The Centers for Medicare & Medicaid Services (CMS) on Thursday finalized the cancellation of the mandatory hip fracture and cardiac bundled payment models, and in the same move, also implemented changes to the Comprehensive Care for Joint Replacement (CJR) model.

Specifically, CMS is reducing the number of mandatory geographic areas participating in the CJR model, from 67 areas to 34 areas.

Further, the agency is making participation voluntary for all low-volume and rural hospitals participating in the model in all 67 areas—an effort the agency says is an “ongoing commitment” to address the unique needs of rural providers.

This regulation also provides for an Interim Final Rule with Comment Period, whereby CMS is establishing and seeking comment on a final policy to “provide flexibility” in establishing episode costs for participant hospitals located in areas are impacted by “extreme and uncontrollable circumstances.” Examples of these regions include those that were impacted by the recent Hurricanes Harvey and Irma, according to CMS.

Cancellation of two bundled payment models

In addition, CMS has canceled the hip fracture and cardiac bundled payment and incentive payment models, also known as the Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model.

The final move fulfills the agency’s proposal in August to cancel the bundles, which stakeholders in the industry believed were being implemented too fast.

The models, which were scheduled to begin on January 1, 2018, were originally planned to be operated by the CMS Innovation Center.

Skilled nursing providers have long been concerned about bundled payment programs, which they believe will incentivize hospitals to coordinate care with in-home post-acute care providers, in lieu of sending them to an inpatient SNF.

The cancellation of these models gives CMS “greater flexibility” to construct and pilot other programs that will enhance quality and care coordination across the inpatient and post-acute care spectrum, according to the agency.

“While CMS continues to believe that bundled payment models offer opportunities to improve quality and care coordination while lowering spending, we believe that focusing on developing different bundled payment models and engaging more providers is the best way to drive health system change while minimizing burden and maintaining access to care,” CMS Administrator Seema Verma said in a statement. “We anticipate announcing new voluntary payment bundles soon.”

Written by Carlo Calma