Value. Quality. Innovation.

Sign Up for Updates:

News Roundup: November 20, 2015

Medicare keeps test of joint-replacement bundles mandatory

Published by Modern Healthcare
By Virgil Dickson
November 20, 2015

The CMS has finalized a rule (PDF) that will require hospitals in 67 geographic areas, including Los Angeles and New York City, to participate in a test of bundled payments for hip and knee replacements.

The procedures are among the most common that Medicare beneficiaries receive, and the price varies significantly. The average Medicare payment for surgery, hospitalization and recovery ranges from $16,500 to $33,000, the CMS said in a news release announcing the initiative, which would be administered by the CMS Innovation Center.

Originally the program, called the Comprehensive Care for Joint Replacement Payment Model, was going to require 800 hospitals in 75 regions to participate in the new model, but the agency decided to omit eight regions to exclude ones that have too few total joint-replacement cases that aren't already covered under the similar but voluntary Bundled Payments for Care Improvement (BPCI) initiative.

Regions that no longer have to participate in the new program include Colorado Springs, Colo., Richmond, Va., and Las Vegas.

Despite including fewer areas, the CMS actually expects to save more than twice as much money as before. It now expects to save $343 million over the five performance years of the model, compared with $153 million projected earlier.

The much higher estimate is attributed to technical changes to the model outlined in the final rule, as well as updates to the data used to determine the impact of the rule.

A leading concern among critics of the proposal was that making the model mandatory would prevent providers from tailoring care to their patient population and could result in less accurate payments.

“Nowhere does the law expressly state that CMS can make models mandatory,” the Federation of American Hospitals said. “There should be no mistake about what is happening here—(this model) represents a major change in Medicare payment policy.”

The CMS disagreed. “The statute does not require that models be voluntary, but rather gives the secretary broad discretion to design and test models that meet certain requirements as to spending and quality,” it says in the final rule.


Stakeholders urged delay

It also noted that the CCJR isn't the only mandatory bundle pay initiative. The Home Health Value-Based Purchasing model outlined in the 2016 Home Health Prospective Payment System Final Rule will be mandatory for home health agencies starting Jan. 1, 2016.

Most organizations submitting comments on the proposed regulations asked the agency to wait until Jan. 1, 2017, to implement it.

The Mayo Clinic, for instance, argued that it needs more time to fully understand and implement the requirements and educate its staff and patients.

The CMS did postpone the program but pushed it back just three months, to April 1, 2016, saying that should give hospitals enough time to prepare.

The American Hospital Association said in a statement that it appreciates the delay but remains “concerned that hospitals will still be pressed to put in place the processes and procedures necessary for the program.”

The agency also said it would issue a notice along with HHS' Office of Inspector General granting participants leeway under the federal kickback and physician self-referral law (PDF), known as the Stark law. Similar waivers were extended to accountable care organizations participating in the Medicare Shared Savings Program.

Providers argue the fraud and abuse laws would make it legally complicated for them to enter into the necessary coordinated-care agreements with one another. The laws generally prohibit physicians from making referrals for services covered by government programs to entities in which they have financial interests unless they meet certain exceptions.

In 2014, approximately 430,000 Medicare beneficiaries had discharges for lower-extremity joint replacements, costing Medicare more than $7 billion for the hospitalizations alone.

The CMS estimates that the new bundled-payment test will cover about 23% of the hip and knee replacements that Medicare pays for, which is down from 25% in the proposed rule.

The program would put about $1.2 billion in Medicare spending in the new bundles in 2016, and that figure would grow to $2.9 billion in episode spending in 2020.

CMS Downsizes Bundled Payment Program for Joint Replacements

Published by Home Health Care News
By Amy Baxter
November 20, 2015

Home health agencies already partnered with hospitals may soon benefit after the Centers for Medicare & Medicaid Services (CMS) finalized a rule to incentivize hospitals to work with other post-acute providers for knee and hip replacement procedures.

Bundled payments will go into effect for 67 hospital locations for patients who undergo knee and hip replacement surgeries, CMS ruled Monday. This is fewer than the 80 originally floated. All post-acute care will be included in the episode of care, according to the rule.

For home health agencies, the ruling incentivizes coordinated care, as hospitals are responsible for an entire episode of care, including the following 90 days after a discharge. Hospitals can benefit in the form of incentive payments once the episode of care is over if the cost of care is below a benchmark price. However, hospitals participating in the bundle payment models will have to pay a reconciliation fee should the amount exceed Medicare’s benchmark.

The replacement surgeries are the most common inpatient surgery type for Medicare beneficiaries with sometimes lengthy recovery and rehabilitation periods. Hospitalizations from hip and knee replacements reached $7 billion in 2014, according to the agency.

