August 16, 2017

CMS Proposes to Cancel the Episode Payment and Cardiac Rehabilitation Payment Models

On Tuesday, August 15, the Centers for Medicare and Medicaid Services (CMS) released the Medicare Program: Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model proposed rule. This proposed rule proposes to cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model and to rescind the regulations governing these models.

The proposed rule further proposes to prospectively make participation voluntary for all hospitals in approximately half of the geographic areas selected for participation in the Comprehensive Care for Joint Replacement (CJR) model and for low-volume and rural hospitals in all of the geographic areas selected for participation in the CJR model. CMS is also proposing several technical refinements and clarifications for certain CJR model payment, reconciliation and quality provisions and a change to the criteria for the Affiliated Practitioner List to broaden the CJR Advanced Alternative Payment Model (APM) track to additional eligible clinicians.

CMS asserts that review and reevaluation of policies and programs is often exercised after a change in administration occurs. Furthermore, CMS acknowledges that requiring hospitals to participate in additional episode payment models at this time is not in the best interest of the agency or the affected providers, CMS also stated that it is concerned that engaging in large mandatory episode payment model efforts at this time may impede its ability to engage providers, such as hospitals, in future voluntary efforts. If at a later date CMS decides to test the EPMs and CR models, the models would not be implemented through rulemaking, but rather through soliciting applications and securing participants’ agreement to participate, which is consistent with how CMS has implemented other voluntary models.

The EPMs and the CR incentive models were designed as mandatory payment models and implemented via notice and comment rulemaking to test the effects of bundling cardiac and orthopedic care set to begin on January 1, 2018.

The CJR model was also designed as a mandatory payment model established via notice and comment rulemaking to test the effects of bundling on orthopedic episodes involving lower extremity joint replacements. The CJR model began on April 1, 2016 and is currently in its second performance year.

The EPMs, CR and CJR models were established by the Centers for Medicare and Medicaid Innovation (CMMI) under the authority of section 1115A of the Social Security Act.

For more information on the CJR, EPM and CR models proposed for rescission, visit the CMS website.