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Getting Ready for Bundled Payments in Cardiac Care

Mary Caffrey
Two consultants who help stakeholders in value-based transitions say CMS is serious about an aggressive pace for payment reform.
CMS’ announcement last week that cardiac care would be the next target for mandatory bundled payments brought mixed response—from fears that things are moving too fast, to concerns that safety-net hospitals would be treated fairly, to applause that some of Medicare’s mostly costly and common procedures would see an overhaul.

There’s opportunity in CMS’ proposal, say 2 consultants who work with providers and other stakeholders to ease the transition to value-based care. Meanwhile, the leader of a health system cardiac institute told The American Journal of Managed Care that his hospitals would hope to participate, since they are already working on bundled payments for heart failure.

In interviews, both Donna Cameron, a managing director for the Healthcare Performance Improvement Division with Navigant, and Michael Abrams, principal and managing partner for Numerof & Associates, said it’s no surprise that CMS looked at cardiac care as its next therapeutic area for value-based payment reform. A bundled payment mandate for hip-and-knee replacement started in April.

Joint replacements and cardiac procedures, such as bypass surgery, have key similarities: they are common, they are expensive, and there’s too much variation in cost.

With heart disease still listed as the world’s top killer—accounting for 1 in 7 deaths in the United States—it makes sense that CMS would want payment reform in cardiovascular care, which cost the nation $316.6 billion in 2014. Medicare spent $6 billion just on hospitalizations for heart attacks in 2014, with treatment costs varying up to 50%.

Under the proposal, CMS will select hospitals in 98 markets to participate in the mandatory bundled payment model, which will launch July 1, 2017. CMS cited prior success with pilots for cardiac bundled payments, as well as a successful program in the Geisinger Health System. The hip-and-knee bundle program, now in 67 markets, will expand to cover more procedures.

Focus on Transitions. CMS wants to improve care coordination and get more patients into cardiac rehabilitation, which has been shown to reduce readmission rates. Transitions of care offer the greatest opportunities for savings and improved quality, says Reginald J. Blaber, MD, FACC, executive director of the Cardiovascular Institute and vice president for Cardiovascular Services at Lourdes Health System, based in Camden, NJ. Lourdes recently contracted with one “major payer” for bundled payments, he said, although it’s too early to have results.

When asked how hospitals that treat sizable numbers of low-income patients—as Lourdes does—can adjustment to bundled payments, Blaber said, “It’s not so much an adjustment, but more of heightened attention to post-acute transitions, and making sure disadvantaged people get access to care out of the hospital.” Health systems need to address barriers to rehab, like finding transportation, and they must make sure patients take medication—even if that means lining up financial assistance, he said.

As payment levels have stalled, Abrams said, hospitals targeted those services that brought reimbursement, and until recently care coordination was not among them. He encouraged CMS to abandon “piecework” payment models—such as paying hospitals a set fee every time a patient goes to cardiac rehab—and embrace payment based on outcomes. For some, this will mean connecting them with nutrition counseling or smoking cessation support.

“Lifestyle changes like we’re talking about should be on par with treatment,” Abrams said.

Cameron said bringing bundled payments to cardiac care will require hospitals to build a “post-acute partner network” and get patients to participate. In the past, she said, cardiac rehabilitation has been presented to many patients as an option—one with more out-of-pocket costs. That approach must change, she said.

Those organizations that have already been proactive about organizing services—and engaging physicians—will see the greatest success, Cameron said.

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