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CMS Finalizes Joint Bundled Payment, Outpatient Payment Changes

The Centers for Medicare & Medicaid Services (CMS) finalized cancellation of the mandatory hip fracture and cardiac bundled payment models that were to be operated by the CMS Innovation Center and implemented changes to the Comprehensive Care for Joint Replacement (CJR) bundled payment model. These changes will offer greater flexibility and choice for hospitals in providing care to Medicare patients, according to CMS.

“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 release. Ms. Verma expects to announce new voluntary bundles at a later, unspecified date. In the final rule, CMS reduced the number of mandatory geographic areas participating in CJR from 67 areas to 34. CMS is also making participation voluntary for all low-volume and rural hospitals in all 67 areas.

CMS is also finalizing cancellation of the hip fracture and cardiac bundled payment and incentive payment models—the Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model—that were scheduled to begin on January 1, 2018. Eliminating and modifying current models allows the agency more flexibility to design and test other approaches to improve quality and care coordination across inpatient and post-acute care. 

In addition, CMS is finalizing several technical refinements and clarifications for certain CJR model payment, reconciliation and quality provisions, and a change to the criteria for the Affiliated Practitioner List to broaden the CJR Advanced Alternative Payment Model track to additional eligible surgeons. This is likely a welcome addition by orthopaedic surgeons who have urged CMS to allow them greater control, i.e. decision making power and ownership, of alternative payments. . 

Moving forward, CMS expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory bundled payment models, according to the agency. Changes in the final rule will help position the agency to engage in future voluntary efforts. 

The final and interim final rules with comment (CMS-5524-F and IFC) can be downloaded here.

Companies with total knee replacement products should also stay engaged with surgeons about their site preference for procedures. CMS finalized earlier this year that it will cover knee replacement procedures at ambulatory surgical centers (ASCs). Medicare’s inpatient-only (IPO) list includes, as the name suggests, procedures that are only paid under the Hospital Inpatient Prospective Payment System. Each year, CMS reviews its IPO list to keep or discard procedures. For 2018, CMS is removing total knee arthroplasty.

Private payors have increasingly incentivized surgeons to move total knee procedures to outpatient settings in an effort to reduce cost and improve outcomes. Industry voices have indicated that as more surgeons and ASCs are able to meet or exceed those cost and outcome metrics, Medicare would follow, covering outpatient care.


Rob Meyer is ORTHOWORLD’s Senior Editor. Please send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..