The new CMS model is a a way for the agency to test a significant shift toward new payment methods, though hospitals and post-acute providers will still utilize fee-for-service.

Bundled payments hold organizations financial accountable for an episode of care, according to CMS, and push the health care system toward a more coordinated delivery of care model between hospitals and home health agencies.

The new regulations will take effect January 15, 2016 and will become appiclable April 1, 2015, when the first model performance period begins, CMS stated.

House calls help hospitals reduce re-admittance rates

Published by The Detroit News
By Leah Borst
November 20, 2015

Shortly after 93-year-old John Lesage was released from McLaren Macomb Hospital for double pneumonia, three paramedics were at his doorstep.

Not because he had a relapse. The crew was there to make sure Lesage understood what he needed to do to stay healthy.

“They helped me with my medications,” Lesage said. “They explained everything to me.”

Lesage is part of a trial program in Macomb County where some patients released from McLaren and Henry Ford Macomb hospitals get regular visits from a Medstar Ambulance Service paramedic crew to make sure patients are following doctors’ instructions and avoid readmission.

Lesage said he didn’t understand all the instructions his doctor gave him before being released. “I think they have saved my life,” he said of the paramedics.

“Once a (hospital) patient is told they are going home, there is a string of people handing them paperwork, giving them new medications and directions,” said Kolby Miller, CEO of Medstar, which is running the trial Mobile Health Paramedic program. “Then, the patient goes home and can’t remember everything.”

The in-home support, the first such program in Macomb County, was prompted by new Medicare rules that say the federal program will no longer reimburse hospitals for patients re-admitted to the hospital within 30 days of discharge for the same conditions.

“One of the highest numbers of readmissions is related to heart failure,” said Chris Starke, McLaren Macomb’s director of clinical organization effectiveness. “Since the program has started, we’ve had zero readmissions of the patients participating in the program.”

“We are a resource that some patients haven’t had before,” Miller said. “Our program helps build the transitional bridge between the patient, the hospital and the primary care physician.”

The program serves patients with chronic heart failure and chronic obstructive pulmonary disease in Medstar’s Macomb County service area. Within a month of discharge, about 24 percent of CHF and COPD patients return to the hospital with symptoms, according to Miller, the majority due to the patients’ failure to follow up with their doctor.

The average cost per hospital visit for a patient with chronic heart failure is $17,000, according to Medicare statistics.

Mobile Health paramedics visit patients in their homes every day for the first two weeks, then every other day for the rest of the month-long monitoring period. The paramedic evaluates the patient’s vital signs, medications and discusses follow up with the primary care physician.

Cost savings potential

In time, the program could offer huge cost savings for the hospitals. Miller estimates it could keep 180 patients from being re-admitted, saving $3 million annually between the two hospitals.

Similar programs are on the rise as hospitals across the nation come up with new ways to reduce readmissions to avoid financial penalties under the Affordable Care Act.

Community EMS in Southfield began a mobile health program with Botsford Hospital to have paramedics visit chronic disease patients before they end up at the hospital. Huron Valley Ambulance is testing a pilot program in Livingston County to determine if ambulance runs could be replaced by paramedic visits for non-life-threatening 911 calls.

The Mobile Health Paramedic program in Macomb has enrolled about 40 volunteer patients since launching in July.

There is no cost to patients because McLaren Macomb, Henry Ford Macomb and Medstar are covering the costs.

Lesage’s daughter, Connie, 64, has lived with and cared for her father since her mother died of cancer three years ago.

“The (paramedics) just talk to him and he listens to them,” Connie Lesage said. “They make him smile. They help with his medications … There’s things he’s stubborn about and they just talk him into it. (The paramedics) treat us like family; I wish we could keep them (longer than the 30-day program).”

Keeps ‘patients on track’

The Macomb County EMS Medical Control Authority and the Michigan Department of Community Health EMS Division approved the 180-day trial program to evaluate its effectiveness. The trial phase ends in December.

“It meets the objective to provide care for the patient and helps keep patients on track,” said Deborah Condino, EMS Medical Control Authority executive director. “EMS agencies — both public and private — are less excited about this program because it may take away some of their business. Yet, if it is done well, it will ultimately reduce the number of transports to the hospital and change the landscape for EMS.”

She said other EMS agencies in the county have shown interest in creating similar programs, but municipal agencies don’t have the same relationships with the hospitals. McLaren Macomb and Henry Ford Macomb co-own Medstar.

“It’s not impossible (for municipal agencies), but it’s different than a private agency already owned by the system,” Condino said.

Miller believes the program eventually will expand into other service areas and cover additional illnesses.

“I like to imagine a day that we can do well baby checks, administer immunizations, remove stitches,” he said. “I think we’ll find that using paramedics is showing a pretty clear look into the future.”