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CMS Announces Major Changes to Bundled Programs

August 17, 2017

This week the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would significantly reduce mandatory bundled programs. The rule proposes:

  • Canceling the cardiac and surgical hip and femur fracture treatment program and cardiac rehabilitation incentive payment program scheduled to begin January 1, 2018
  • Reducing the number of geographical areas in which mandatory participation in the Comprehensive Care for Joint Replacement (CJR) model is required from 67 to 34
  • Making participation in the CJR model voluntary for all low volume and rural hospitals in all of the geographical areas

The reduction of mandatory geographic areas for the CJR model does not impact Pennsylvania.  Mandatory participation is still in effect for Reading, Pittsburgh, and Harrisburg-Carlisle Metropolitan Statistical Areas. Two hospitals are, however, listed as eligible for voluntary participation due to low volume.

In its news release, CMS stated their intent to continue to offer opportunities for providers to participate in voluntary initiatives such as the Bundled Payment for Care Improvement initiative, rather than large mandatory episode payment model efforts. This aligns with early comments from the Department of Health and Human Services Secretary Tom Price who has been supportive of the transition from volume to value, but been particularly critical of programs that are mandatory in nature or those that may restrict the ways in which hospitals and physicians care for their patients.

CMS is also expected to develop new voluntary bundled payment models during 2018 that would meet criteria to qualify as an Advanced Alternative Payment model—an important component of the Quality Payment Program, which was recently implemented under the Medicare Access and CHIP Reauthorization Act, to pay clinicians for their services.

HAP will be analyzing the proposed rule. CMS will accept comments until October 16, 2017.

For additional information, contact Kate Slatt, HAP’s senior director, health care finance policy.

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