Executive Order's Effect on Bundled Payment Rule Unclear

CMS’ rapid movement toward bundled payment models in the waning months of the Obama administration may be for naught, as it appears President Donald J. Trump’s executive order to halt all things related to the Affordable Care Act could delay or reverse changes that became final just before he took office.

A new rule that created bundled payments in cardiac care and expanded them for hip and knee replacements became final December 20, 2016, but it could be postponed because it has not taken effect, according to an interpretation from the Congressional Research Service (CRS). The memo calls for agencies to postpone for 60 days any new regulations that have been published in the Federal Register, but not implemented. The CRS memo was first reported by Inside Health Policy, a Washington, DC, news service.

As of Tuesday, a webinar for February 9, 2017, to explain the new rule is still listed on CMS’ website. The overall rule is set to take effect February 18, 2017. The Cardiac Incentive Payment Model is scheduled to launch in 98 markets on July 1, 2017.

Bundled payments in cardiac care were proposed in July 2016 and did not catch the healthcare community by surprise, even though some hospital groups asked whether CMS was pushing too much change too quickly. The cardiac care regulation calls for bundled payments in acute myocardial infarction and coronary artery bypass graft. The other part of the rule affects the Comprehensive Care for Joint Replacement (CJR) program that had just taken effect in April 2016, only 3 months before the expansion was proposed.

US Representative Tom Price, R-Georgia, who faced a Senate hearing today on his nomination to lead HHS, is a known critic of the laboratory for bundled payment models: the Center for Medicare and Medicaid Innovation (CMMI). Price wrote a letter to CMS officials last fall arguing that CMMI had exceeded its authority in implementing bundled payments. “We insist CMMI stop experimenting with Americans’ health, and cease all current and future planned mandatory initiatives within the CMMI,” he wrote in the letter.

Worth noting, is that Price is an orthopedic surgeon who previously served as medical director for the orthopedic clinic at Grady Memorial Hospital in Atlanta. Price is also a critic of the Medicare Access and CHIP Reauthorization Act (MACRA), despite its overwhelming support from both parties. Price has said MACRA could harm the “patient-doctor relationship.”

CMS targeted joint replacements and cardiac procedures because of shared characteristics: they are common, they are expensive, and there was too much variation in cost. Heart disease accounts for 1 in 7 deaths in the United States and costs the nation $316.6 billion. In 2014, Medicare spent $6 billion just on hospitalizations for heart attacks, and cost variation was as high as 50%. The CJR initiative was designed to reduce the $7 billion spent on 400,000 procedures in 2014, which varied in cost from $16,500 to $33,000.