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For years, physicians have watched Medicare roll out pay-for-performance demonstration projects and ask for volunteers — soft healthcare reform, as it were.
The move from fee-for-service (FFS) to value-based reimbursement took a hard turn, however, when the Centers for Medicare & Medicaid Services (CMS) last month proposed three bundled payment models for cardiac and orthopedic care that will be mandatory — not voluntary — for hospitals in select geographic areas. Some medical societies otherwise on board with value-based reimbursement worry that such mandated programs could represent bad news for physicians who operate at these hospitals.
"Medicare patients are best served by voluntary, physician-led, condition-based models," said American Medical Association (AMA) President and orthopedic hand surgeon Andrew Gurman, MD, in a news release.
The Society of Thoracic Surgeons (STS) voices similar concerns about the proposed bundled-payment programs, especially when it comes to physician leadership.
"We were a little dismayed to find them mandatory," said Keith Naunheim, MD, second vice president and secretary on the STS board, in an interview with Medscape Medical News. "We don't want to be forced into something that we didn't participate in forging."
However, the AMA, the STS, and other medical societies see a lot they like in the CMS proposal, especially the opportunity to prosper under the new payment arrangements created by the Medicare Access and CHIP Reauthorization Act (MACRA).
Bundled payments typically mean that Medicare or a private insurer sets a target price for an episode of care, such as a surgery — including several months of postdischarge care — that covers estimated charges by the hospital, physicians, and other providers. If these parties can come under budget, they share in the savings. If they go over budget, they owe the third-party payer money. Accordingly, the hospital and its care team are motivated to work together more efficiently to reduce postdischarge complications and revolving-door readmissions, which translate into bad health outcomes and higher spending.
That's a thumbnail sketch of what CMS wants to do in its proposal for three bundled episodes of care — acute myocardial infarction, coronary artery bypass grafts, and surgical hip/femur fracture treatment exclusive of lower-extremity joint replacement. The last mouthful is short for hip surgeries that don't involve a prosthesis.
The two cardiac bundles will go into effect at hospitals in 98 randomly selected metro areas. CMS will implement the orthopedic bundle in 67 metro areas that are now the assigned territory for a mandatory bundled payment program for hip and knee replacements that took effect April 1. The locales for this program, called the Comprehensive Care for Joint Replacement (CJR) model, include Los Angeles, California; St. Louis, Missouri; Portland, Oregon; Pittsburgh, Pennsylvania; and Miami, Florida.
CMS will test the three new bundles for 5 years beginning in July 2017. Each bundle will cover inpatient care and the 90 days following discharge. Shared savings initially would be capped at 5% of the target price, but the cap would gradually expand to as much as 20%. For the first 15 months of the experiment, CMS wouldn't require repayments from hospitals and their partners that exceeded their target price. Afterward, their risk increases in parallel with the shared savings potential.
Earlier Bundled Payment Program Criticized for Being Mandatory
When CMS floated its proposal for CJR, medical societies had some good things to say about it, and some bad things. The American Association of Orthopaedic Surgeons (AAOS), for one, urged CMS to make the program voluntary. The AAOS argued that CJR would push hospitals and their affiliated surgeons into a new way of delivering care whether or not they had the necessary infrastructure — think visiting nurses and interoperable electronic health records (EHRs) — or enough patient volume to succeed.
The society also warned that orthopedic surgeons who didn't want to sign a bundled payment contract with their hospital, or weren't invited to, could be denied privileges, giving Medicare beneficiaries fewer physicians to choose from. In addition, Medicare's push for hospital-physician teamwork could prompt hospitals to simply buy orthopedic practices, which could drive up prices and also limit beneficiary access.
The American Association of Neurological Surgeons, the Congress of Neurological Surgeons, the American Association of Hip and Knee Surgeons, and the AMA made similar arguments in favor of a voluntary CJR program.
For its part, the AMA said in a letter to CMS that it "does not believe there is any need for a mandate to encourage participation in a properly designed bundled payment system." It pointed to widespread enrollment, at least initially, in a voluntary program called the Bundled Payments for Care Improvement. And like other groups, the AMA asked the government to make CJR available to any hospital in the country.
Bundled Payment Models Would Qualify as Advanced APMs
Despite entreaties to the contrary, CJR launched in April as a mandatory program in selected areas. Now organized medicine is weighing the new episode-of-care bundles proposed by CMS. The response so far has been mixed. One provision of the plan drew immediate praise — designation of the bundles as Advanced Alternative Payment Models (APMs) under draft regulations for MACRA.
