Hospital Impact: Everything you need to know about the new CMS cardiac bundled payment program

Heart monitor
Heart monitor.

Last month, the Centers for Medicare & Medicaid Services added treatment for acute myocardial infarctions (heart attacks) and coronary artery bypass graft surgeries (CABGs or bypass surgeries) to its Advancing Care through Episode Payment Models (bundled payment) program to further move the needle from pay-for-volume to pay-for-value.

Scheduled to take effect July 1, 2017 and to involve 98 randomly selected metropolitan service areas (rural areas will be excluded), this mandatory program will hold healthcare organizations accountable for the cost and quality of care of patients with these two diagnostic entities during the inpatient stay and 90 days post discharge.

CMS will chose quality metrics and cost targets based on historical risk- and severity-adjusted data and upon historical healthcare organization, regional and national data. There is a great deal of payment at risk that increases over time. For instance, over time the at-risk payments increase as follows:

July 2017: 5 percent upside risk; no downside risk

April 2018: 5 percent upside risk; 5 percent downside risk

July 2019: 10 percent upside risk; 10 percent downside risk

July 2020: 20 percent upside risk; 20 percent downside risk

Like in Medicare Shared Savings Programs for Accountable Care Organizations, organizations that do not meet a pre-defined critical threshold for quality measures will not be eligible for optimum upside payments and those that fall below a minimum threshold will not be eligible for any upside payments and will likely trigger downside risk.

Also, like the MSSPs, if the organization’s costs for these two cardiac entities exceed the benchmarked expectations, the hospital will likely experience downside risk in proportion to the budget deficits.

Another significant factor is that any organization that participates in any bundled payment program will be deemed to meet the qualifications of an advanced alternative payment model (APM) under the Medicare Access and CHIP Reauthorization Act (MACRA). This will potentially increase Medicare Part B payments of up to 5 percent effective 2019 (based upon 2017 performance data).

CMS is also interested in testing the value of cardiac rehabilitation services in the care of heart attacks and cardiac bypass procedures. Eligible participants include all organizations that participate in the mandatory cardiac bundles plus an additional 45 geographic areas.

The agency plans to offer an additional $25 reimbursement for the first 11 cardiac rehabilitation services given during each episode of care. Subsequent services will be reimbursed at a $175 per service rate. Reimbursed cardiac rehabilitation services will be capped at 36 (or one service per week for the first 36 weeks) but may be extended upon consent by CMS.

There is no question that CMS plans to continue its expansion of its Bundled Payment for Care Improvement (BPCI) program. This new cardiac bundle program, along with the existing bundled program for joint replacements, will provide more opportunities for organizations to develop the following core competencies:

  • Work closely with physicians and managers to standardize and streamline clinical, care, operational, and business processes in support of defined clinical conditions
  • Place both physicians and managers “at risk” for both quality and cost outcomes through more contemporary contract models
  • Develop accurate and timely clinical/business analytics to ensure real time reporting of key performance indicators (KPIs) necessary to optimize outcomes and reimbursement
  • Restrict the provision of high-risk complex clinical services to designated “centers of excellence,” where high volumes of high-quality/low-cost services can be supported and maintained

Since organizations in metropolitan areas will not know whether CMS will choose them to participate in this new cardiac bundle program, it is incumbent on all organizations to develop the core competencies necessary to excel under the new payment methodologies. This includes MACRA through its advanced alternative payment models or the merit based incentive payment program (MIPS). Preparation will allow organizations to excel and succeed under the new business models that are rapidly proliferating and expanding among all payers throughout the country.

Jon Burroughs, M.D., is president and CEO of The Burroughs Healthcare Consulting Network, Inc.