were delayed twice during Price’s tenure and were supposed to take effect January 1, 2018.

RELATED: HHS makes move to put an end to mandatory bundled payment models

But this morning the Centers for Medicare & Medicaid Services announced it officially canceled mandatory hip fracture and cardiac bundled payment models, as well as episode payment models and cardiac rehabilitation incentive payment models, and finalized changes to the comprehensive care for joint replacement model.

The final rule will be published Friday in the Federal Register.

The changes, CMS said in the announcement, will offer hospitals greater flexibility and choice in how they provide care to Medicare patients.

“While CMS continues to believe that bundled payment models offer opportunities to improve quality and care coordination while lowering spending, we believe that focusing on developing different bundled payment models and engaging more providers is the best way to drive health system change while minimizing burden and maintaining access to care,” CMS Administrator Seema Verma said in the announcement. “We anticipate announcing new voluntary payment bundles soon.”

Bundled payment models pay multiple providers with a single lump-sum payment for a complete episode of care. The Obama administration wanted to expand the programs from voluntary to mandatory in order to transition away from fee-to-service to value-based care. Price was a vocal critic of mandatory programs while a congressman and believed CMS overstepped its bounds by making them a requirement because they take decisions away from patients and physicians. The American Hospital Association also pushed to make the bundled programs voluntary.

RELATED: Humana study: Physicians warm to value-based pay models, but skepticism runs deep

Although some experts believe the agency’s decision to roll back mandated programs hurts the movement from volume to value, Roy Beveridge, M.D., Humana’s chief medical officer and senior vice president, said at a news briefing yesterday that the industry move to value-based care is a smart strategy for the private sector.

RELATED: Pay-for-performance program failures raise doubts about future success of MIPS

Physicians remain skeptical. A new study determined Medicare’s Value-Based Payment Modifier Program, which was designed to improve value by paying doctors who perform better on measures of quality and spending, was a failure, and, in fact, likely exacerbated disparities in delivery. The payment system inadvertently shifted money away from doctors who treated sicker, poorer patients to pay bonuses that rewarded practices that treated richer, healthier patients, said researchers, noting the findings cast doubt on the future success of the Merit-based Incentive Payment System (MIPS), which has the same basic design.

In addition to ending the mandatory programs, the final rule reduces the number of mandatory geographic areas that participate in the joint replacement model from 67 to 34. CMS will also make participation voluntary for all low-volume and rural hospitals that participate in the model in all 67 geographic areas.

CMS also issued an interim final rule and is seeking comment on a final policy that would provide flexibility in determining episode costs for hospitals located in areas impacted by extreme and uncontrollable circumstances, such as the major hurricanes that hit several states and Puerto Rico in 2017.