Issue link: https://beckershealthcare.uberflip.com/i/717576
48 CFO / FINANCE 10 Things to Know About CMS' Mandatory Cardiac Bundle By Emily Rappleye C MS proposed a mandatory bundled payment program for heart attacks and bypass surgeries in July that includes changes to the existing Comprehensive Care for Joint Replacement Model as part of its larger goal to shi Medicare from quantity to quality incentives. Here are 10 things to know about the proposed rule. 1. The new bundled payment models apply to cardiac care and extend the existing CJR model to include hip and fe- mur fractures. Medicare fee-for-service patients admitted for heart attacks and bypass surgeries are eligible for the new cardiac bundled payment program. 2. The bundle makes hospitals accountable for the cost and quality of care provided during the inpatient stay and for 90 days after discharge. Hospitals will be paid a fixed target price for each episode of care, and those that hit higher quality targets will qualify for a higher target price. At the end of each performance year, hospitals have an additional opportunity to earn shared savings based on how they performed in terms of their target price. 3. Hospitals will be chosen from 98 randomly-selected metropolitan statistical areas for the cardiac bundling pro- gram. Hospitals outside of these selected areas will not participate in the cardiac bundles. e hip/femur fracture bundles, which build on the existing CJR program, will be tested in the 67 MSAs already select- ed for the CJR model. Rural counties will be excluded, and financial risk will be limited for rural hospitals that fall into MSAs selected. 4. Under the proposed rule, the bundles are set to begin on July 1, 2017. CMS proposed implementing the program in phases to allow hospitals to adapt to the new model and establish processes to support it. Downside risk is not added in until the second quarter of the second performance year. Beginning April 2018, downside risk is capped at 5 percent. is cap increases to 10 percent in the third performance year, and then will phase up to a maximum of 20 percent in the fourth and fih performance years. Potential gains are also phased in. In the first two performance years, hospitals are able to earn a maximum bonus of 5 percent. ese potential gains then grow in step with downside risk, up to 20 percent in performance years four and five. 5. Hospitals will receive quality-adjusted target payments for each episode of care. ese target payments will be based on a blend of historical hospital specific and regional data, and adjusted based on case complexity. Hospital targets would also be adjusted for quality, so that hospitals delivering the best care have the opportunity to share in more savings. If hospitals do not meet the baseline stan- dards for quality, they cannot share in savings. 6. At the end of each performance year, hospitals that meet quality standards can earn additional payments based on cost. is means CMS compares the actual spending for each episode to the target prices paid to the hospital. ose that are able to deliver care for less than the target price are paid the achieved savings. Hospitals that exceed the target are required to repay Medicare. 7. The proposed rule also includes a model to test cardiac rehabilitation services. e model aims to test if payments incen- tivize use of cardiac rehabilitation during the 90-day period following hospital discharge. Payments of $25 per rehab service will be paid for the first 11 services given during the episode of care. e subsequent services are reimbursed at a rate of $175 per service. Sessions are lim- ited to a maximum of 36 sessions over 36 weeks, with the option to extend. Hospitals participating in the cardiac bundles, as well as those in an additional 45 geographic areas, will be eligible to participate. 8. CMS said the cardiac bundle, as well as the CJR bundle, could qualify as Advanced Alternative Payment Models in 2018 under the Medicare Access and CHIP Reautho- rization Act. e proposed rule for the cardiac bundle established pathways for physicians to potentially qualify under the Quality Pay- ment Program for Advanced APMs. is is the more lucrative track under MACRA, which determines physicians' Medicare payment ad- justments in place of the sustainable growth rate formula. e bundles would meet the requirements under the proposed rule for MACRA, meaning physicians could earn an additional lump-sum bonus. 9. Additionally, the proposed rule indicates that CMS plans to build on its Bundled Payments for Care Improvement Initiative. is includes a new voluntary bundled payment program that would begin in 2018, and could also potentially qualify as an Ad- vanced APM under MACRA. 10. CMS is taking feedback on the proposals until Sept. 24. n Steward Swings into Black in 2015 By Brooke Murphy S teward Health Care System reported operating income of $131 million in 2015 — the first time the Boston-based system has posted a profit since it was formed in 2011, reports The Boston Globe. Steward formed in 2011 to take over struggling hospitals formerly run by the Archdiocese of Boston. At the time, four of Steward's six hospitals were operating at a loss. Steward finally made it into the black last year after report- ing an operating loss of $75 million in 2014, according to the company's public filings obtained by The Boston Globe. The system's revenue increased by 1 percent year over year to $2.2 billion in 2015. Steward officials said the system's financial turnaround was partially attributable to a reduction in pension li- ability. After contributing nearly $300 million to cover pension liability inherited from the church, the system's financial statement showed a $132 million gain due to reduced pension expenses, according to the article. Steward has grown to become one of the largest health systems in Massachusetts, with nine hospitals. n