CMS Releases Advancing Care Coordination Through Episode Payment Models Proposed Rule

Please Note: The article below details the proposed rule. Read the final rule.

As part of its efforts to encourage coordinated care, improve the quality of care and decrease costs, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule on July 25 that introduces bundled payment models for cardiac services, as well as two other significant policies. Specifically, the Advancing Care Coordination through Episode Payment Models (EPMs) rule:

  • Creates new mandatory episode payment models (EPMs) for acute myocardial infarction (AMI) (triggered by admissions for AMI and admissions representing percutaneous coronary intervention treatment for AMI) and coronary artery bypass (CABG) for acute care hospitals.
    • The proposed rule also includes an EPM for surgical hip or femur fracture treatment.
  • Gives eligible clinicians, including physicians and non-physician practitioners, the opportunity to qualify as participating in Advanced Alternative Payment Models through EPMs (beginning in April 2018).
  • Introduces a cardiac rehabilitation (rehab) incentive payment to increase utilization of cardiac rehabilitation services for heart attack and bypass surgery Medicare beneficiaries

CMS will randomly select locations for implementation. Hospitals will not be able to apply to participate. Under the proposed rule, participation in EPMs and the cardiac rehab incentive payment would last for five years, beginning July 1, 2017 and running through Dec. 31, 2021. Performance assessment would occur at the end of each year.


For both AMI and CABG EPMs, the episode would begin upon inpatient admission to an anchor hospital. Care would include both medical and surgical services provided to the beneficiary during the inpatient stay through 90 days after discharge.

  • AMI Episode – triggered by admissions for AMI (MS-DRGs 280-282) or admissions representing PCI treatment for AMI (MS-DRGs 246-251) where the AMI ICD code can be a primary or secondary diagnosis
  • CABG Episode– triggered by claims for CABG (MS-DRGs 231-236)

Specific Services Included: Medicare Parts A and B

Proposed Beneficiary Exclusions Due to Overlap with Other CMS Programs: Beneficiaries would be excluded if they are in any bundled payments for care improvement (BPCI) model episode; involved in a Next Generation Accountable Care Organization Model or Comprehensive ESRD Care Model with downside risk; participating in a managed care plan; or under the care of a physician from a group practice that initiates BPCI Model 2 episodes for anchor MS-DRGs of AMI or CABG.

Financial Accountability: Acute care hospitals would be held financially accountable by CMS for all spending within the episode.

Geographical Areas Included: CMS would randomly select 98 Metropolitan Statistical Areas for mandatory implementation of EPMs. To be selected, participants must have had the following between Jan. 1, 2014 and Dec. 31, 2014:         

  • >75 AMI episodes
  • >75 AMI episodes attributable to AMI, CABG or PCI episodes as part of the BPCI Model  2 and 4
  •  <50% of otherwise qualifying episodes attributable to a BPCI Model  2 or 4 AMI, CABG or PCI episode

Beneficiary Notification: Participant hospitals and collaborators would be required to provide written notice.

Quality and Reporting: To receive payment, participants must meet quality targets. Participants would receive a composite quality score based on the metrics below.

AMI Episode: 

  • Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following AMI Hospitalization (NQF #0230) based on at least 25 cases
  • Excess Days in Acute Care after Hospitalization for AMI based on at least 25 cases
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey (NQF #0166) based on at least 100 surveys during four consecutive quarters of data
  • Voluntary: Hybrid Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following AMI Hospitalization (NQF #2473)

CABG Episode:

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

Payment: EPMs are retrospective payment models. CMS would set target prices using a combination of historical hospital-specific data and regional data, adjusting for complexity of treatment. Payment occurs through a phased-in approach. For year one through the first quarter of year two, potential exists for a gain of up to 5 percent with no downside risk. Varying amounts of downside risk would be introduced beginning the second quarter of year two (April 2018) with participants having to repay up to 5 percent through year two. In year three, participants would either gain or repay up to 10 percent and in years four and five, the amount would increase to 20 percent. 

Evaluation: CMS would evaluate EPMS based on quality during the episode, after the episode ends, and for longer durations. CMS would examine outcomes and patient experience measures.

For additional information, visit CMS’ website.


CMS proposes that through participating in EPMs for AMI and/or CABG, eligible clinicians can choose to qualify as participating in an Advanced APM beginning in April 2018, if they:

  • Meet CEHRT use requirements in the Quality Payment Program as outlined in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), maintaining documentation on use and attestation
  • Keep an up-to-date list of financial arrangements under the EPM and submit to CMS quarterly


Payment: This is a retrospective payment based on total cardiac rehab use of beneficiaries attributable to participant hospitals:

  • For each of the first 11 services, an initial payment $25 per service
  • Afterwards, payment increases to $175 per service

Standard Medicare payments for cardiac rehab services for beneficiaries in the model would continue to be made directly to those providers.

Eligibility: CMS would select hospital participants in 90 geographic areas, half of which would be areas chosen for EPM implementation while the other half would be areas not chosen for EPM implementation.

For additional information, visit CMS’ website.

Keywords: Accountable Care Organizations, Centers for Medicare and Medicaid Services, U.S., Coronary Artery Bypass, Diagnosis-Related Groups, Group Practice, Health Personnel, Hospitalization, Inpatients, International Classification of Diseases, Kidney Failure, Chronic, Managed Care Programs, Medicaid, Medicare, Medicare Part A, Myocardial Infarction, Percutaneous Coronary Intervention, Angiography, Medicare Access and CHIP Reauthorization Act of 2015

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