Providers say a CMS model to have 800 U.S. hospitals participate in a test of bundled payments for hip and knee replacements would have to be changed significantly in order to succeed.
The five-year program would begin Jan. 1. Nearly 300 comments on the proposal were received before the deadline last week. A leading concern was that it was mandatory, which groups said would prevent providers from tailoring care to their patient population and could result in less accurate payments.
“Nowhere does the law expressly state that CMS can make models mandatory,” the Federation of American Hospitals said. “There should be no mistake about what is happening here—(this model) represents a major change in Medicare payment policy.”
And the goal of the model is in fact to fundamentally change the way providers are paid. The CMS is aggressively looking to shift Medicare payments to alternate forms of care such as accountable care organizations and bundles.
The average Medicare payment for hip and knee procedures, the most common received by Medicare beneficiaries, ranges from $16,500 to $33,000, according to the CMS. In 2014, lower-extremity joint replacements cost Medicare more than $7 billion for the hospitalizations alone.
Most comments asked to delay implementation of the model until Jan. 1, 2017.
The Mayo Clinic noted that more time is needed to fully understand and implement the rule requirements and educate staff and beneficiaries.
The comments also questioned CMS' decision to appoint hospitals as the sole bearer of risk in an effort to study how well those providers could handle the financial consequences and gains. Spreading the risk among physicians and post-acute care and skilled-nursing facilities would empower them to dictate patient care and allow them to reap any financial awards should they meet metrics under the program.
Providers said the decision to exclude other providers could have a devastating impact on the initiative.
BayCare a Florida-based healthcare system said it could create potential conflicts between providers.
Hospitals also worry the model will draw staff away from hospitals that are in an area that was excluded but is just miles away from one that's participating.
“While we appreciate the agency's need to use geographic boundaries to identify groups of providers for participation, hospitals adjacent to the selected (areas) will be faced with different rules for physician and patient engagement that will place them at a competitive disadvantage,” Tenet Healthcare said in a comment.
Tenet suggested that the CMS provide a one-time opportunity for hospitals in counties adjacent to the selected regional areas to opt into the program.
Another key to success is granting hospitals waivers that will allow them to operate outside of federal kickback and physician self-referral laws. A similar permission has already been granted to Medicare Accountable Care Organizations.
Waivers to the federal anti-kickback statute and the federal physician self-referral law, also known as the Stark law, offer providers flexibility to enter into coordinate-care partnerships. The laws prohibit physicians from making referrals for services covered by government programs to entities in which they have financial interests unless they meet certain exceptions.
Providers say if this request is not fulfilled, it could be a deal breaker.
“Hospitals are supportive of the mandate, but it should not take effect unless and until the needed, explicit protections are in place and adequate time is given to form the necessary financial arrangements—as the administration is aware, the program cannot be successful for Medicare and its beneficiaries without them,” the American Hospital Association said.
It's likely the CMS will grant these protections to participating hospitals as the agency wants this model to proceed, said Seth Lundy, a partner in the Washington, D.C., office of King & Spalding.
Another wish that might be granted to providers is an extension to the launch date. But it's unlikely there will be major changes to the rule because the agency so badly wants to change payment and care models, said Brian Fuller, a vice president at Avalere Health.
“I think proverbial train has already left the station,” Fuller said.
A final rule is expected by November.