CMS Continues Advancement Toward Value-Based Payment Models

On July 25, 2016, the Department of Health and Human Services (HHS) released its Advancing Care Coordination Through Episode Payment Models Notice of Proposed Rule Making, marking its latest effort to reach the Centers for Medicare and Medicaid Services’ (CMS) goal of moving 50 percent of its Medicare payment to a pay-for-value model by 2018. 

Proposed rule guidelines: Under the proposed rule, CMS will identify acute care facilities in 98 randomly selected metropolitan statistical areas   mandated to participate in a new Medicare episode payment model. The model represents an expansion of the current bundled payment model for:

hip replacements (Comprehensive Care for Joint Replacement – CCJR); and

  • addition of an episode payment model for acute myocardial infarction and coronary artery bypass graft episodes. 

In addition, CMS shares its intention to continue a voluntary bundled payment model after its Bundled Payments for Care Improvement (BPCI) initiative officially ends. 

The rule would:

require the acute care facility to assume primary responsibility for the clinical and financial management of the patient beginning with the date of hospital admission through 90 days, post-discharge;

reward those hospitals that work together with physicians and other providers to avoid complications, prevent hospital readmissions, and reduce recovery time; and

encourage affected hospitals to enter into financial arrangements with these providers to share in the financial risk associated with the model.

Need for health IT: Within the language of the proposed rule, CMS recognizes that "Limitations in the availability of health IT may pose a barrier to effective post-acute care provider collaboration and sharing of financial risk in episode payment models even when hospitals are the financially responsible entities under such models." (Published in Notice of Proposed Rule Making CMS-5519-P. Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the comprehensive Care for Joint Replacement Model (CJR).)   

The mandatory nature of the rule and short implementation timeline (the proposed effective date is July 1, 2017) means that affected hospitals will be in varying stages of readiness to participate in the models. 

Role of health IT vendors: Larger organizations may have the internal financial and personnel resources to develop the necessary accounting tools to track and manage new financial arrangements with provider partners, and/or create automated communication tools to facilitate the sharing of financial and clinical data among providers involved in a single episode of care.

But. for many more, it will be necessary to develop manual work-arounds, a costly and time-consuming alternative. 

If providers are to succeed in this new environment, it is incumbent upon health IT vendors to rise to the challenge, and

  • develop the software tools to help medical practices and hospitals estimate their true cost of delivering care;
  • estimate their portion of the risk associated with these episode payment models; and
  • create interfaces that allow two-way communication among all healthcare providers in an episode of care. 

Episode payment models offer great promise for reducing healthcare costs and improving outcomes. But, realizing the full potential of these payment arrangements requires health IT tools and resources to support the unprecedented levels of collaboration and coordination they demand.

HIMSS; health IT; RMC