CMS proposes to scale back scope of bundled payment model for joint replacement, cancel other mandatory bundled payment models

The Centers for Medicare and Medicaid Services (CMS) on Thursday, August 17, 2017, published a proposed rule that would reduce the number of geographic areas where hospitals and clinicians would be required to participate in the Comprehensive Care for Joint Replacement (CJR) bundled payment model focused on knee and hip replacements, and cancel cardiac and other orthopedic bundled payment models that are scheduled to begin on January 1, 2018.

As a member of Congress and in his confirmation hearings as Secretary of the Department of Health and Human Services (HHS), Secretary Tom Price raised concerns about regulations issued by the Obama Administration to test the orthopedic and cardiac bundles payment models in so many geographic areas on a mandatory basis.

The CJR model began April 1, 2016, with hospitals in 67 metropolitan statistical areas (MSAs) that generally were required to participate. Under the proposed rule, CMS would reduce the number of MSAs where hospitals would be required to participate in the model to the 34 MSAs with the highest average wage-adjusted payments for lower extremity joint replacements. In addition, CMS is proposing to remove rural hospitals from the CJR model in the 34 MSAs where participation would continue to be required, effective February 1, 2018.

Hospitals in the 33 MSAs where participation in the CJR model would no longer be required and rural hospitals in the 34 MSAs where participation would continue to be required would be able to opt in to continue to participate in the model. The voluntary participation election period would begin January 1, 2018, and end January 31, 2018, to allow for hospitals to opt in to continue to participate in the CJR model without interrupting performance year 3 beginning January 1, 2018.

The CJR model is scheduled to run through December 31, 2020.

The proposed rule also would cancel bundles payment models focused on acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT), as well as a cardiac rehabilitation incentive program.

CMS had included the CJR, SHFFT, CABG and AMI bundled payment models on the list of models that were expected to be considered advanced alternative payment models (AAPMs) for purposes of the Quality Payment Program (QPP) under the Medicare Access and CHIP Reauthorization Act (MACRA). In proposing to cancel the SHFFT, CABG and AMI models, CMS stated that “providers interested in participating in bundled payment models may still have the opportunity to do so during calendar year (CY) 2018 via new voluntary bundled payment models.” The proposed rule states that the Center for Medicare and Medicaid Innovation expects to develop new voluntary bundled payment models in 2018 that would meet the criteria to be considered an AAPM under MACRA’s QPP.

Comments on the proposed rule are due to CMS by October 16, 2017.


Anne Phelps
Principal | Deloitte Risk and Financial Advisory
US Health Care Regulatory Leader
Deloitte & Touche LLP
Latest conversations from Anne Phelps on Twitter

Daniel Esquibel
Senior Manager | Deloitte Risk and Financial Advisory
Deloitte & Touche LLP

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