On July 25, 2016, the Department of Health and Human Services (HHS) released its proposed new models that demonstrate the Administration’s continued transition from quantity into quality of care. In this case, HHS was proposing incentives for hospitals to improve patient outcomes at a reduced cost to the healthcare system. The proposal, titled Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR), seeks to have hospitals collaborate with other providers in order to prevent hospital patient readmissions and avoid costly complications. On May 19, 2017, CMS announced that it is delaying the start date of this program to January 1, 2018 to allow additional time to prepare. For those that are wondering what this rule is, we figured we would outline what was previously proposed.
When it comes to the cardiac rehabilitation services of the proposal, CMS seeks to accomplish a few things. First, this will be geared toward patients that have been “hospitalized for a heart attack or bypass surgery, which would be based on beneficiary utilization of cardiac rehabilitation and intensive cardiac rehabilitation services in the 90-day care period following hospital discharge.” Secondly, CMS discussed model specifics. Hospitals may use this incentive payment to coordinate cardiac rehabilitation and support beneficiary adherence to the cardiac rehabilitation treatment plan to improve cardiovascular fitness. These payments would be available to hospital participants in 45 geographic areas that were not selected for the cardiac care bundled payment models as well as 45 geographic areas that were selected for the cardiac care bundled payment models. This test will cover the same five-year period as the cardiac care bundled payment models. Standard Medicare payments for cardiac rehabilitation services to all providers of these services for model beneficiaries would continue to be made directly to those providers throughout the model.
CMS proposes establishing a two-part cardiac rehabilitation incentive payment that would be paid retrospectively based on the total cardiac rehabilitation use of beneficiaries attributable to participant hospitals
- The initial payment would be $25 per cardiac rehabilitation service for each of the first 11 services paid for by Medicare during the care period for a heart attack or bypass surgery
- After 11 services are paid for by Medicare for a beneficiary, the payment would increase to $175 per service paid for by Medicare during the care period for a heart attack or bypass surgery
Based on Medicare coverage, the number of cardiac rehabilitation program sessions would be limited to a maximum of two one-hour sessions per day for up to 36 sessions for as many as to 36 weeks, with the option for an additional 36 sessions over an extended period of time if approved by the Medicare Administrative Contractor. Intensive cardiac rehabilitation program sessions would be limited to 72 one-hour sessions, up to six sessions per day, over a period of up to 18 weeks.
According to HHS, cardiac care should be a great target for cost containment. In 2014, more than 200,000 Medicare beneficiaries were hospitalized for heart attack treatment or underwent bypass surgery, costing Medicare over $6 billion. But the cost of treating patients for bypass surgery, hospitalization, and recovery varied by 50% across hospitals, and the share of heart attack patients readmitted to the hospital within 30 days varied by more than 50 percent. And, while harder to quantify, patient experience also varies.
Note: The chart below shows the first nationwide prevalence study of hip and knee arthroplasty shows 7.2 million Americans living with implants
Source: Mayo Clinic
While this proposal is geared toward hospitals, specialty providers should take notice for three reasons.
- Since this rule was put into place by the Obama Administration, there is undoubtedly uncertainty with the Trump Administration as far as whether this rule will survive intact. One certainty is that cost in this sector must be controlled and specialty has tools to help.
- Proposals such as these represent an opportunity for specialty. Since your business model is about helping patients improve outcomes, your unique position in the supply chain places you at the center of payer, provider, and manufacturer strategies
- Because many of the patients you treat may have underlying chronic conditions, cardiac issues may be among those you have to combat and knowing how HHS plans to reimburse this particular disease state will be key for your profitability.
Gone are the days in which providers can operate in a fee-for-service reimbursement silo. Now providers must adapt to working with each other in order to demonstrate value and maintain network viability. If you are looking for assistance in realizing how your firm can capitalize on policy and marketplace changes either by lobbying and advocacy or by simply needing to know how to advance your priorities regardless of what is happening, contact us.