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CMS Announces Final Rules on New Bundled Payment and ACO Models

January 12th, 2017

CMS in December finalized the new mandatory bundled payment models for cardiac and orthopedic care. As part of its effort to shift Medicare payments to rewarding quality by encouraging the coordination of care between hospitals, physicians and other providers, CMS announced the following three policies:

  1. Three new payment models for patients who receive treatment for heart attacks (AMI Model), heart surgery to bypass blocked coronary arteries (CABG Model), or cardiac rehabilitation following a heart attack or heart surgery (CR Model).
  2. One new payment model for patients who receive surgery for a hip fracture, other than hip replacement (SHFFT Model). In addition, CMS finalized plans for the Comprehensive Care for Joint Replacement Model (CJR), which began in April 2016.
  3. Provision for a new accountable care organization (ACO) opportunity for small practices called the ACO Track 1+ Model that will have more limited downside risk than the current ACO Tracks.

These new payment models and the updated CJR Model give clinicians additional opportunities to qualify for a 5% incentive payment through the Advanced Alternative Payment Model (APM) path under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the Quality Payment Program.

Acute care hospitals in certain selected geographic areas will participate in retrospective episode-based payments for items and services that are related to AMI, CABG, and SHFFT treatment and recovery, beginning with a hospitalization and extending for 90 days following hospital discharge. The first performance period for the new episode payment models will begin on July 1, 2017 and last for 5 years.

The new rules have drawn mixed reaction from the medical community. American Hospital Association (AHA) Executive Vice President Tom Nickels stated, “The bundled-payment model for cardiac care is the second mandatory demonstration project the agency has finalized in the past 15 months. This is too much too soon.”

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