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Bundled Payments: Mandatory, Voluntary or Gone Altogether?

Policy experts recently weighed in on the future of the bundled payment program. Uncertainty has been the byword since the current administration delayed the start of the latest mandatory bundled payment program. Some have speculated that such models are “on their way out.” There is no consensus among experts.


A review of the background: the current mandatory Comprehensive Care for Joint Replacement (CJR) model (started in 2016) was targeted for expansion at the same time new bundled payment models for heart attack, cardiac bypass surgery services, and a new cardiac rehabilitation incentive program (collectively known as episode payment models) were to go into effect on July 1. Both programs have been pushed back to Oct. 1.


CMS wants additional notice and feedback so it can tweak the program as needed. Among the issues on which the agency seeks comment is the possibility of delaying the new models to Jan. 1, 2018.


Some viewed the initial delay as particularly significant because of criticism of mandatory models by the Secretary of Health and Human Services.


Reactions/comments from industry experts include:


  • Health Care Transformation Task Force: “mandatory models are probably off the table—the true indication of the administration’s view of mandatory models will be whether it curtails the CJR model.”
  • Gail Wilensky (formerly head of the precursor to CMS): HHS Secretary’s objections may not be as straightforward as they appear; his objections last year (as a member of Congress) appeared “to stem from concern over imposing on congressional authority.”


One expert noted that bundles might be needed to move most providers toward full risk given that “there is some real concern about people who seem to be remaining for extended periods of time in the Medicare Shared Savings Program Track 1,” which carries no downside risk.


Regardless of what happens to mandatory bundled payment models, industry watchers expect a big increase in the use of bundled payments from the expected extension in 2018 of some version of the voluntary Bundled Payments for Care Improvement program.


(The information above excerpted from “Policy Pros Divided on Whether Mandatory Bundles Ending,” HFMA Weekly, April 28, 2017)



The American Hospital Association, which previously opposed mandatory participation, recently submitted a comment letter to CMS indicating that it backs a January 1, 2018 start date.


The Healthcare Financial Management Association (HFMA) stated in a recent letter that its members “strongly support” delaying the start of the cardiac and hip fracture episodes described in the Episode Payment Models interim final rule, and noting that at this time, the bundles do not reflect the principles HFMA has articulated for “fair and rational” payment models. Highlighting technical design flaws in the models, it identified the following issues: (“HFMA Comments on CMS’s EPM IFR,” HFMA Weekly, April 28, 2017)


  • Lack of risk adjustment
  • Insufficient episode exclusions
  • Insufficient access to Medicare claims data in a timely fashion
  • Insufficient (or inapplicable) quality measures
  • Inadequate waivers from antiquated fraud-and-abuse regulations that were designed to address the volume incentives inherent in fee-for-service-payments


However, HFMA encouraged CMS not to delay the expansion of CJR beyond October 1, 2017. “These adjustments create a pathway for the CJR program to be considered an Advanced Alternative Payment Model (AAPM) under the Medicare Access and CHIP Reauthorization Act (MACRA).” (“HFMA Comments on CMS’s EPM IFR,” HFMA Weekly, April 28, 2017)



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