CMS Proposes to Cancel Mandatory Bundled Payment Models

The Centers for Medicare & Medicaid Services (CMS) has proposed to cancel mandatory bundled payment models and make changes to an existing bundled payment initiative focused on joint replacements.

The proposal aligns with what home health stakeholders have called for, as some have stated the mandatory bundles were being implemented too fast.

Specifically, CMS is moving to scrap the Episode Payment Models and Cardiac Rehabilitation incentive payment model, which were scheduled to begin on Jan. 1, 2018.


The proposed rule, issued Tuesday afternoon, would rescind the regulations related to these models, and also reduce the number of mandatory geographic areas participating in the Innovation Center’s Comprehensive Care for Joint Replacement (CJR) initiative from 67 areas to 33.

CMS also proposed making participation in the CJR model voluntary for all low volume and rural hospitals in all CJR geographic areas. The CJR model tests bundled payment and quality measurement for an episode of care related to hip and knee replacements, and went into effect April 1, 2016. Home health providers have seen an opportunity in CJR, as they are key players in keeping costs down through the post-acute period after patients undergo joint replacements.

The new proposal is in line with Health and Human Services (HHS) Secretary Tom Price’s desire to scrap mandatory bundled payment models in favor of voluntary programs.


“Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs and ease burdens on hospitals,” CMS Administrator Seema Verma said in a statement. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”

Industry Support

The agency did make clear it would likely push forward with voluntary models.

“Moving forward, CMS expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts,” a summary of the proposal reads. “The changes in the proposed rule would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models.”

Some home health care players have opposed to mandatory bundled payments, but are supportive of voluntary models that incentivize post-acute care providers to work with hospitals and other acute care settings. Others have opposed the speed at which the mandatory bundles were being implemented, despite delays in implementation in some instances.

“We believe CMS is taking a very sensible and reasonable step in evaluating innovations on a voluntary rather than mandatory basis,” Bill Dombi, interim president for the National Association for Home Care & Hospice (NAHC), told Home Health Care News on Tuesday.

Scrapping new mandatory bundled payment models is also in line with the Trump administration’s larger efforts to reshape bundled payments, including the rumored new version of the Bundled Payment for Care Improvement, or BPCI 2.0.

The proposed rule was filed on Tuesday, August 15, and is scheduled to be posted to the Federal Register on August 17. The proposal will be open to public comment for 60 days, ending October 16.

Read the full proposed rule here.

Written by Amy Baxter

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