CMS Finalizes New Medicare Mandatory Bundled Payment Models

Centers for Medicare & Medicaid Services (CMS) recently finalized new alternate payment models that continue the shift of Medicare payments from rewarding quantity to rewarding quality by creating incentives for hospitals and clinicians to work together to avoid complications, avoid preventable hospital readmission and speed patient recovery. The final rule includes three new payment models that support clinicians in providing care to patients who receive treatment for heart attacks, heart surgery to bypass blocked coronary arteries, or cardiac rehabilitation. The rule also includes a new payment model that will support clinicians in providing care to patients who receive surgery after a hip fracture beyond hip replacement, and also includes updates to the Comprehensive Care for Joint Replacement Model, which began in April 2016. Finally, the new rule provides a new track of ACOs modeled to allow small practices and additional hospitals, including rural hospitals, to participate in alternative payment models.

The payment models will apply to hospital admissions of Medicare patients in certain geographic areas. The models will operate over a period of five years beginning July 1, 2017. The cardiac payment models will apply to participating hospitals located in over 90 metro areas and the surgical hip fracture treatment model will apply to hospitals in 67 metro areas. The rule requires CMS to regularly monitor and evaluate the impact of these treatment and reimbursement approaches on care quality and value.