Health Information Management

Tip: Analyze CMS' proposed bundled payment model

APCs Insider, November 6, 2015

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The idea behind CMS’ Comprehensive Care for Joint Replacement model is that payments for hip and knee replacements would be bundled for an entire episode of care, from the inpatient hospitalization procedure/surgery (called the anchor hospitalization) through 90 days after discharge. Payments would be based on quality measures that rate the effectiveness of the patient's treatment and recovery.
Each episode would be defined by the admission of a Medicare beneficiary to a facility paid under the IPPS that results in a discharge paid under MS-DRG 469 (Major joint replacement or reattachment of lower extremity with major complications or comorbidities) or 470 (Major joint replacement or ­reattachment of lower extremity without major complications or comorbidities).
Part A and B services related to the episode for 90 days following discharge would be included in the episode. Every year during the five performance years of the demonstration, which would begin January 1, 2016, CMS would set an expected price for the episode based on historic information and a 2% payment reduction (CMS taking a 2% cut right off the bat) for each hospital, but it will pay all providers and suppliers under the usual payment systems and then settle up later.
At the end of the year, the actual amount spent/paid for the entire episode would be compared to the episode price CMS set, and depending on quality and performance outcomes, hospitals may receive additional payment or be required to send money back to CMS.
This tip is adapted from “Providers need more time to analyze CMS' proposed bundled payment model" in the November issue of Briefings on APCs.

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