Industry advisers are watching for possible further regulatory action on mandatory bundled payment models by March 21.

Feb. 22—Some provisions of Medicare’s first mandatory bundled payment model were recently delayed, but federal officials say new mandatory models still will launch in July.

The Centers for Medicare & Medicaid Services (CMS) recently issued an announcement that application of some early provisions of the Comprehensive Care for Joint Replacement (CJR) model will be delayed from Feb. 18 to March 21.

But the delay did not impact the CJR expansion model—called the Surgical Hip and Femur Fracture Treatment (SHFFT) model—or the Acute Myocardial Infarction (AMI) and the Coronary Artery Bypass Graft (CABG) models, all of which begin July 1, CMS officials said in a Feb. 22 conference call, according to industry participants.

The delayed CJR provisions include a requirement for participating hospitals to have physicians deliver a written notice to beneficiaries describing their participation in the CJR program, advisers said.

“It’s seemingly small, technical specs that were impacted by the memorandum, and even those delays were not significant,” Brian Fuller, vice president for value-based care for naviHealth, said in an interview.

According to CMS, 860 hospitals are participating in CJR, which launched in April 2016 and places hospitals at risk for all Medicare spending associated with hip and knee replacements and any charges within 90 days of discharge.

The delay stemmed from a January memorandum issued by the White House that required 60-day postponements for further review of any published rule that had not yet taken effect.

Closely Watched

Hospital executives and industry observers are closely watching CMS for any signs of delays in the coming mandatory models, with the SHFFT model scheduled to launch at existing CJR hospitals and the other two models slated for 1,120 other hospitals, including some CJR hospitals.

Concerns about a possible delay or elimination of the mandatory models stems from criticisms by the newly confirmed secretary of the U.S. Department of Health and Human Services (HHS), Tom Price, MD.

“Secretary Price in the past was very vocal in his objection toward mandatory bundles, so it’s pretty reasonable to deduce that the new administration might have disrupted them—but all of the indications that have been publicly put out so far…attest to the fact that the plan is to move forward with implementation,” said Andrew Mancuso, a principal at Sg2, a subsidiary of Vizient.

In December, Tom Nickels, executive vice president for the American Hospital Association (AHA), said the AMI and CABG models were “too much, too soon.”

“We will continue to urge that any new bundled payment programs be of a voluntary nature,” Nickels said in a written statement.

Healthcare Leaders for Accountable Innovation in Medicare, a coalition of healthcare organizations that includes the Federation of American Hospitals, wrote Price this month that “participation in model tests must be voluntary.”

Also adding uncertainty is that the Senate has not yet confirmed Seema Verma, who President Trump nominated as administrator of CMS

“It’s important to note that we haven’t made our way through all of the confirmations, so until everyone is in place there is some uncertainty about whether the models will go forward as planned or whether they will be delayed or pulled back altogether,” Fuller said.

Although the recent delay was credited to the January executive order, some industry advisers found it noteworthy that it occurred shortly after Price’s arrival at HHS. They are watching for further rulemaking or formal confirmation regarding the new models by March 21, the end of the 60-day time frame in the executive order.

“You would expect any changes to be made on a rapid timetable,” said Eric Cragun, a senior director for the Advisory Board.

Industry advisers also are watching for the effect of another executive order, which required that “for every one new regulation issued, at least two prior regulations be identified for elimination.” It is unknown, for instance, whether that requirement will impact an expected proposed rule implementing a new, as-yet-unspecified voluntary bundled payment model in 2018.

Preparation Continues

Hospitals required to participate in the new models have taken “somewhat of a wait-and-see approach,” Mancuso said, as they await both formal confirmation that the models will continue and historical data from CMS on their past performance—against which they will be graded in the new model. CMS officials said Wednesday they expect to issue that data in “mid-spring,” which would be similar to the timetable before CJR launched, according to industry participants.

Of the 98 geographic areas in the new models, 17 overlap with CJR markets. Mancuso said hospitals in those areas could have an advantage in their preparation, given that many lessons and much of the infrastructure are transferable.

“There are different doctors involved and different procedures, so you’re going to have to look at designing new care pathways for different procedures, but nonetheless you can leverage a lot of the infrastructure,” Mancuso said.

While they are awaiting the CMS data, hospitals in the new models should start discussing with their cardiac specialists how the new models will work and should implement best practices learned from any other bundles in which they have participated, Mancuso said.

“If you have a care navigation program, for example, where your nurses go out into the community or communicate with patients telephonically after they have left the hospital, you’re not going to build a whole new program for that,” Mancuso said. “You’re just going to add these other patient procedures into that program.”

Other preparatory steps hospitals are taking include curating a network of “high-performing” post-acute care (PAC) providers that they can work with in the models, said Rob Lazerow, a managing director for the Advisory Board.

Sending fewer patients to skilled nursing facilities (SNFs) and instead sending lower-acuity patients home with the assistance of home health agencies is a major cost-reduction strategy of hospitals in CJR, according to early analyses.

Hospitals are looking at whether PACs need additional resources or support, what systems to use to ensure the smooth hand-off of patients, and how they are managing discharge to ensure patients are directed to the most appropriate sites of care.

Hospitals are in “a wide variety of positions right now depending on how much focus they had invested there before the programs,” Lazerow said.

He noted that PAC strategies might continue to unfold throughout the first year of the new models, given that hospitals will have only upside risk during that time.

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

Publication Date: Wednesday, February 22, 2017