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August 22, 2017

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AAOS Commends CMS for Important Changes to Bundled Payment Models

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CMS Releases FY2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Final Rule

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AAOS Commends CMS for Important Changes to Bundled Payment Models

On August 15, 2017 the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule that addresses significant concerns raised by the American Association of Orthopaedic Surgeons (AAOS) related to mandatory bundled payment programs. First, the proposed rule would reduce the number of mandatory geographic areas participating in the Center for Medicare and Medicaid Innovation’s (Innovation Center) Comprehensive Care for Joint Replacement (CJR) model from 67 to 34. In addition, the proposed rule would allow CJR participants in the 33 remaining areas to participate on a voluntary basis. CMS also proposes to make participation in the CJR model voluntary for ALL low volume and rural hospitals in ALL of the CJR geographic areas. A “one-time participation election period” for hospitals with a primary address located in the voluntary participation MSAs and for specified low-volume hospitals and rural hospitals in the mandatory participation MSAs would begin January 1, 2018, and would end January 31, 2018. Finally, CMS is proposing to cancel entirely the Surgical Hip and Femur Fracture Treatment (SHFFT) payment model and others that were scheduled to begin on January 1, 2018.

AAOS commends CMS for this important proposal and will be submitting comments by the October 16 due date. Previous comments submitted by AAOS on this issue can be viewed online here: www.aaos.org/Advocacy/MedicarePaymentCMS/

“AAOS applauds Secretary Price, Administrator Seema Verma, and others at CMS for clearly hearing concerns of orthopaedic surgeons related to these mandatory payment models,” stated AAOS President William J. Maloney, MD. “As we have said before, AAOS strongly supports the efforts of all stakeholders to develop payment models that incentivize care coordination and address rising health care costs. Additionally, appropriate alternative payment models are a necessary component of the current Quality Payment Program. However, imposing mandatory models on surgeons and facilities that lack the familiarity, experience, or infrastructure required has serious unintended consequences. Reducing the geographic area for CJR while still leaving a voluntary option significantly remedies this issue. We thank CMS for their work on this proposed rule and will be commenting officially with a more detailed response.”

“Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals,” said CMS Administrator Seema Verma. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”

In the proposed rule, CMS explained that in the future they expect to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts. The changes in the proposed rule, according to CMS, would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models. Specifically, CMS noted that the Innovation Center expects to develop new voluntary bundled payment model(s) during CY 2018, building on the BPCI initiative, that would be designed to meet the criteria to be an Advanced APM.

“Many providers are currently engaged in voluntary initiatives with CMS, and we expect to continue to offer opportunities for providers to participate in voluntary initiatives, including episode-based payment models,” the agency wrote in the proposed rule.

For more information on the Comprehensive Care for Joint Replacement Model, visit: https://innovation.cms.gov/initiatives/cjr.

For more information on the models proposed for rescission, visit: https://innovation.cms.gov/initiatives/epm

The proposed rule (CMS-5524-P) can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection. Public comments are due by October 16 at 11:59 pm EST.