Proposed rules outlining a successor to the popular BPCI program are expected very soon, according to industry advisers.

Dec. 1—Medicare recently issued a final rule that drastically scaled back its use of mandatory bundled payments. Now providers are preparing for a new round of voluntary, hospital-led bundles.

The Centers for Medicare & Medicaid Services (CMS) followed through on an August proposal to cancel mandatory bundled payment programs for cardiac care and surgical hip and femur fracture treatment (collectively known as episode payment models [EPMs]). The agency also canceled the cardiac rehabilitation (CR) incentive payment model.

The mandatory models were scheduled to start Jan. 1, 2018.

Nearly two years into the Comprehensive Care for Joint Replacement (CJR) model, CMS also finalized plans to switch participation from mandatory to voluntary for hospitals in 33 of the 67 selected geographic areas. Hospitals in 34 high-cost areas still must participate unless they meet CMS designations as “rural” or “low-volume.” All 34 geographic areas where hospitals still are required to participate in CJR are listed in the final rule beginning on page 46.

The final rule “was similar to other recent statements by [CMS Administrator Seema] Verma that they are moving away from mandatory, with another round of voluntary bundles coming,” said Clay Richards, CEO of naviHealth.

“Those who weren’t as organizationally prepared for the mandate are adjusting—and seeing the benefits of participation—but not everyone has worked out how to be as successful,” said Darcie Hurteau, director of informatics at DataGen, a healthcare data analytics and policy firm.

The rule also provides flexibility on episode costs for CJR hospitals located in areas impacted by external circumstances, such as the recent hurricanes. 

The move away from mandatory bundles was urged by many hospitals and their advocates over concerns that they disadvantaged inexperienced or under-resourced providers, and were too complex.

“Commenters argued these providers, many of whom are smaller hospitals or systems, face logistical and practical challenges that would be exacerbated by comparing all providers, and their varying levels of resources, to one another through a mandatory initiative,” CMS officials wrote in the final rule.

Richards said the hospitals that his company assists in CJR are split on whether to continue in the program on a voluntary basis.

“Part of it is looking at what is the pricing model for their particular hospitals in that geography—if it is positive or negative,” Richards said, referring to the program’s regional benchmarks.

“More progressive” hospitals with a greater focus on value-based care, Richards said, also planned to continue in CJR on a voluntary basis or participate in the successor to the voluntary Bundled Payments for Care Improvement (BPCI) program, which ends in September 2018.

The naviHealth client hospitals that have gotten the best results in CJR are those that “make the investments in the clinical reprogramming efforts around analytics,” said Richards.

“Where folks have struggled is where they somewhat expected to do this only through financial incentives, without making the requisite investments in clinical protocols, network improvement, and analytics,” Richard said in an interview. “You have to make those investments to achieve savings in any of these episodes.”

Hurteau said deciding whether to stay in the CJR program comes down to how participants view “critical factors,” such as any return they’re seeing on investments in infrastructure and care management processes, how engaged their physicians are, and how they are performing financially in the program.

“Participants will all have different experiences when it comes to those factors, so that decision will need to happen at the individual organization level,” Hurteau said. 

CMS estimated that 60 to 80 hospitals in the 33 voluntary areas will choose during the 2018 selection period to continue their participation in CJR.

The agency noted that the move away from the mandatory models “may cause hospitals that potentially made improvements in care in anticipation of the start of these models to delay or cease these investments, which may result in a reversal of any recent quality improvements.”

However, such concerns were overridden by the potential negative impacts that hospitals raised, CMS officials said.

Hospitals are likely to maintain some of the innovative elements that they have implemented in preparation for the mandatory bundles, including the addition of care coordinators and “process improvements,” according to CMS officials.

Such measures “are likely to provide enhanced patient care by improving the efficiency and quality of care for Medicare beneficiaries and improving the coordination of care from the initial hospitalization through recovery, rather than reverting to previous practices that may not have placed as much emphasis on efficiency, quality, and care coordination,” CMS staff wrote in the rule.

BPCI Advanced

In the rule, CMS officials wrote that the agency “expects to develop new bundled payment model(s) during CY 2018 that would be designed to meet the criteria to be an Advanced APM [alternative payment model].” Hospital advocates in letters to CMS recently expressed concern about a lack of APMs that would qualify Medicare physicians for 5 percent annual bonuses under the Medicare Access and CHIP Reauthorization Act. Those physicians not in APMs face potential cuts of up to 9 percent of their annual Medicare revenue and steep quality-reporting requirements.

Among the most highly anticipated bundled payment programs is the successor to BPCI, a proposed rule for which is expected very soon, according to Deirdre Baggot, PhD, formerly a CMS expert reviewer for BPCI and now a principal at ECG.

Baggot said she expects the so-called BPCI Advanced model to commence by July 2018.

Richards expects BPCI Advanced to be very similar to BPCI, although providers are closely watching whether CMS opts to set pricing regionally or nationally in the new program.

Other Bundles

Additional bundled payment models that CMS’s Center for Medicare and Medicaid Innovation (CMMI) plans to issue in 2018 will aim to “reduce burdensome requirements and unnecessary regulations to the extent possible to allow physicians and other providers to focus on providing high-quality healthcare to their patients,” officials wrote in the rule.

Richards expects that the coming models will be similar to the dropped mandatory models.

“Clearly the hospital-led bundles have been very successful and are where they have probably the largest participation, and I would expect that to continue,” Richards said.

CMS indicated as much when it noted receiving positive hospital feedback on the CR model.

“As we further develop the Innovation Center’s portfolio of models, we may revisit this model and if we do, we will consider stakeholder feedback,” the rule states.

In contrast, CMS noted broad criticism that the “EPMs were not built upon the success of existing cardiac models.”

On a related note, CMS recently sought industry suggestions on a new direction for CMMI, which could influence the coming bundled payment models. Hospitals suggested a variety of new payment approaches.

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

Publication Date: Friday, December 01, 2017