CMS Proposes Mandatory Bundled Payments for Cardiac Care

July 25, 2016

This would be the second group of procedures targeted for bundled payments in Medicare. Rules for hip and knee replacements went into effect in April in 67 markets.

Heart attacks and bypass surgery would be the next group of procedures covered through bundled payments in Medicare, under a plan CMS proposed today.

CMS enacted bundled payment requirements for hip and knee surgeries in 67 markets this April, and cardiac care was seen as the next are ripe for payment reform. Federal health officials have set a goal of using alternate payment models for 50% of all Medicare payments by 2018.

Heart disease is the world’s top killer, and accounts for 1 in 7 deaths in the United States. According to the American Heart Association, direct and indirect costs of cardiovascular disease and stroke top $316.6 billion a year. In 2014, Medicare spent more than $6 billion just on hospitalizations for heart attacks, but treatment costs varied by up to 50%.

Today’s plan calls for randomly selected hospital in 98 markets to be required to take part starting July 1, 2017. Hospitals not selected would not use bundles, as there is no application process, according to CMS. Rural hospitals would be excluded from the requirements.

With bundled payments, hospitals receive a flat rate for procedures and have the opportunity to receive “shared savings” for meeting healthcare and financial benchmarks.

“We think it’s important to keep pushing forward on delivery system reform,” said Patrick Conway, MD, MSc, acting principal deputy administrator and chief medical officer at CMS. He told reporters that cardiac care presented “a huge opportunity” for better care and savings.

Today’s proposal has 3 key parts, according to CMS:

· A bundled payment model for cardiac procedures and a new model to increase cardiac rehabilitation.

· An expansion of the new hip- and knee-replacement bundle to include other surgeries, including those for the femur.

· A way for physicians who take active part in bundled payment models to qualify for new incentives under the proposed Quality Payment Program.

The announcement comes just after CMS awarded 516 clinics funds to screen and identify at-risk patients through the Million Hearts program, which aims to prevent 1 million heart attacks and strokes by 2017.

A demonstration of bundled payments for cardiac care previously produced modest savings. The pilot involved 28 procedures and saved $319 per patient. CMS also looked to a demonstration of bundled payments for cardiac care in the Geisinger Health System, which produced a 45% reduction in 30-day readmissions, a 10% increase in discharges to patients’ homes, and a 21% decrease in patients who reported complications. The program also eliminated in-hospital mortality, which was already low.

The proposal spells out timelines to be used for the payment model, and spells out 4 criteria used to judge quality for care after a heart attack, as well as 2 more to be used for bypass surgery.

A recent McKesson report found that bundled payments are the fastest-growing alternate payment model, and that alternate models are on track to eclipse fee-for-service by 2020. However, the report found there is a “readiness gap,” especially among rural providers. Acting CMS Administrator Andy Slavitt recently told a Senate committee that there might be a delay to full implementation of the Medicare Access and CHIP Reauthorization Act of 2015, because small and rural providers are not ready for such sweeping reimbursement changes.