EXECUTIVE SUMMARY

In a series of announcements, the Centers for Medicare & Medicaid Services (CMS) proposed changes in the bundled payment program and unveiled the Inpatient Prospective Payment System (IPPS) final rule.

  • CMS proposed cutting the number of geographic areas required to participate in the Comprehensive Care for Joint Replacement and making the program voluntary for the remaining hospitals.
  • In the IPPS, CMS announced that it is stratifying hospitals into five groups based on the proportion of dual eligible patients and will compare hospitals with similar groups to determine penalties in the readmission reduction program.
  • The agency announced changes in value-based purchasing and the Hospital Consumer Assessment of Healthcare Providers and Systems survey questions on pain management.

The Centers for Medicare & Medicaid Services (CMS) proposed sweeping changes in three bundled payment initiatives, and tweaked some of the pay-for-performance measures that affect hospital reimbursement.

In an announcement issued Aug. 15, the agency proposed reducing the number of geographic areas that are required to participate in the Comprehensive Care for Joint Replacement from 67 to 34. It also proposed making the program voluntary for hospitals in the remaining 33 areas, and for low-volume and rural hospitals in all geographic areas.

At the same time, CMS proposed canceling the Episode Payment Models and the Cardiac Rehabilitation incentive payment model that was scheduled to begin Jan. 1, 2018.

The move would give CMS more flexibility to design and test other innovations to improve quality and care coordination, according to CMS administrator Seema Verma. “Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals,” she said in a statement.

CMS also announced its intention to develop voluntary bundled payment initiatives in the future, rather than requiring hospitals to participate.

In the Inpatient Prospective Payment System (IPPS) final rule for the fiscal year 2018, CMS announced that future penalties issued under the hospital readmission reduction program will be based on how a hospital performs when compared to other hospitals with a similar percentage of patients who are dually eligible for Medicare and Medicaid. To comply with the 21st Century Cures Act, CMS will stratify hospitals into five peer groups, depending on their proportion of dual eligible patients. The program penalizes hospitals with excess 30-day readmissions of patients with acute myocardial infarction, heart failure, pneumonia, total hip arthroplasty/total knee arthroplasty, COPD, and coronary artery bypass graft surgery.

In the final rule, which goes into effect Oct. 1, CMS announced that it is replacing the pain management questions currently in the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey with a new set of questions that focus on the hospital staff’s communication with patients about pain. The new questions will be included on surveys distributed beginning Jan. 1, 2018. However, in response to stakeholder feedback, CMS has agreed to postpone posting the results for a year to give hospitals time to gain experience with the new measures.

CMS is updating the Value-Based Purchasing Program by removing the 8-indicator Patient Safety for Selected Indicators from Safety domain, beginning in fiscal 2019 and replacing it with a modified version, the 10-indicator Patient Safety and Adverse Events Composite measure, beginning in fiscal 2023.

In fiscal 2019, CMS will alter the weight of the domains used to calculate hospital performance in the program. It is combining Clinical Care Processes and Clinical Care Outcomes into one domain that represents 25% of the hospital’s performance. The other domains, Safety, Efficiency and Cost Reduction, and Personal and Community Engagement, each is weighted 25%.