Kindred, NAHC Say to Hit the Brakes on Bundled Payments

The Centers for Medicare & Medicaid Services (CMS) is moving too quickly on bundled payments, according to some of the nation’s largest home health providers and industry associations.

In April 2016, the mandatory Comprehensive Care for Joint Replacement (CJR) demonstration got underway. Under this program, hospitals in selected geographic areas would be responsible for controlling costs for orthopedic patients from the time of surgery to 90 days after hospital discharge; the hospital would have to pay Medicare for costs exceeding a certain benchmark, but would receive an incentive payment for keeping costs below that threshold.

The model incentivizes hospitals to coordinate with home health agencies and potentially share financial rewards, and should theoretically help control costs while improving care. For these reasons, the move to bundled payments generally has garnered support from the home health industry. However, CMS’ move to expand mandatory bundled payments to heart conditions and femur fractures—announced through a proposed rule issued in July—is too aggressive, many stakeholders argue.


CMS should take more time to evaluate the CJR demonstration before implementing mandatory bundled payments for other conditions, according to public comments on the July proposed rule that were submitted last week by various organizations, including the National Association for Home Care & Hospice (NAHC), Kindred Healthcare (NYSE: KND), and the Alliance for Home Health Quality & Innovation (AHHQI).

“Although bundled payment models may work to create efficiencies in health care delivery they can also encourage negative behaviors by the entity(s) that bears the financial risk, such as stinting on care; a delicate balance that CMS has expressed concern over in both this proposed rule and with the initiation of the CJR model,” NAHC stated. “Therefore, it is perplexing why CMS would go forward with plans to create and test three new episode payment models that will impact a significant number of Medicare beneficiaries and health care providers without clear evidence of the effectiveness of these models.”

As part of this effort, CMS should implement a more robust compliance monitoring program that looks at claims data, cost reports, quality measures for all Medicare Part A and Part B providers, beneficiary complaints, and has a schedule for medical record audits, NAHC urged.


CMS has implemented various other bundled payment models and analyzed their results, but these models were not mandatory for providers to participate in, NAHC noted. This is a crucial distinction that supports the argument for a CJR-specific evaluation period, the association stated.

More Flexibility Needed

A similar message came from Louisville-based Kindred, the nation’s largest home health provider.

“As CMS continues to test new models and create new quality, payment, and regulatory changes across the health care spectrum, it is necessary that the agency ensure that the goals, timing, and incentives are harmonized to make sure they are not in conflict with other programs and achieve the objectives of higher quality and reduced spending,” wrote Kindred Executive Vice President of Strategy, Policy & Integrated Care Bill Altman.

In addition to delaying expansion of the mandatory bundled payment program, Kindred urged CMS be more flexible and risk-adjust target prices for bundles, improve data sharing and transparency to help with care coordination, and expand quality metrics and regulatory waivers so that patients can be seen in the most clinically appropriate and cost-effective setting.

Further echoing these sentiments, AHHQI expressed concern that not enough evidence has yet been collected on CJR to justify expanding mandatory bundles.

CMS also should consider waiving the requirement that patients be homebound in certain bundled payment scenarios, AHHQI wrote in its comments. For instance, if a beneficiary meets eligibility requirements at the start of a 60-day episode, but then improves to the point of no longer being homebound.

“For beneficiaries who have already received at least 5 episodes, if a patient is discharged prior to the 60 days, Medicare pays the full 60-day episode rate,” AHHQI Executive Director Teresa Lee wrote. “This waiver would simply enable the HHA to continue to provide services during the remainder of the 60-day episode to non-homebound beneficiaries so that care is not interrupted.”

Waiving the homebound requirement in circumstances such as these would help control costs while improving outcomes, such as by reducing the likelihood of hospital readmission, Lee wrote.

CMS received the message to hit the brakes not only in home health organizations’  comments but from groups across the continuum, including the American Hospital Association (AHA) and the American Health Care Association (AHCA).

Written by Tim Mullaney

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