Some of the strongest opposition to any implementation of the new mandatory models is coming from state hospital organizations.


May 11—The start of the latest Medicare mandatory bundled payment models was recently delayed for three months. That may be too late or too soon, depending on which hospital advocate you ask.

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 start 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, and a new cardiac rehabilitation incentive program (collectively known as episode payment models, or EPMs) 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 new models as needed. Among the issues on which the agency sought comment was the possibility of delaying the new models to Jan. 1, 2018.

Some hospitals, such as safety-net hospitals represented by America’s Essential Hospitals (AEH), urged pushing back the EPM models to Jan. 1. The longer delay is needed to give hospitals more time to find the funding for the necessary infrastructure, such as technology design, process redesign, and personnel changes, Bruce Siegel, MD, president and CEO of AEH, said in a comment letter to CMS.

The American Hospital Association (AHA) backed the delay to Jan. 1 but warned against any further delays.

“To do so would effectively turn the start date for these programs into a moving target—hospitals and health systems would continue to expend resources for something that we fear would never come to fruition,” Tom Nickels, executive vice president for AHA, wrote in a comment letter to CMS.

Meanwhile, Premier urged CMS to retain the Oct. 1 effective date of the EPMs but offer the option for hospitals to delay implementation until Jan. 1.

The Federation of American Hospitals (FAH) noted that its member hospitals have needed about 12 months to prepare for previous bundled payment programs. FAH thus urged delaying the EPM start until at least Jan. 1 or six months after the final rules are issued, whichever is later.

And HFMA urged an indefinite delay in the start of EPMs until key design issues are addressed. Those issues include the lack of risk adjustment, insufficient episode exclusions, and inadequate waivers from “antiquated” fraud-and-abuse regulations.

Individual hospitals and health systems also supported delay. For instance, the Catholic Health System Hospitals of Buffalo, which is already participating in CJR and is slated to join EPM, asked CMS to delay the start of the latter until the organization could analyze its first-year data from CJR, which began in July 2016.

“We remain supportive of healthcare freeform and population health, however we are concerned with the pace and need for this seemingly arbitrary change,” Michael Osborne, vice president of finance for the health system, wrote in a comment letter.

Similarly, the Hospital Corporation of America (HCA), one of the largest U.S. health systems, said it could support a Jan. 1 start date only if CMS established a dialogue with hospitals to improve the existing bundles, outcomes studies were performed on those models, and EPM hospitals were given at least a year to prepare.

However, any delay beyond Jan. 1 may prevent EPM and CJR Track 1 hospitals from obtaining advanced alternative payment model status for 2018 under the Medicare Access and CHIP Reauthorization Act of 2015, noted the Association of American Medical Colleges (AAMC).

Avoid a CJR Delay

Hospital advocacy organizations were more opposed to delaying the CJR expansion and regulatory changes to the existing CJR program.

For instance, AAMC said any delay beyond July 1 would “bar CJR participant hospitals from implementing necessary improvements to the program regarding beneficiary notification and gainsharing for an additional 6 months.”

HFMA supported delaying the effective date of finalized changes to the CJR model until Oct. 1 but urged CMS not to further postpone those changes.

One exception was FAH, which urged evaluation of hospitals’ CJR experiences “before even considering expanding that model.”

“Simply put, this is too fast and too soon,” wrote Charles Kahn III, president and CEO of FAH, which represents for-profit hospitals.

State-Level Opposition

The split among national hospital advocates over the appeal of the bundled payment program was not seen at the state level, where hospital associations broadly opposed the new mandatory bundles.

The Missouri Hospital Association (MHA) panned the new models and said CMS “treats the nation’s hospitals as ‘lab rats’ in the experimentation, with hospitals randomly assigned to implement components of a growing number of complex CMS initiatives.”

“CMS’s assignments and their unforeseen outcomes can affect a hospital’s ability to survive or thrive,” Daniel Landon, senior vice president of MHA, wrote to CMS.

Even the California Hospital Association (CHA), which has been in the vanguard of many CMS initiatives, opposed any expansion of CJR and urged delaying implementation of EPMs until CMS completes its final round of voluntary reporting by participants in the Bundled Payments for Care Improvement program.

“In short, California CJR hospitals have CMS regulatory fatigue and expressed frustration [at] CMS’ lack of understanding of the real-world, operational challenges this program presents,” Alyssa Keefe, a vice president for CHA, wrote to CMS.

Opposed to Mandatory Models

Hospitals used the comment period to express their continued opposition to mandatory participation for organizations in randomly selected areas.

For instance, Presbyterian Healthcare Services of New Mexico said the mandatory models “will force many providers who lack familiarity, experience, or proper infrastructure to support care redesign efforts into a bundled payment system.”

Mandatory models impede collaboration, affect patient safety, incentivize underutilization, and reduce access for the sickest patients, according to Aurora Health Care, a 15-hospital, not-for-profit integrated delivery network in Wisconsin.

“For instance, it is unfathomable yet conceivable under the mandatory CJR model that some hospitals may be forced to contemplate avoiding sending patients who have complicated medical problems and decreased probability of recovery to the SNF [skilled nursing facility] because they are more likely to lower the hospital’s performance scores,” wrote Patrick Falvey, PhD, executive vice president and chief transformation officer for Aurora.


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

Publication Date: Thursday, May 11, 2017