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Through our partnership with NRHI (Network for Regional Healthcare Improvement), we’re bringing you relevant policy updates to help you and your organization understand how changes in federal policy affect the delivery and consumption of health and healthcare in our region.

CMS abandons Part B Demo, but marches forward with other mandatory APMs. Last week, CMS officials announced that the Agency will not move forward with its controversial Medicare Part B Drug Payment Model. CMS explained that after considering strong stakeholder concerns about the mandatory demonstration, it has decided not to finalize the proposal to test alternative drug payment structures.  This decision drew praise from lawmakers on both sides of the aisle.   CMS Issues Final Rule on New, Mandatory Bundled Payment Models Despite criticism over its use of mandatory demonstrations, on December 20 CMS issued a final rule implementing several new, mandatory bundled payment models, and updating an existing model.  These models, which are considered Advanced APMs for purposes of the Medicare Access and CHIP Reauthorization Act (MACRA), include the following:

  • Advancing Care Coordination through Episode Payment Models. Beginning July 1, 2017, CMS will test three new cardiac and orthopedic episode payment models for heart attacks (“AMI Model”), heart surgery to bypass blocked coronary arteries (“CABG Model”), and surgery after hip fracture (“SHFFT Model”), and a new incentive payment model for cardiac rehabilitation services (“CR Model”).   These models are mandatory models – meaning acute care hospitals in certain selected geographic areas will be subject to the models’ new payment rules.  The duration of the models is until December 31, 2021.
  • Comprehensive Care for Joint Replacement Model.  As part of the same final rule, CMS finalized updates to the Comprehensive Care for Joint Replacement (CJR) Model to enable participating clinicians to qualify for the 5 percent MACRA incentive. The CJR model began in April 2016, and is a mandatory model.

More details on these models are available on the Innovation Center website.

CMS expands APM portfolio with new voluntary models.   In addition to the new mandatory APMs, CMS took several steps to expand the list of voluntary APM options for clinicians.  Starting next year, CMS will begin the application process for the following models:

  • Medicare ACO Track 1+ Model.  This new opportunity, beginning in 2018, will allow clinicians to join Advanced APMs to improve care and potentially earn the 5 percent MACRA incentive payment. According to CMS, the new Medicare ACO Track 1+ Model will test a payment model that incorporates more limited downside risk than is currently present in Tracks 2 or 3 of the Medicare Shared Savings Program in order to encourage more rapid progression to performance-based risk.
  • New Medicare-Medicaid ACO model.  The new initiative builds on the Medicare Shared Savings Program (MSSP), and through agreements with participating states will hold ACOs accountable for quality and cost of care furnished to Medicaid beneficiaries, including those dually eligible for Medicare and Medicaid. CMS is now accepting letters of intent from states that want to design certain state-specific elements of the model.  Once a state is approved by CMS to participate, a request for applications will be released to providers.  CMS announced this model on December 15.

CMS issues last major ACA rulemaking of the year.   On December 16, CMS posted the final 2018 Notice of Benefit and Payment Parameters, which implements a wide range of major policies for the Affordable Care Act health insurance exchanges.  The final rule outlines changes to the ACA risk adjustment model, standardized plan benefits and special enrollment periods among other topics. It is scheduled to be published in the Federal Register Dec. 22. The regulations will govern issuers offering plans in state marketplaces that begin on or after January 1, 2018.  CMS also posted a fact sheet summarizing key policies in the final rule.

Meaningful use penalties to affect 171,000 in 2017. In a recent notice, CMS said that it will impose penalties on about 171,000 Medicare providers in 2017 for failing to demonstrate meaningful use. Penalized professionals will see a 3 percent downward payment adjustment, up from 2 percent in 2016. The number of penalized doctors is down from 209,000 this year.