In July 2016, the Centers for Medicare and Medicaid Services (CMS) proposed a new mandatory bundled payment program for cardiac care. The proposed five-year program is structured similarly to previous episode-based models the agency rolled out for oncology care and joint replacement surgery. CMS plans to launch in July 2017 with hospitals in 98 randomly selected metropolitan statistical areas. 

How the proposed model is designed 

Basically, CMS will pay hospitals a fixed target amount for each episode of care a Medicare beneficiary receives for acute myocardial infarction (AMI) or coronary artery bypass graft (CABG) surgery. The payment will cover the index hospitalization and qualifying care the patient receives in the 90-day period after discharge.

Initially, the payments will be based largely on each hospital’s historical spending data, along with some regional spending data, and adjusted for case complexity and quality of care. By the fourth year of the program, they will be based entirely on regional spending data. If hospitals spend less than the target amount and meet baseline quality standards, they can share in the savings. If they spend more than the target amount, they will be required to pay back at least part of the difference. The incentives and penalties will be capped at 5 percent of the episode-based payment at first (there will be no risk-sharing for the first nine months) and will increase as the program progresses, reaching a maximum of 20 percent in the fourth year.

Starting in April 2018, the cardiac bundle could qualify as an Advanced Alternative Payment Model under MACRA, making it possible for physicians who collaborate with participating hospitals to earn an additional lump-sum bonus. 

Additional model to test cardiac rehab services 

In conjunction with the cardiac care bundled payment program, CMS proposed a concurrent model to test cardiac rehabilitation incentive payments as a means of reducing the risk of myocardial infarction or death for those who have been hospitalized for AMI or CABG surgery. Hospitals could use the incentive payments to coordinate cardiac rehabilitation services and support beneficiaries’ adherence to a treatment plan developed to improve cardiac health. 

The incentive payments would be paid retrospectively in two parts. The first would include $25 per service per beneficiary for each of the first 11 cardiac rehabilitation services Medicare pays for. The second would include $175 per service for those provided beyond the first 11. Limits on the number of sessions would apply.

Fewer deaths and readmissions, lower costs

Cardiovascular disease (CVD) is the country’s number one cause of death and disability, accounting for one-fourth of all deaths, according to the American Heart Association. Its direct and indirect costs exceed $200 billion per year. Hospitals treat more than 200,000 Medicare beneficiaries for AMI or CABG surgery each year. 

By encouraging hospitals to improve care transitions and patient monitoring after discharge, the model is designed to lower mortality rates and 30-day readmission rates, thereby also reducing costs. In a Viewpoint article published in the Nov. 15 issue of JAMA, Drs. Zirui Song and Daniel Blumenthal noted that CMS estimated the model could save $170 million in its five years, but that essentially all of the savings would occur in the last three years of the program when the benchmarks are based on mostly or entirely on regional spending.

Potential challenges and shortcomings

Sixty percent to 70 percent of AMIs are considered non-ST-elevation myocardial infarction (non-STEMI), in which the affected artery or arteries are only partially blocked. Physicians determine the optimal course of treatment for non-STEMI based on the patient’s risk for future adverse events; the decision to use clot-busting drugs or an interventional procedure such as angioplasty or stent placement is typically based on the patient’s clinical data.

Drs. Song and Blumenthal expressed several concerns with the bundled payment model. For instance, they noted that because clinical data often are not captured in administrative data, CMS could find it difficult to ascertain “whether expensive treatments are being used appropriately or avoided for a substantial proportion of patients with AMI.” The program could have unintended consequences such as lower use of more costly, invasive interventions in high-risk patients for whom they are warranted.

Another concern is that by focusing on improving outcomes during the 90 days following discharge, the program could inadvertently discourage the use of treatments that might substantially reduce adverse events and mortality 6 to 12 months after hospitalization.

Further, the benefits and disadvantages of program participation could vary considerably among hospitals. Some might end up bearing financial risk for post-discharge care over which they have no control. Some, such as safety net hospitals, could pay penalties for exceeding the average spending amount for their region, even though they are treating sicker patients or don’t have the support systems required to prevent rehospitalization.  

Strengthening the model

Drs. Song and Blumenthal offered a number of suggestions for avoiding these potential problems, including:

  • Publicly reporting risk-adjusted 1-year mortality rates for all hospitals that participate in the program
  • Testing bundles of different durations to evaluate the effects on outcomes
  • Monitoring rates of percutaneous intervention and CABG surgery for STEMI and non-STEMI to evaluate appropriate use and transfer of patients to other hospitals for treatment
  • Requesting shared accountability when hospitals transfer patients for treatment
  • Stratifying benchmarks by hospital capabilities so that underperforming hospitals have greater incentive to change their practices to more closely resemble those of higher-performing hospitals

Anticipated financial impact on hospitals

An analysis by Avalere showed that, based on their current spending patterns, 85 percent of hospitals participating in the bundled payment model would not see annual gains or losses of more than $500,000.

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