Some expect the Trump administration to respond to concerns about a multitude of overlapping payment models by transferring more authority to the regional level.


April 27—A recent Trump administration decision to delay the start of the latest mandatory bundled payment program spawned speculation that such models are on their way out. But leading policy watchers are divided on whether that will happen.

The Centers for Medicare & Medicaid Services (CMS) on March 20 issued an interim final rule with comment period that delayed both the effective date of a rule governing the bundled payment models and the starting date of the models. The start of an expansion of the Comprehensive Care for Joint Replacement (CJR) model and new bundled payment models for heart attack, cardiac bypass surgery services, and a new cardiac rehabilitation incentive program (collectively known as episode payment models) was pushed back from July 1 to Oct. 1.

CMS said the delay would allow for additional notice and feedback so it could tweak the program as needed. Among the issues on which the agency sought comment was the possibility of delaying the new models to Jan. 1, 2018.

The initial delay was seen by some as particularly significant because it followed previous criticism of mandatory models by Tom Price, secretary of the U.S. Department of Health and Human Services (HHS).

A Jan. 1 start date was backed by the American Hospital Association—after it previous opposed mandatory models—in a recent comment letter submitted to CMS.

Jeff Micklos, executive director of the Health Care Transformation Task Force, said this week he would bet that mandatory models are “probably off the table.”

However, Gail Wilensky, former administrator of the precursor agency to CMS, said she viewed Price’s objection as a member of Congress last year as stemming from concern over imposing on congressional authority, rather than from opposition to mandatory bundles.

“It’s not obvious that [the issue] was what was done as much as how it was done,” Wilensky said at the annual meeting of the Network for Excellence in Health Innovation in Washington, D.C.

She noted that Price and other Republicans were strong supporters of the value-based payment shift under Medicare Advantage and the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

The advantage of mandatory models is their potential to avoid selection bias, meaning participation by only the most willing and able providers. But Wilensky said there are other ways to address that concern, such as use of mandatory bundling in a “very small, limited area.”

“I’m less overwhelmed that the world stops if we don’t have mandatory bundling,” Wilensky said.

Micklos said the true indication of the administration’s view of mandatory models will be whether it curtails the CJR model, which started in the summer of 2016 and was the first mandatory Medicare model.

“It’s easier to stop a rule that has not yet gone into effect as opposed to reopening something that people have been working on for a while,” Micklos said.

Micklos said the bundles may be needed to move most providers toward full risk given that “there is some real concern about people who seem to be remaining for extended periods of time in the Medicare Shared Savings Program Track 1,” which carries no downside risk.

Regardless of what happens to mandatory bundled payment models, industry watchers expect a big increase in the use of bundled payments from the expected extension in 2018 of some version of the voluntary Bundled Payments for Care Improvement program.

“I think this is really about accountability,” said Elizabeth Mitchell president and CEO of the Network for Regional Healthcare Improvement. “Those points of accountability can come from multiple sources; whether there are mandatory bundles or not, this has to happen.”  

Future Directions

Wilensky pushed for moving away from pilots and toward broad-based payment changes by CMS.

“At least one of the reasons that we are frequently seeing such little impact from various pilot projects is because they are stepping on each other’s toes,” Wilensky said. “Pilots really ought to help us make some choices about what seems to have the most impact.”

A streamlining of payment and delivery reform initiatives is needed, others agreed.

“Right now, the cacophony is maddening,” Mitchell said, referring to competing and overlapping data-tracking and reporting demands of different payment reform pilots. “It actually can be quite disruptive.”

Mitchell expected the Trump administration to respond to those concerns by delegating more authority to the regional level. However, still needed are broad standards for accountability, such as total-cost measurement, to provide flexibility in the models.

She expected the Trump administration to support adding more physician-led advanced alternative payment models (APMs) to Medicare, as authorized by MACRA. So far, the Physician-Focused Payment Model Technical Advisory Committee (PTAC) established by MACRA has accepted 24 letters of intent for such models, as well as seven full-fledged proposals.

PTAC Models

Some industry watchers have wondered whether the consideration of new APMs through PTAC—with approved models then going to the HHS secretary for authorization—will further complicate payment by flooding Medicare with hundreds of new payment models.

Micklos said the Trump administration’s stronger support for PTAC—as evidenced by Price’s recent address at a PTAC meeting—compared with the Obama administration’s support was a “positive signal” for incentivizing innovation among providers. However, he worried that the individual models from PTAC may run counter to efforts to move the health system toward more integration and coordination.

“One of the things we are watching very carefully is looking at different proposals where the models not only have merit on their own but can be synchronized together with other models to move the value agenda forward,” Micklos said.   

But Mitchell, who also is vice chair of the 11-member PTAC, said “there is probably a limited universe of models that will actually work.”

“I’m not going to take a bet on the number of models; it’s more than we have now, but it’s not unlimited,” she said.


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

Publication Date: Thursday, April 27, 2017