Students of MACRA, which replaced Medicare's hated sustainable growth rate formula for reimbursement, know that the law set up two payment tracks. The default track for physicians, and the one most will participate in initially, is the Merit-Based Incentive Payment System (MIPS). It combines three existing Medicare incentive programs — the Physician Quality Reporting System, the Value- Based Payment Modifier, and the program for meaningful use of EHRs. In 2019, the bonuses and penalties are as high — or low — as 4% of Medicare FFS revenue.
Many physicians see less administrative hassle and more revenue potential in Advanced APMs, the other payment track in MACRA. Exempt from MIPS and its penalties, these models earn a lump sum bonus of 5% a year as long as they assume serious financial risk under their particular model. Examples of Advanced APMs include next-generation accountable care organizations, Comprehensive Primary Care Plus, and track 3 of the Medicare Shared Savings Program.
Draft regulations implementing MACRA distinguish between Advanced APMs and APMs pure and simple, which do not exempt participating physicians from MIPS. Orthopedic physicians, for example, were galled that the CJR program did not make the cut. That's no longer the case, however, in the latest bundled-payments plan from CMS. The agency said that CJR could now qualify as an Advanced APM, as could the new bundles for cardiac and orthopedic care.
"The changes they have proposed are amazing, and very positive," said Thomas Barber, MD, who chairs the AAOS Council on Advocacy. "We never thought Medicare would meet us halfway, and they are."
The AAOS is essentially resigned to the new orthopedic bundle being mandatory, given that they have no choice about its predecessor. "We would have preferred a voluntary sign-up, but that cat is out of the bag," said Dr Barber.
To his society, the CMS decision to recognize the old and new bundled payment programs as Advanced APMs is a victory that outweighs the defeat on mandatory-vs-voluntary. "It's not as much of a concern now," said Dr Barber.
Dr Naunheim at the STS also is happy that the cardio bundles will qualify as Advanced APMs, but he worries that there's been too little design input from thoracic surgeons to secure their buy- in, much less benefit patients. The STS, Dr Naunheim said, can offer CMS more than 2 decades' worth of outcome data to complement the agency's voluminous information on readmissions, medications, and spending.
"Medicare (alone) doesn't have the expertise or data to lead a quality improvement model," he said. "Unless we collaborate, it's not going to work. Hopefully, Medicare is listening to us."
The American Association for Thoracic Surgery (AATS) also wants CMS to listen to its insights on quality improvement. "We're a very data-driven specialty," AATS President Thoralf Sundt III, MD, told Medscape Medical News. "We've learned a lot about things such as drivers for readmissions and costs."
However, Dr Sundt doesn't find it offensive that the proposed bundles are mandatory.
"It's the next logical step for the government in exploring these new payment schemes," said Dr Sundt. "You can only go so far with voluntary participation."
"CMS Is Getting Pushy"
One veteran of organized medicine sees great potential in the proposed bundles for improving health outcomes and lowering costs, but sympathizes with those who advocate freedom of choice.
"The mandatory piece will be a bitter pill, but it's a reflection of the concern that CMS and members of Congress have, that if we don't get moving on new payment models, we won't achieve our cost-saving goals," said Jack Lewin, MD, president and chief executive officer of the Cardiovascular Research Foundation, in an interview with Medscape Medical News. "They feel like they need to put more pressure on.
"CMS is getting pushy."
If CMS doesn't relent on making the bundled payment models mandatory, then the agency needs to implement them more gradually than proposed, said Dr Lewin, who was formerly CEO of the American College of Cardiology and the California Medical Association. Right now, the new models are scheduled to debut in July 2017. For bundled models to succeed, he said, hospitals and physicians need to tap into a variety of patient-data sources, not just the hospital's EHR, and get that information quickly to manage care effectively. The necessary digital infrastructure isn't in place yet, said Dr Lewin.
"Maybe the move toward (value-based care) is moving faster than the system can accommodate it," he said.
Like others, Dr Lewin predicts that the CMS proposal for bundled payments will "accelerate the consolidation of physicians and hospitals," to the detriment of independent medical practices.
"I think that it's going to be a profound effect of it," he said. "Physicians and hospitals who aren't linked economically by virtue of employment or contractual exclusivity, I think they'll have a tougher time with bundles."
CMS is accepting comments on its bundled-payment proposal through October 3. The proposal explains how to submit comments.
