Alternative models of payment are a trending topic for the Centers for Medicare and Medicaid (CMS) as the agency hits the half-century mark. Given that the Secretary of Health and Human Services has specified a goal of moving 50 percent of Medicare payments to alternative payment models within the next two years, the health care system—and home health care as part of it—lies at a critical juncture. It is more important than ever to understand these new models, and several recent publications shed critical light.

In the November 19th issue of The New England Journal of Medicine, Paul Ginsburg and Alice Rivlin explored the challenges facing CMS in a changing healthcare delivery environment (available here). Given CMS’s commitment to alternative payment models and quality care initiatives, the health care delivery landscape of the future appears to be approaching more quickly than ever, and Ginsburg and Rivlin see this as an opportunity to improve both quality and efficiency.

Though CMS has been clear about making bundled payment arrangements a high priority alternative payment model, there are multiple programs and approaches that are testing bundled payments. The Center for Medicare and Medicaid Innovation’s (CMMI) Bundled Payment for Care Improvement (BPCI) initiative. BPCI aims to change both the delivery and payment of health care services, and consists of four different models under which the initiative operates. Models 1 and 4 refer to inpatient acute care hospital stays alone, but models 2 and 3 include either inpatient stay plus post acute or post acute care only. Health Affairs recently issued their policy brief focused on BPCI and the opportunities, concerns, and early findings from the program. The full brief is available online here.

Although BPCI is still underway, the newly finalized Comprehensive Care for Joint Replacement (CJR) Model will quickly disseminate bundled payments across the country. Starting on April 1, 2016, hospitals in 67 geographic, or metropolitan statistical areas (MSAs), will be mandated to bundle payments for all traditional Medicare MS-DRG 469 and 470 cases. The episode begins with the admission to a participating hospital and includes the 90 days of care post-discharge for all services paid under Medicare Parts A and B, with limited exceptions. The final rule for the CJR Model is available in the Federal Register here. The CJR model does not apply to those already in BPCI Models 1, 2, or 4.

Bundled payment and other alternative models of payment provide unique challenges and opportunities for home health care. The focus on higher quality, lower cost care puts home health care in a critical place in the health care delivery system. In general, home health care is least costly and patient preferred in post-acute care, and therefore of increasingly recognized importance.

As the healthcare landscape, and especially Medicare, continues to reinvent itself and push toward alternative models of payment and delivery, providers, policymakers, and those at CMS must continue to work together to ensure that quality care is not sacrificed for cost-effectiveness, and that patient-centered care remains at the forefront of this mission.

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