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CMS Delays Effective Date of Episode Payment Models and Changes to Joint Replacement Models

On March 21, 2017, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule delaying the start of its new mandatory cardiac and orthopedic models, as well as changes to the Comprehensive Care for Joint Replacement (CJR) model. The new models and CJR changes were delayed from July 1 to Oct. 1, 2017 in response to a presidential memorandum directing a delay of implementation of adopted regulations pending a review of questions of fact, law, and policy they might raise.

This interim final rule postpones implementation of regulations adopted on Jan. 3rd that create three new Medicare Episode Payment Models (EPMs) and a Cardiac Rehabilitation (CR) Incentive Payment model. The new EPMs require acute care hospitals in selected regions to participate in retrospective bundled payment arrangements for the following episodes of care provided to Medicare fee-for-service beneficiaries:

  • Acute myocardial infarction (AMI),
  • Coronary artery bypass graft (CABG), and
  • Surgical hip/femur fracture.

Hospitals in the following New York Metropolitan Statistical Areas (MSAs) were to be paid under these new models:

  • Buffalo-Cheektowaga-Niagara Falls (Surgical Hip/Femur Fracture)
  • New York-Newark-Jersey City (NY-NJ-PA) (Surgical Hip/Femur Fracture)
  • Utica-Rome (AMI and CABG)

If implemented as currently promulgated, the episodes of care will cover all related care beginning with a hospitalization and continuing for 90 days from the hospital discharge. Under the CR Incentive Payment model, acute care hospitals in certain selected geographic areas will receive retrospective incentive payments for cardiac rehabilitation/intensive cardiac rehabilitation services during the 90 days following discharge for treatment of an acute myocardial infarction or coronary artery bypass graft surgery.

This is the second delay in the effective dates of these regulations. According to CMS, the additional three-month delay is necessary to “allow time for additional review, to ensure that the agency has adequate time to undertake notice and comment rulemaking to modify the policy if modifications are warranted, and to ensure that in such a case participants have a clear understanding of the governing rules and are not required to take needless compliance steps due to the rule taking effect for a short duration before any potential modifications are effectuated.”

CMS is seeking comment on the appropriateness of this delay, as well as a further applicability date (i.e., model start date) delay until Jan. 1, 2018. To be assured consideration, comments must be received no later than 5 p.m. on April 19, 2017.

Notably, the delay does not affect the voluntary bundled payment models, (i.e., the Bundled Payments for Care Improvement initiative), nor does it change the existing requirements of the Comprehensive Care for Joint Replacement (CJR) model. The CJR model currently provides for episodic payments to hospitals for lower-extremity joint replacements (LEJRs) performed on Medicare fee-for-service beneficiaries in 14 counties in New York: Dutchess, Bronx, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester, Erie, and Niagara.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124