Cardiac Hip Fracture Models Signal Next Wave of Bundled Payments

By Mah-Jabeen Soobader | Posted: 08/04/2016

By Mah-Jabeen Soobader, PhD, Senior Vice President, Episode of Care, nThrive

On July 25, 2016, the Department of Health & Human Services (HHS) proposed three new episode payment models, continuing efforts by the Centers for Medicare and Medicaid Services (CMS) to shift from quantity to quality with episode-based bundled payments. These new models address cardiac care and extend the existing hip replacement model to other surgeries. Specifically, the proposal includes:

  • Medical treatment and surgical percutaneous coronary intervention (PCI) of acute myocardial infarction (AMI)
  • Coronary artery bypass graft (CABG)
  • Surgical hip and femur fractures treatment (SHFFT)

All are five-year (July 1, 2017 to December 31, 2021) mandatory programs, with AMI and CABG models to be implemented among hospitals in 98 randomly-selected metropolitan statistical areas (MSAs). The hip/femur fracture bundling model will be implemented among the same 67 MSAs selected for the original Comprehensive Care for Joint Replacement (CJR) model.

Like CJR, the acute care hospital with initial hospitalization for the eligible index procedures and conditions will be accountable for the cost and quality of care during the inpatient stay, as well as 90 days post discharge. This encourages hospitals to coordinate patient care and financial arrangements with other post-acute care providers, including inpatient rehabilitation hospitals, skilled nursing facilities, home health agencies, physicians, etc. Hospitals are also allowed to share reconciliation payments or the repayment risks with those providers with certain limitations.

To succeed in an episode payment model, CMS encourages hospitals to consider the most appropriate strategies for better care redesign, including:

  • Increasing post-hospitalization follow-up and medical management for patients
  • Coordinating across the inpatient and post-acute care spectrum
  • Conducting appropriate discharge planning
  • Improving adherence to treatment or drug regimens
  • Reducing readmission and complications during the post-discharge period
  • Managing chronic diseases and conditions that may be related to the proposed episodes

Episode target prices and phased implementation

As with CJR, target prices for the three new models cover costs for all relevant Part A and Part B services during the entire episode of care and are determined based on a blend of hospital and regional average payments for a baseline period. Target prices may be adjusted based on the complexity of the treatment. All providers will continue to bill and be paid under the traditional fee-for-services process throughout each performance year. At the end of the year, actual payment for the episode is compared to the target episode price to determine if the hospital should receive an additional payment from or be required to repay CMS.

To ease the adaption of the new models and the transition of care, hospitals are not required to take downside risk (repay CMS for the portion of payment that is greater than the target price) until the second quarter of the second performance year (April 2018). After that the risks are gradually phased in with capitation increasing from 5% to 20% of target prices throughout the performance years. Similar phased-in capitation is also applied to gains (payments from Medicare to hospitals), however hospitals are eligible for gains from the start of the implementation.

Quality measures

Also like CJR, health care organizations receive reconciliation payments when episode spending is below the target price, as long as they meet the established quality performance criteria established by CMS. The quality performance score will impact their incentive payment or repayment, with adjusted target price discounts ranging from 3% and 1.5%. Proposed quality measures include:

Heart attacks (AMI/PCI model)

  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Myocardial Infarction (AMI) Hospitalization (NQF #0230)  
  • Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey (NQF #0166)
  • Voluntary Hybrid Hospital 30-Day, All-Cause, Risk-Standardized Mortality eMeasure (NQF #2473) data submission

Bypass surgery (CABG model)

  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft (CABG) Surgery (NQF #2558)
  • HCAHPS Survey (NQF #0166)

Surgical hip/femur fractures treatment (SHFFT model)

  • Hospital-Level Risk-Standardized Complication Rate Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550)
  • HCAHPS Survey (#0166)
  • Voluntary Total Hip Arthroplasty (THA)/Total Knee Arthroplasty (TKA) Patient-Reported Outcome (PRO) and Limited Risk Variable data submission

Cardiac rehabilitation incentive payment model

CMS is also announcing a voluntary cardiac rehabilitation incentive payment model that will test the effects of payments that encourage use of cardiac rehabilitation services to improve patient outcomes. A CMS-proposed, two-part cardiac rehabilitation incentive payment will be paid retrospectively based on the total cardiac rehabilitation use -- the initial payment of $25 per cardiac rehabilitation service for each of the first 11 services and a payment of $175 per service for the subsequent services during the care period for a heart attack or bypass surgery. Sessions are limited to a maximum of 36 sessions over 36 weeks, with the option to extend.

This new wave of proposed bundled payment initiatives solidify CMS’s commitment to value-based reimbursement. At nThrive we can help you tackle bundled payment challenges to share risk while achieving quality and performance metrics. For more information on how our revenue cycle management solutions can help, contact an nThrive specialist at or call 678.323.2500.