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CMS Cancels Two Mandatory Payments Models

The Centers for Medicare and Medicaid Services (CMS) recently announced a proposed rule to change the structure of the Comprehensive Care for Joint Replacement (CJR) model, and cancel the Episodic Payment Model (EPMs), and Cardiac Rehabilitation (CR) incentive payment model.

The number of mandatory geographic areas that must participate in the CJR will be reduced from 67 to 34. Additionally, the geographic areas that remain will be allowed to participate voluntarily. All low-volume hospitals and rural hospitals in the CJR model will be allowed to participate on a voluntary basis.

The rule proposes to eliminate the EPM and CR models that were scheduled to begin on Jan. 1, 2018. “Eliminating these models would give CMS greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute-care spectrum,” according to the CMS announcement.

“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,” said CMS Administrator Seema Verma in a statement. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”

These payment models were established under the Affordable Care Act to integrate care and reduce costs. Under the models, all providers delivering care for a given ailment are bundled together and receive one single payment. Current HHS Secretary Tom Price, MD, has been a vocal critic of bundled payment models. In 2016, he co-authored a letter to Andy Slavitt, then acting administrator of the CMS, asking for a delay in the models’ implementation until the effects could be further studied.

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