Follow Robert Lowes on Twitter @LowesRobert
The move from fee-for-service (FFS) to value-based reimbursement took a hard turn, however, when the Centers for Medicare & Medicaid Services (CMS) last month proposed three bundled payment models for cardiac and orthopedic care that will be mandatory — not voluntary — for hospitals in select geographic areas. Some medical societies otherwise on board with value-based reimbursement worry that such mandated programs could represent bad news for physicians who operate at these hospitals.
"Medicare patients are best served by voluntary, physician-led, condition-based models," said American Medical Association (AMA) President and orthopedic hand surgeon Andrew Gurman, MD, in a news release.
The Society of Thoracic Surgeons (STS) voices similar concerns about the proposed bundled-payment programs, especially when it comes to physician leadership.
"We were a little dismayed to find them mandatory," said Keith Naunheim, MD, second vice president and secretary on the STS board, in an interview with Medscape Medical News. "We don't want to be forced into something that we didn't participate in forging."
However, the AMA, the STS, and other medical societies see a lot they like in the CMS proposal, especially the opportunity to prosper under the new payment arrangements created by the Medicare Access and CHIP Reauthorization Act (MACRA).
Bundled payments typically mean that Medicare or a private insurer sets a target price for an episode of care, such as a surgery — including several months of postdischarge care — that covers estimated charges by the hospital, physicians, and other providers. If these parties can come under budget, they share in the savings. If they go over budget, they owe the third-party payer money. Accordingly, the hospital and its care team are motivated to work together more efficiently to reduce postdischarge complications and revolving-door readmissions, which translate into bad health outcomes and higher spending.
That's a thumbnail sketch of what CMS wants to do in its proposal for three bundled episodes of care — acute myocardial infarction, coronary artery bypass grafts, and surgical hip/femur fracture treatment exclusive of lower-extremity joint replacement. The last mouthful is short for hip surgeries that don't involve a prosthesis.
The two cardiac bundles will go into effect at hospitals in 98 randomly selected metro areas. CMS will implement the orthopedic bundle in 67 metro areas that are now the assigned territory for a mandatory bundled payment program for hip and knee replacements that took effect April 1. The locales for this program, called the Comprehensive Care for Joint Replacement (CJR) model, include Los Angeles, California; St. Louis, Missouri; Portland, Oregon; Pittsburgh, Pennsylvania; and Miami, Florida.
CMS will test the three new bundles for 5 years beginning in July 2017. Each bundle will cover inpatient care and the 90 days following discharge. Shared savings initially would be capped at 5% of the target price, but the cap would gradually expand to as much as 20%. For the first 15 months of the experiment, CMS wouldn't require repayments from hospitals and their partners that exceeded their target price. Afterward, their risk increases in parallel with the shared savings potential.
Earlier Bundled Payment Program Criticized for Being Mandatory
When CMS floated its proposal for CJR, medical societies had some good things to say about it, and some bad things. The American Association of Orthopaedic Surgeons (AAOS), for one, urged CMS to make the program voluntary. The AAOS argued that CJR would push hospitals and their affiliated surgeons into a new way of delivering care whether or not they had the necessary infrastructure — think visiting nurses and interoperable electronic health records (EHRs) — or enough patient volume to succeed.
The society also warned that orthopedic surgeons who didn't want to sign a bundled payment contract with their hospital, or weren't invited to, could be denied privileges, giving Medicare beneficiaries fewer physicians to choose from. In addition, Medicare's push for hospital-physician teamwork could prompt hospitals to simply buy orthopedic practices, which could drive up prices and also limit beneficiary access.
The American Association of Neurological Surgeons, the Congress of Neurological Surgeons, the American Association of Hip and Knee Surgeons, and the AMA made similar arguments in favor of a voluntary CJR program.
For its part, the AMA said in a letter to CMS that it "does not believe there is any need for a mandate to encourage participation in a properly designed bundled payment system." It pointed to widespread enrollment, at least initially, in a voluntary program called the Bundled Payments for Care Improvement. And like other groups, the AMA asked the government to make CJR available to any hospital in the country.
Bundled Payment Models Would Qualify as Advanced APMs
Despite entreaties to the contrary, CJR launched in April as a mandatory program in selected areas. Now organized medicine is weighing the new episode-of-care bundles proposed by CMS. The response so far has been mixed. One provision of the plan drew immediate praise — designation of the bundles as Advanced Alternative Payment Models (APMs) under draft regulations for MACRA.
