MARCH 26, 2020

Welcome to the Bundled Payment Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
the National Medical Home Summit, the National MACRA MIPS/APM Summit,
and the National Medicare Advantage Summit

CMS Looks to Extend CJR Bundled Payment Model
Federal health care policymakers have introduced a new proposed rule that would extend the Comprehensive Care for Joint Replacement (CJR) bundled-payment model for an additional three years. he proposed rule, released last Thursday, would also expand CJR's reach to outpatient procedures. Currently, CJR -- an area many home health providers have gotten involved with -- is scheduled to expire on Dec. 31. However, if the U.S. Centers for Medicare & Medicaid Services (CMS) finalizes its proposal, the model would remain in place through the end of 2023. CJR is now active in nearly 70 markets across the nation. Broadly, the model is designed to reduce overall Medicare spending on hip and knee replacements, the most common surgeries for those enrolled in the program. To do so, the model encourages operators along the spectrum -- from the hospital to the skilled nursing facility to the home -- to curb the entire episodic cost of each patient's procedure by providing a single retroactive payment for all services incurred during that timeframe. Under the current iteration of CJR, the episode begins when a patient is admitted to the hospital, though that would change under the proposed rule. "The proposed rule also proposes to make changes to the definition of a CJR ‘episode' to include outpatient knee and hip replacements," CMS wrote in a fact sheet on the new rule. "We are proposing this episode definition change in order to address changes to the inpatient-only (IPO) list that now allow for total knee and total hip replacements to be treated in the outpatient setting." (Home Healthcare News, February 23, 2020)

Bundled Payment Models: Will Canceled Surgeries Affect the Programs?
Participation in Medicare and commercial bundled payment models could be affected by guidance that urges hospitals to cease elective surgeries amid the COVID-19 outbreak, according to The National Law Review. Nationwide, hundreds of hospitals and providers participate in inpatient episodes of care models. These include the Comprehensive Care for Joint Replacement Model and the Advanced Bundled Payments for Care Improvement Model. If providers can't provide the services tracked under these models, it could affect performance in the current model year, according to The National Law Review. It could also affect future years of the models, as target prices for episodes are based on historical claims. On March 18, CMS Administrator Seema Verma urged all hospitals to comply with the American College of Surgeons' recommendation to cancel nonessential and non-urgent elective procedures. (Becker's CFO Report, March 20, 2020)

New Market Survey Findings Reveal Opportunities and Barriers to Adopting Value-based Payment Models
he value-based care movement has expanded in recent years and the adoption of value-based payment models has shown signs of accelerating. However, organizations still face critical challenges when entering VBP arrangements. Hurdles include balancing fee-for-service and fee-for-value mindsets, the amount of investment necessary to effectively participate and the ability to ensure adequate volume to protect against risk. DataGen, a leading healthcare data analytics and policy firm, has released new market survey findings that explore how healthcare organizations are planning for and navigating these challenges. Based on a survey of 102 healthcare executives, the data reveal insight into how these leaders view the current state and future of VBC. Access the full market report I n the Re3swource section below. (PRNewswire, March 10, 2020)

Third of Execs Don't Think Value-Based Payment Will Usurp FFS
Value-based payment adoption has steadily increased, but a third of healthcare executives in a new survey do not believe the alternative payment mechanism will usurp fee-for-service. Fee-for-service mindset and model are too entrenched for value-based payment to take off in the near future., the C-suite executives from hospitals, health systems, and physician groups said in the survey conducted by Sage Growth Partners for DataGen. Other reasons why value-based payment is unlikely to replace fee-for-service included:

  • Clinical staff resistance to value-based payment
  • Low incentives
  • Lack of resources and knowledge to assume risk
  • Volatility of the healthcare industry, especially in the face of change

Aligning businesses with value-based payment will require a hefty lift from provider organizations. These organizations must not only have the budget -- which was the number one reason why some providers are not investing in value-based payment -- but also the right culture, vendor partners, staff, and leadership, the survey of over 100 executives found. Additionally, many healthcare organizations are not seeing the financial benefit of participating in value-based payment models. The majority of respondents said quality is improving under the models, but only 45 percent said financials had improved moderately or significantly. (RevCycle Intelligence, March 11, 2020)

Oncology Care First Is a Big Step Toward Bundled Payments in Cancer Care, Authors Say
Oncology Care First (OCF), proposed as the successor to the Oncology Care Model (OCM), will be a major step toward shifting cancer care to bundled payments, according to leaders from an emerging network of community oncology practices. Writing yesterday in JCO Oncology Practice, published by the American Society of Clinical Oncology, authors from OneOncology highlighted 3 key insights about the OCF, which could take effect by January 1, 2021. The Center for Medicare and Medicaid Innovation (CMMI) sent out a Request for Information on November 1, 2019, to replace the OCM, which involves 175 practices in a 5-year pilot to bring risk-sharing strategies to oncology care. The OCM is built on a fee-for-service (FFS) framework, with practices receiving monthly payments to cover the cost of bringing services to patients that include better care coordination, 24/7 access to medical records, greater access to same-day appointments, and a focus on care planning and survivorship care. Most evaluations of the OCM say it has been good for patients, but that the pricing formulas lag behind the escalating costs of some innovative drugs. (American Journal of Managed Care, February 26, 2020)

CMS Considers Extending Hip and Knee Replacement Payment Model for Another 3 Years
The Trump administration wants to keep a hip and knee replacement bundled payment model going for another three years. The Centers for Medicare & Medicaid Services (CMS) released a proposed rule Thursday that calls for a three-year extension to the Comprehensive Care for Joint Replacement Model, which is set to end after this year. The agency is also floating a major change to cover outpatient replacements, as the model currently only covers inpatient procedures. The goal is to address changes to facilities that can now "allow for total knee and hip replacements to be treated in the outpatient setting," CMS said in a fact sheet on Thursday. CMS is also proposing changes for how it will reconcile payments made under the model. Participating hospitals can get a bundled payment to cover an entire episode of care for a hip or knee replacement. (FierceHealthcare, February 20, 2020)

Market Report: The Next Leap in Value-Based Care

Bundled Payment Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as ACOs, patient safety, pay for performance, comparative effectiveness, readmissions, and Medicaid. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

Case Study of BlueCross BlueShield of North Carolina's Value-based Payment Initiatives

James P. Sharp, MPH, JD
Director, Health Care Strategy and Transformation, BlueCross BlueShield of North Carolina; Former Policy and Strategy Advisor, Office of the Director, Center for Medicare and Medicaid Innovation, Washington, DC