CMS Unveils Bundled Payments for Heart Conditions, Femur Fractures

Home health agencies already are becoming more enmeshed with hospitals and other providers through new payment models, and that’s set to accelerate thanks to a program announced Monday. The proposed bundled payment model could mean closer hospital and home health coordination for patients with certain heart conditions, as well as those recovering from hip and femur fractures.

Hospitals in 98 randomly selected metropolitan areas would be mandated to take part in the cardiac care bundles, according to the proposed rule issued by the Centers for Medicare & Medicaid Services (CMS). Those hospitals would be responsible for managing a complete 90-day care episode for patients who have acute myocardial infarction (AMI) or coronary artery bypass graft (CABG) surgery.

As in the recently implemented Comprehensive Care for Joint Replacement (CJR) bundled payment model, this essentially means that these hospitals will have an increased financial interest in making sure patients receive high-quality, economical post-acute care, including in home health settings. That’s because the hospital will be able to receive bonus payments from Medicare by providing quality care for less than a set payment amount, while they will have to pay Medicare back if costs run over that amount.

Hospitals would be able to contract with home health and other providers to share in the potential savings, so home health agencies that can demonstrate they would be a good partner may gain a competitive advantage.

Also, CMS is proposing to loosen some of the strict Medicare requirements for home health services, for providers taking part in the new episodic payment model. For instance, some beneficiaries who otherwise would be ineligible for home health services would be allowed up to 13 home visits for an AMI diagnosis, or 9 visits during a CABG episode, according to the proposed rule.

Medicare payments would not immediately be at risk for hospitals mandated to participate in the new program. Between July 2017 and March 2018, there would be no downside risk. For the remainder of the program—scheduled to run through 2021—risk and incentives would escalate from 5% to 20%.

In addition to the new cardiac-focused program, CMS on Monday proposed expanding the current joint replacement bundles to include hip and femur fractures, as well as total knee and hip joint replacements.

The CJR program officially began in 67 geographic regions as of April 1 but currently is in a data-collection mode, with payment risk to begin later. The program represents an opportunity for home health providers—considering that home health use has been shown to cut costs for joint replacement patients. However, there also is a risk to lower-performing agencies that could see referrals dry up once hospitals start getting a firmer grasp on post-acute care patterns in their area.

Home health agencies likely will be unsurprised by the latest bundled payment announcement, considering that expanding to heart conditions was widely rumored to be the next step for CMS. The agency has repeatedly emphasized that it will be implementing more mandatory bundled payment programs as part of large-scale, ongoing reforms to the health care system. It renewed those promises Monday.

“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, in a press release. “The variation in cost and quality for the same surgery at different hospitals 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 schedule to be published in the Federal Register on Tuesday, and CMS will accept comments on it for 60 days.

Written by Tim Mullaney