CMS Proposes to Cancel Mandatory Bundled Payment Models

On August 17, 2017, the Centers for Medicare & Medicaid Services (CMS) proposed a rule to cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model as well as to revise aspects of the Comprehensive Care for Joint Replacement (CJR) model. The proposed rule is meant to offer CMS greater flexibility to design and test other episode-based payment models, while still allowing it to test and evaluate the impact of the ongoing CJR model.

The EPMs and CR incentive models were designed as mandatory payment models and implemented to test the effects of bundling cardiac and orthopedic care beginning on January 1, 2018. The CJR payment model was established to test the effects of bundling on orthopedic episodes involving lower extremity joint replacements. The CJR model began on
April 16, 2016 and is currently in its second performance year. Under the proposed rule, the CJR model would continue on a mandatory basis for 33 of the 67 original geographic areas, with an exception for low-volume and rural hospitals.

CMS believes that requiring hospitals to participate in additional episode payment models at this time is not in the best interest of the agency or providers. Mandating such episode payment models could deter providers from participating in future voluntary efforts. CMS stated that if, at a later date, it decided to test these models on a voluntary basis, it would expect to implement them by way of soliciting applications and securing participants’ agreements, consistent with how CMS implements other voluntary models. Comments on the proposed rule may be submitted to CMS no later than October 16, 2017.