Episode Payment Models: A Primer For Cardiology

It is undeniable that with the passage of Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and introduction of cardiovascular episode payment models (EPMs) along with the numerous Center for Medicare and Medicaid Innovation demonstration projects, we are heading towards a value-based health care system. MACRA received immense bipartisan support, unlike the Affordable Care Act (ACA). Hence, while one may ponder on the future of the ACA, MACRA and the move from traditional fee-for-service to value-based care is here to stay. This transition is occurring in all facets of our health care system including Medicare, Medicaid, commercial third party health insurers and state insurance programs. 

While the early innovative payment models were primarily focused on primary care services and providers, the Centers for Medicare and Medicaid Services (CMS) recently turned its attention to the medical specialties by releasing three cardiovascular EPMs: Acute Myocardial Infarction (AMI), Coronary Artery Bypass Graft (CABG) and Cardiac Rehabilitation (CR) along with a surgical hip and femur fracture treatment model.

“These EPMs offer an exciting opportunity for redesigning the care delivery of cardiac patients,” notes Cathleen Biga, MSN, RN, co-chair of the Cardiovascular Administrator Workgroup and a member of the Health Affairs Committee. “Caring for patients across the continuum, in a collaborative team environment, focused on quality and cost effectiveness will ensure our patients receive evidence based care in the best setting. While it’s difficult to transition from a fee-for-service world into a value-driven world, physician leadership will facilitate this transition.”

The developed models aren’t perfect, as noted by the ACC and many other groups, but CMS had differing opinions. For example, one of the central themes was the need to have homogenous populations in the EPMs thus limiting the AMI models to ST-elevation myocardial infarction (STEMI) patients and not including those with cardiogenic shock (and sepsis). While acknowledging the concerns, CMS laid out the opportunities for care design in the different populations of STEMI and NSTEMI with differential analysis of post records. However, CMS did change rules in response to the comments. One notable example of this is that CMS made it optional to have downside risk by making it voluntary in year 2 after concerns from the ACC that participants should be held harmless during the initial phases of the program.

Currently, these payment models are limited to 98 randomly pre-selected Metropolitan Statistical Areas (MSAs). While every ACC member will not be impacted, it will be vitally important for cardiovascular professionals to understand the payment models’ goals and structure. These types of bundled and EPMs are top of mind for many of the nation’s health insurers and could be developed by local health plans. Additionally, CMS and private payers tend to emulate other programs, especially if it is determined successful and results in cost savings.

In this emerging value-based environment, it is important for cardiovascular professionals and their organizations to be cognizant of their outcomes and the relative “cost” of that outcome. They will need to monitor and track their data, analyze them and use a myriad of resources from statistical, econometrical to clinical and administrative to not only stay within their target prices but also achieve acceptable outcomes.

“It will be vital going forward to have systems in place to know the true cost of care at the diagnosis and individual patient level, the impact pathways of care have on outcomes and cost, how adverse events affect both care and cost, and what we can do to effectively mitigate these events and use this data in the patient’s best interest”, says Keith Churchwell, MD, senior vice president, Heart and Vascular Center of Yale New Haven Hospital.

These resources will require not an insignificant investment from organizations. CMS plans to provide spending and utilization data and waive certain Medicare requirements. However, this will likely not be enough. It will be more important for organizations to learn from each other and use all the help they can, including those from specialty societies like the ACC.

“The mandated CMS episodes afford physicians a unique opportunity to lead their systems into this challenging process. While it is true the hospitals carry the financial risk in these bundles, physicians bring the clinical expertise to contain costs and improve outcomes,” says Biga.

What You Need to Know About EPMs

  • Hospitals within the 98 pre-selected MSAs will be participating for a performance period of July 1, 2017, to Dec. 31, 2021.
  • The acute-care hospitals are financially responsible for episodes.
  • Cardiovascular physicians and professionals will be paid for services based on current Part B rates.
  • Hospitals that achieve both an acceptable or better quality composite score as well as spend below the quality adjusted target price will be eligible to receive a reconciliation payment. 
  • AMI and CABG EPMs will allow clinicians to be able to qualify for Advanced Alternative Payment Models under MACRA.
  • Hospitals will receive an additional $25 for each CR or Intensive CR service for the first 11 services paid by Medicare, which will increase to $175 for each CR service after the 11th. 

By Sunny Jhamnani, MD, an ACC Emerging Advocate

Keywords: Centers for Medicare and Medicaid Services (U.S.), Fee-for-Service Plans, Insurance Carriers, Medicaid, Medicare, Medicare Access and CHIP Reauthorization Act of 2015, Patient Protection and Affordable Care Act, Cardiology Magazine


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