One industry adviser warned that the start of recently delayed cardiac bundled payment models may be pushed back to mid-2018.


April 5—The Centers for Medicare & Medicaid Services (CMS) remains committed to shifting from fee-for-service payments to value-based payments, an agency leader reassured healthcare executives this week.

Kate Goodrich, MD, chief medical officer for CMS, told the National Quality Forum’s annual conference that the “move to value is still a strong priority at CMS.”

Goodrich noted that the recently confirmed healthcare leaders in the Trump administration—Tom Price, MD, secretary of the U.S. Department of Health and Human Services (HHS), and Seema Verma, administrator for CMS—have consistently spoken of the need to move from paying for volume to paying for value.

“It’s not a partisan issue,” Goodrich said.

Goodrich reiterated the goal of the previous HHS secretary, Sylvia Burwell, to move 30 percent of Medicare payments into alternative payment models by the end of 2016 and 50 percent by the end of 2018.

The reiteration of the value-based payment push drew praise from some policy watchers.

“It was very reassuring to hear Kate’s message of continuity,” said Dan Mendelson, president of Avalere Health. “But with that said, we also saw the delay of the cardiovascular bundles, and there is a secretary who—in the past at least—has said things about bundling that seem to contradict where the agency has gone in the past.”

Mendelson was referring to the three-month delay that the Trump administration announced in March for the start of Medicare’s next mandatory bundled payment programs, which are collectively known as episode payment models. In a September 2016 letter, Price and congressional colleagues stated that CMS had exceeded its powers in mandating bundled payments, which would take decisions out of the hands of physicians and patients.

Mendelson worried that the new bundled payment models could be further pushed back to mid-2018 as Price and other administration leaders get up to speed on their strategic value.

“And that could make it more difficult for institutions to adapt to the changes,” Mendelson said. “It’s important for hospitals in particular to have predictability about where the system is going and to have a commitment to implementing these changes more rapidly.”

He also echoed the concern of other healthcare advisers that the delay could signal a move away from mandatory bundled payment models. According to CMS, 860 hospitals are required to participate in the Comprehensive Care for Joint Replacement (CJR) model, which launched in April 2016 and was the first mandatory model. CJR hospitals next are required to implement the Surgical Hip and Femur Fracture Treatment model, and 1,120 other hospitals will be required to take part in the Acute Myocardial Infarction and the Coronary Artery Bypass Graft models, all of which are now scheduled to begin Oct. 1.

“Mandatory is a positive thing because it levels the playing field,” Mendelson said.

Hospital advocates have disagreed and urged CMS to move away from mandatory payment models.

“While it is important to test new payment models, hospitals should not be forced to participate in complicated new programs if the government has not already proven that they will benefit the patients we serve,” Tom Nickels, executive vice president for the American Hospital Association, said in a written statement when the rules for the latest models were released. “We will continue to urge that any new bundled payment programs be of a voluntary nature.”

A healthcare industry outlook released April 4 by Fitch Ratings concluded that high-cost providers, including acute care hospitals, are most at risk in 2017 as the industry increasingly looks to tie costs to medical outcomes.

“Fitch believes both political parties are philosophically aligned on the benefits of alternative payment models like the Medicare CJR bundle, so they are likely to continue in some form, although the role government will explicitly play is still up for debate,” Fitch analysts wrote.

MACRA Efforts

Regarding another major area of healthcare payment reform, Goodrich also said CMS is writing regulations for the second year of the Quality Payment Program (QPP) under the Medicare Access and CHIP Reauthorization Act (MACRA).

The American Hospital Association (AHA) has urged CMS to create a hospital-based reporting option as part of that coming MACRA rule, said Melissa Myers, senior associate director of policy for the American Hospital Association.

“Additionally, we have urged CMS to expand the definition of advanced alternative payment models to allow more physicians partnering on those models to qualify for incentives,” Myers said in emailed comments.

Coming APMs under MACRA include voluntary bundled payment models and a Track 1+ ACO, according to Goodrich.

She noted that QPP will change Medicare payments for about 600,000 clinicians.

“That number will go up after the third year because we’re able to bring more clinicians into the program according to the how the law was structured,” Goodrich said.

Most clinicians are expected to be paid in the early years under the Merit-Based Incentive Payment System (MIPS)—one of two MACRA payment tracks—which requires extensive quality reporting to avoid cuts of as much as 9 percent of total Medicare payments.

She acknowledged that small, rural practices are especially worried about their ability to meet MIPS quality-reporting requirements and avoid those cuts. But Goodrich was optimistic that MACRA grants, which began flowing this year to local assistance organizations, will help practices adapt.

Infection Control

Goodrich credited CMS’s “payment and improvement levers” for some of the reductions in hospital infection rates that have occurred in recent years.

“What we’ve seen over a five-year period is a really significant reduction in harm,” Goodrich said, referring to a 21 percent reduction in hospital-acquired conditions (HACs) that occurred from 2010 to 2015.

A total of 3.1 million fewer HACs occurred over those five years than would have occurred if rates had remained steady at the 2010 level. The preliminary 2015 rate was 115 HACs per 1,000 discharges, down from 145 per 1,000 in 2010.

The 2015 decline restarted a downward trend in HACs that appeared to stall in 2014 data.

An Agency for Healthcare Research and Quality report estimated that nearly 125,000 fewer patients died in hospitals from HACs and that approximately $28 billion in healthcare costs was saved due to the HAC reductions.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Wednesday, April 05, 2017