On Thursday, November 30, 2017, CMS a final rule that cancels the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) Incentive Payment Model. The rule also makes participation in the Comprehensive Care for Joint Replacement (CJR) model optional for hospitals located in some areas of the country. The initial proposed rule was released in August 2017 after CMS had already delay implementation of the models.

Episode Payment Models and Cardiac Rehabilitation Models Cancelled

CMS is finalizing its proposal to cancel both the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) Incentive Payment Model. The EPMs were for acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFTT). These models had been scheduled to begin January 1, 2018.

CMS states that the majority of public commenters were supportive of cancelling the EPMs but that many of the commenters noted that they were generally supportive of shifting towards value-based models. Commenters also expressed concern over how stakeholder feedback was incorporated and the timeframe for finalizing EPMs. However, the rule also notes that many commenters objected to the outright cancellation of the models, suggesting that the models should instead be offered on a voluntary basis.

CMS Scales Back the Comprehensive Care for Joint Replacement Model

With this final rule, CMS is finalizing its proposal to make participation in the CJR model voluntary for hospitals in 33 of the 67 Metropolitan Statistical Areas (MSAs), remaining mandatory in the other 34 MSAs. Exceptions will be made for low-volume and rural hospitals in the 34 mandatory MSAs. The 33 voluntary MSAs were selected based on their lower wage-adjusted episode payments. A full list of the mandatory participation MSAs is in Table 1 of the final rule while the list of voluntary MSAs is contained in Table 2.

Many commenters were supportive of making CJR voluntary in certain geographic areas while some objected. However, some of those supportive commenters requested that the model be made voluntary in all 67 of the MSAs.

In addition, CMS will hold a one-time participation election period for hospitals located within one of the 33 voluntary MSAs. The period will begin on January 1, 2018 and end on January 31, 2018. A hospital’s participation election letter will serve as the model participant agreement.

Rule Contains Interim Final Rule to Address Areas Hit by Recent Natural Disasters

Within this final rule, CMS included an interim final rule with comment period that looks to provide flexibility in the determination of episode costs for CJR hospitals located in areas impacted by extreme and uncontrollable circumstances. This includes areas impacted by the recent hurricanes as well as the California wild fires. Actual episode payments for affected hospitals will be capped at the target prices for non-fracture episodes with a date of admission on or within 30 days before the beginning of the emergency period and for fracture episodes with a date of admission on or within 30 days before or after the beginning of the emergency period.