AMGA Voices Concerns Over Cardiac Care Bundled Payments Model

October 04, 2016 - With the comment period on a proposed cardiac care bundled payments model closing earlier this week, the American Medical Group Association (AMGA) penned a letter to CMS Acting Administrator Andy Slavitt critiquing the mandatory Medicare demonstration.

In July, CMS proposed a compulsory bundled payments model demonstration for several cardiac care episodes, including heart attack and bypass surgery, in select geographic areas. The rule would also expand the episodes included in the Comprehensive Care for Joint Replacement demonstration.

However, AMGA advised CMS to change several provisions of the new model, such as establishing appropriate financial benchmarks, adjusting benchmarks for patient-specific risk factors, and coordinating care with other Medicare accountable care programs.

The industry group proposed that accountable care organizations (ACOs) spearhead the bundled payments model for their assigned beneficiaries. ACOs could use their care coordination and management experience to successfully implement the new model.

CMS admitted in the proposed rule that it has faced challenges with attributing shared savings and quality of care changes for beneficiaries that are assigned to bundled payment models and other accountable care programs. Therefore, the proposed rule does not establish standard model requirements that would fairly distribute savings among various models for overlapping beneficiary care.

In response, AMGA advised the CMS to allow Medicare Shared Savings ACOs as well as ACOs that are not enrolled in the Comprehensive Care for Joint Replacement (CJR) demonstration to participate in the upcoming bundled payments models.

“This would mean the ACO would be the entity held accountable for Part A and Part B spending during the 90-day EPM and that the ACO could collaborate and gain share with an acute hospital and post-acute providers,” the letter stated.

The organization also called on CMS to establish more appropriate financial benchmarks in the cardiac care bundled payments model. CMS would set benchmarks using three years of historical spending data adjusted for quality, then gradually implement regional spending trends over five years. The benchmarks would be updated every performance year.

AMGA, however, contended that annual benchmark updates would perpetuate the same problem that ACOs experienced with having to continuously improve historical financial performance. Some providers have found it difficult to significantly lower spending below a targeted budget every year, so the AMGA suggested that CMS use three years of historical spending data to establish benchmarks for the five years of the demonstration.

In addition, AMGA urged CMS to reconsider its risk adjustment policy for the proposed bundled payment models. The federal agency stated that it will not make risk adjustments based on demographic or clinical indicators because Hierarchical Condition Category (HCC) scores for estimating Medicare spending on cardiac care episodes have not been calculated.

The organization, however, advised CMS to determine risk adjustments using demographic and clinical factors, especially in light of a September Health Affairs study that showed “no significant association between reconciliation payments and CMS-HCC risk scores when target prices were set using a hospital's historical spending.”

AMGA also criticized the federal agency’s proposed quality measures and demonstration evaluations. Under the cardiac care bundled payments model, CMS would use a composite quality scoring approach that would reflect relative scoring and year-over-year improvement. The federal agency would use patient outcomes and experience measures to assess providers.

While AMGA recognized the necessity of performance evaluation, the organization advised CMS to avoid using the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey because it reflects the experience of the entire hospital population. Instead, the federal agency should develop a more targeted, demonstration-specific survey.

The organization also asked CMS to clearly define how it plans to differentiate quality performance when adjusting benchmarks for quality discounts. AMGA stressed that differentiating observed and expected performance can be problematic because over 95 percent of hospital acute myocardial infarction and coronary artery bypass graft mortality rates report the same rates as the national average. To resolve the issue, CMS should use a socio-demographic variable when measuring quality, AMGA advised.

Additionally, AMGA recommended that CMS include the following evaluations to assess the success of the proposed bundled payment model:

• If, and how much, demonstration participants stint on care, especially the extent to which participants are matching surgical hip and femur fracture treatment devices to patient needs

• Extent of patient shared-decision making to ensure appropriate implants are selected

• If providers stint care by delaying treatments beyond the 90-day episode period

• How providers are working to succeed under the demonstration, such as care delivery and practice transformations

• How much bundled payments episodes compromise ACO earned shared savings success

• To what extent unwarranted regional variations affect providers, such as increasing the number of episodes to make up for lower reimbursement rates

• Frequency of, and reasons for, re-hospitalizations as well as drug utilization, hospital and post-acute infections, and cardiac rehabilitation and intensive cardiac rehabilitation utilization evaluations

• Historical and regional spending performance comparisons with and without patient-specific risk scores

• How reconciliation and gain sharing payments are used by participants and care collaborators, especially how hospitals budget for Medicare repayments

The American Hospital Association (AHA) also criticized the proposed bundled payments demonstration. The industry group expressed concern that CMS is moving too fast with payment reform implementation, including the proposed cardiac care bundled payment model.

“[W]hile we are mindful of the Department of Health and Human Services (HHS) Secretary’s goals for moving to alternative payment models, this proposed rule raises serious concerns about the agency’s pace of change, as well as its ability to accurately track and process the outcomes of its myriad increasingly complex alternative payment models,” the AHA letter to CMS stated.

The AHA suggested that CMS avoid expanding the mandatory bundled payment models to other geographic locations or conditions until the federal agency and participants have had time to evaluate lessons learned from existing bundled payments demonstrations, such as the Comprehensive Care for Joint Replacement program, which was launched in November 2015.

The organization also recommended that CMS refrain from implementing cardiac care bundled payments models in the same geographic areas as the Comprehensive Care for Join Replacement demonstration. Using the same areas may overload providers who are trying to manage multiple alternative payment models.

“We have supported CMS's reform efforts many times, but cannot support efforts such as these that prioritize speed over learning and evaluation,” the AHA stated.

Dig Deeper:

• How to Overcome the Challenges of Bundled Payment Models

• Understanding the Basics of Bundled Payments in Healthcare