The Department of Health and Human Services (HHS) has announced its latest step toward their goal of tying 50% of traditional Medicare payments to alternative payment models by the end of 2018.
In a July 25, 2016 Notice of Proposed Rule Making (NPRM) posted on their website, HHS Secretary Sylvia Mathews Burwell announced that:
Today, the Department of Health and Human Services proposed new models that continue the Administration’s progress to shift Medicare payments from quantity to quality by creating strong incentive for hospitals to deliver better care to patients at a lower cost. These models would reward hospitals that work together with physicians and other providers to avoid complication, prevent hospital readmissions and speed recovery./
HHS noted that heart attacks and strokes cause one in three deaths and result in over $300 billion in healthcare cost each year. Further, more than 200,000 Medicare beneficiaries were hospitalized in 2014 for heart attack treatment or underwent bypass surgery, costing Medicare over $6 billion. “However, the cost of treating patients for bypass surgery, hospitalization, and recovery varied by 50% across hospitals, and the share of heart attack patients readmitted to the hospital within 30 days varied by more than 50%,” HHS stated. According to the Summary of Economic Effect section of the NPRM, HHS expects the new episode payment models (EPM) to result in savings to Medicare of $170 million over the 5 performance years of the model.
What the new rule Proposes
According to the proposal, those Medicare providers where a patient is admitted for a heart attack, bypass surgery or surgical hip/femur fracture treatment would be accountable for costs and quality of care provided to beneficiaries during the inpatient stay and for 90 days after discharge.
The new EPM’s are AMI (MS-DRG’s 280-282) and PCI (MS-DRG’s 246-251), CABG (MS-DRG’s (231-236) and SHFFT (MS-DRG’s 480-482).
In addition to the new cardiac care EPM, the NPRM also announces a test of incentive payments designed to increase use of cardiac rehabilitation. According to HHS:
… these payments will encourage hospitals to ensure patients recovering from a cardiac event work with a team of health care professionals to improve cardiovascular fitness. Currently, only 15 percent of heart attack patients receive cardiac rehabilitation, even though clinical studies have found that completing a rehabilitation program can lower the risk of a second heart attack or death.
The NPRM also proposes new ways for physicians to qualify for financial rewards via the proposed Quality Payment Program, which implements the Medicare Access and CHIP Reauthorization Act of 2015. HHS noted that:
The bundled payment models proposed in today’s rule – as well as the Comprehensive Care for Joint Replacement model – could qualify as Advanced Alternative Payment Models beginning in 2018 for physicians who collaborate with hospitals participating in the models.
The new EPM models will have a five-year performance period beginning July 1, 2017, similar to CJR. Hospitals in 98 randomly selected metro areas will participate in these mandatory models. The new models will also utilize a Composite Quality Score to determine eligibility for reconciliation payments and discount percentages.
“Patients want the peace of mind of knowing they will receive high-quality, coordinated care from the minute they’re admitted to the hospital through their recovery,” said Patrick Conway, M.D., CMS principal deputy administrator and chief medical officer. “The variation in cost and quality shows there are major opportunities for hospitals included in today’s models to reduce costs, improve care, and receive additional payments by improving patient outcomes.”
/ The proposed rule is scheduled to be published in the August 2, 2016 Federal Register.