Students of MACRA, which replaced Medicare's hated sustainable growth rate formula for reimbursement, know that the law set up two payment tracks. The default track for physicians, and the one most will participate in initially, is the Merit-Based Incentive Payment System (MIPS). It combines three existing Medicare incentive programs — the Physician Quality Reporting System, the Value- Based Payment Modifier, and the program for meaningful use of EHRs. In 2019, the bonuses and penalties are as high — or low — as 4% of Medicare FFS revenue.
Many physicians see less administrative hassle and more revenue potential in Advanced APMs, the other payment track in MACRA. Exempt from MIPS and its penalties, these models earn a lump sum bonus of 5% a year as long as they assume serious financial risk under their particular model. Examples of Advanced APMs include next-generation accountable care organizations, Comprehensive Primary Care Plus, and track 3 of the Medicare Shared Savings Program.
Draft regulations implementing MACRA distinguish between Advanced APMs and APMs pure and simple, which do not exempt participating physicians from MIPS. Orthopedic physicians, for example, were galled that the CJR program did not make the cut. That's no longer the case, however, in the latest bundled-payments plan from CMS. The agency said that CJR could now qualify as an Advanced APM, as could the new bundles for cardiac and orthopedic care.
"The changes they have proposed are amazing, and very positive," said Thomas Barber, MD, who chairs the AAOS Council on Advocacy. "We never thought Medicare would meet us halfway, and they are."
The AAOS is essentially resigned to the new orthopedic bundle being mandatory, given that they have no choice about its predecessor. "We would have preferred a voluntary sign-up, but that cat is out of the bag," said Dr Barber.
To his society, the CMS decision to recognize the old and new bundled payment programs as Advanced APMs is a victory that outweighs the defeat on mandatory-vs-voluntary. "It's not as much of a concern now," said Dr Barber.
Dr Naunheim at the STS also is happy that the cardio bundles will qualify as Advanced APMs, but he worries that there's been too little design input from thoracic surgeons to secure their buy- in, much less benefit patients. The STS, Dr Naunheim said, can offer CMS more than 2 decades' worth of outcome data to complement the agency's voluminous information on readmissions, medications, and spending.
"Medicare (alone) doesn't have the expertise or data to lead a quality improvement model," he said. "Unless we collaborate, it's not going to work. Hopefully, Medicare is listening to us."
The American Association for Thoracic Surgery (AATS) also wants CMS to listen to its insights on quality improvement. "We're a very data-driven specialty," AATS President Thoralf Sundt III, MD, told Medscape Medical News. "We've learned a lot about things such as drivers for readmissions and costs."
However, Dr Sundt doesn't find it offensive that the proposed bundles are mandatory.
"It's the next logical step for the government in exploring these new payment schemes," said Dr Sundt. "You can only go so far with voluntary participation."
"CMS Is Getting Pushy"
One veteran of organized medicine sees great potential in the proposed bundles for improving health outcomes and lowering costs, but sympathizes with those who advocate freedom of choice.
"The mandatory piece will be a bitter pill, but it's a reflection of the concern that CMS and members of Congress have, that if we don't get moving on new payment models, we won't achieve our cost-saving goals," said Jack Lewin, MD, president and chief executive officer of the Cardiovascular Research Foundation, in an interview with Medscape Medical News. "They feel like they need to put more pressure on.
"CMS is getting pushy."
If CMS doesn't relent on making the bundled payment models mandatory, then the agency needs to implement them more gradually than proposed, said Dr Lewin, who was formerly CEO of the American College of Cardiology and the California Medical Association. Right now, the new models are scheduled to debut in July 2017. For bundled models to succeed, he said, hospitals and physicians need to tap into a variety of patient-data sources, not just the hospital's EHR, and get that information quickly to manage care effectively. The necessary digital infrastructure isn't in place yet, said Dr Lewin.
"Maybe the move toward (value-based care) is moving faster than the system can accommodate it," he said.
Like others, Dr Lewin predicts that the CMS proposal for bundled payments will "accelerate the consolidation of physicians and hospitals," to the detriment of independent medical practices.
"I think that it's going to be a profound effect of it," he said. "Physicians and hospitals who aren't linked economically by virtue of employment or contractual exclusivity, I think they'll have a tougher time with bundles."
CMS is accepting comments on its bundled-payment proposal through October 3. The proposal explains how to submit comments.
Follow Robert Lowes on Twitter @LowesRobert
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