Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Medicare Proposes Bundled Payment Test for Cardiac Cases

By Kerry Young, CQ Roll Call

July 25, 2016 -- Medicare officials recently proposed a test program that would put many of the nation's hospitals on the hook financially for how well their patients fare after being treated for heart attacks or undergoing bypass surgery to replace damaged coronary arteries. This could potentially put the Obama administration at odds in its final months with two powerful groups, heart doctors, and hospitals.

More than 200,000 people enrolled in Medicare were hospitalized for heart attacks or underwent bypass surgery in 2014, costing the program more than $6 billion, Centers for Medicare and Medicaid Services (CMS) said. The amount Medicare paid for this care varied widely as did the numbers of people readmitted after their cardiac care, the agency said. With the proposal unveiled Monday, Medicare said it is seeking to reward the hospitals with the best results for their patients.

"The variation in cost and quality for the same surgery at different hospitals shows there are major opportunities for hospitals included in today's models to reduce costs, improve care, and receive additional payments by improving patient outcomes,"  said Patrick Conway, chief medical officer and acting principal deputy administrator of the Centers for Medicare and Medicaid Services, in a statement.

CMS also on Monday unveiled the details for a model to bolster people's recovery after heart attacks and related procedures, known as cardiac rehabilitation utilization. And the agency proposed an extension of a current bundled payment model for joint replacements to include other hip surgeries.

Under this plan, hospitals would be held accountable for the cost and quality of care provided to people in traditional Medicare who are admitted for heart attacks, bypass surgery and surgical treatment for fractures of the hip or a major leg bone known as the femur. Hospitals participating in the test would be paid a fixed target price for the care involved in these cases, CMS said.

CMS proposed giving hospitals time to adapt by allowing them to gain funding due to good performance more quickly than they will be punished for doing poorly. There would be no repayment for performance in the July 2017 to March 2018 period, while incentive payments for July 2017 to December 2018 of up to 5 percent would be available. By the 2020 to 2021 period, the penalties would be capped at 20 percent of payments as would be the potential gains, CMS said in a statement.

Crowded Agency Agenda

Speculation about a new CMS cardiac proposal circulated last week in Washington among medical organizations. Medical specialty officials raised concerns about how well CMS will manage simultaneously an ambitious slate of projects. CMS already is in the midst of devising a complex system of measurements for doctors' performance that Congress mandated through last year's overhaul of Medicare physician payments (PL 114-10). The new merit-based physician payments and advanced alternative payment models are part of this effort.

CMS on Monday said the newly unveiled proposal contains provisions that may address some of the concerns raised about the new merit-based incentive payment system. Many medical organizations have complained that CMS has offered too few chances for doctors to be exempt from the merit-based physician payments by qualifying for so-called advanced alternative payment models. The rule would create a track in the cardiac and hip-and-knee programs that could potentially qualify for the alternative pay models, CMS said.

The agency also had several major projects of its own design underway to try to link Medicare payment to judgments about the qualify of service provided. The 2010 health care law created the Center for Medicare and Medicaid Innovation and gave it an initial tranche of $10 billion for its operations. The center last month announced that nearly 200 medical practices and 17 insurance companies would participate in its Oncology Care Model, seeking to improve treatment of cancer patients. CMS last week said that almost 20,000 doctors and other health care practitioners would participate in the five-year test of a program meant to help them push people at risk of heart disease to make lifestyle changes.

Republicans have remained skeptical of the Innovation Center. The center's plan for testing an alternative payment for drugs given in doctors' offices had sparked significant backlash among GOP lawmakers. A House GOP health plan revealed in June calls for ending the Center. Rep. Tom Price, R-Ga., introduced a bill (HR 4848) that would delay the implementation of the hip-and-knee test through Jan. 1, 2018. Although the program already is in effect, Price is seeking to give hospitals more time to adjust the test model.

Publication Details