Getting Ready for Bundled Payments in Cardiac Care


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.

Putting Patients First. Hand-in-hand with care coordination, Cameron said, is the need to give patients a single point of contact. She witnessed this firsthand when her husband had bypass surgery in 2008, and he had an endless stream of phone calls from different providers involved in his care. At one point he asked, “Donna, who is my quarterback?” He wanted to who was in charge, but Cameron said, “That is not how our healthcare system has been built.”

Abrams agrees, and said this demands close attention to how reimbursement is structured. Making separate payments for getting patients to rehab or a nutrition class instead of paying for outcomes misses the point, he said. “We should be making sure all of the provider organizations are accountable for getting a good outcome, not incentivizing on a piecemeal basis,” he said.

Resistance in Some Quarters. The American Hospital Association (AHA) did not reject the cardiac bundle concept, but questioned whether providers had the bandwidth to make the shift alongside the new hip-and-knee program, as well as compliance to the 2015 Medicare Access & CHIP Reauthorization Act. “CMS is putting the success of these critical programs at risk,” AHA Executive Vice President Tom Nickels said in a statement. “Hospitals are under a tremendous burden to ensure these complex models work for patients.”

Resistance isn’t universal, however, as Blaber’s response shows. Some providers are further along the path to payment reform than others, and Cameron and Abrams don’t see CMS putting on the brakes. “This is more evidence that CMS is very committed to accelerating the transition to value-based payment models,” Cameron said. Abrams thinks the proposal means that hospitals with high cardiac care costs that have avoided value-based models will be pushed to do so under the new bundle model.

What are the barriers to doctors and hospitals seeing success with cardiac care bundles? Both Cameron and Abrams say it’s a combination of solving technical hurdles—like making sure physicians can get timely feedback from payers—to changing the mindset.

Cameron said organizations have to ask: how are we providing education? Who are the internal “experts” charged with creating good communication plan, and getting buy in from all the stakeholders? “We finding that organizations that are successful take a very patient-centered view,” she said.

Abrams, whose group works across the entire healthcare continuum—educating providers, insurers, pharmaceutical manufacturers and device makers—said taking on risk and being accountable for outcomes is a sea change for many, and his company’s recent survey bore out out the “readiness gap” for value-based care. “It didn’t surprise us to find that the overwhelming majority were just dipping their toe in the water,” he said.

The question, he said, isn’t whether hospitals and doctors are ready, but whether CMS has any choice but to press ahead, given the age of the baby boomers. Officials have said 50% of all Medicare payments will be based on alternate models by 2018, and a recent McKesson report—which also highlighted the readiness gap—said value-based models would eclipse fee-for-service by 2020.

“I realize that the changes involved in adapting to value-based care models are extensive,” Abrams said. “But I don’t think we have the luxury of taking it at a pace that makes everybody comfortable.”

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