Medicare finalizes cuts to value-based healthcare programs

The Centers for Medicare & Medicaid Services yesterday finalized cuts to a trio of bundled payment pilot programs aimed at lowering healthcare costs and improving outcomes.

The federal health insurer cut the Comprehensive Care for Joint Replacement Model, or CJR, effectively in half, from 67 geographic areas participating to 34, meaning about 470 hospital participants instead of 800. That cuts the expected savings from the CJR program from $295 million to $189 million, according to CMS.

The agency also finalized the cancellation of its Episode Payment Model and the Cardiac Rehabilitation Incentive Payment Model, which were slated to launch Jan. 1, 2018, claiming that the moves gives it more room to design and test ways to improve quality and care coordination. The pilot programs were estimated to save Medicare $170 million over five years.

CMS announced the 5-year “Comprehensive Care for Joint Replacement” program in July 2015, saying it would involve more than 800 hospitals in 75 geographic areas. The CJR program, which went into effect in January 2016, bundles payments for hip and knee replacements from hospital admission to 90 days after discharge. The payment covers “all related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries,” CMS said at the time. Reimbursement is also pegged to outcomes and cost, giving Medicare the ability to claw back payments or reward good performance with addition payments; the CJR program aims to save about $150 million over 5 years.

The Cardiac Rehabilitation Incentive Payment Model was designed to pay hospitals a fixed price for each “care episode” for patients treated for heart attack or bypass surgery, with higher prices paid to hospitals that deliver higher-quality care. The program also included incentives designed to push hospitals to better manage cardiac rehabilitation services in the 90 days after discharge, with the aim of improving patient adherence to rehab plans. The Episode Payment Model, bundled reimbursement for acute myocardial infarction and coronary artery bypass graft.

CMS first proposed scaling back the programs in August.

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