CMS Delays Expansion of Bundled Payment Programs

On March 20, 2017, the Centers for Medicare & Medicaid Services (“CMS”) published an interim final rule (the “Interim Final Rule“) effectively postponing the start date of CMS’s new episode payment models (“EPMs”) and the Cardiac Rehabilitation Incentive Payment Model (“CR Incentive Model”) from July 1, 2017 until October 1, 2017. The Interim Final Rule also delayed the start date of recent changes to the Comprehensive Care for Joint Replacement Model (“CJR Model”) until October 1, 2017.

Background

On December 20, 2016, CMS published a final rule (the “EPM Final Rule”) creating three new EPMs covering services provided to Medicare beneficiaries admitted to certain Inpatient Prospective Payment System hospitals for heart attacks, coronary bypass surgery or surgical treatment of hip or femur fractures. The EPM Final Rule also created the CR Incentive Payment Model and amended several CJR Model regulations. For a detailed analysis of the EPM Final Rule and the CJR amendments, click here.

As originally published in the Federal Register, the EPM Final Rule included an effective date of February 18, 2017 for all provisions except for certain amendments to the CJR regulations, which were to become effective July 1, 2017. All EPM Final Rule regulations had an applicability date (i.e., the start date) of July 1, 2017. On January 20, 2017, the Trump administration issued a memorandum, “Regulatory Freeze Pending Review,” which encouraged all government agencies that had issued regulations that had not yet taken effect to temporarily postpone effective dates of such regulations for 60 days. Pursuant to the Regulatory Freeze, CMS issued a final rule on February 17, 2017 delaying the effective date for the EPM and CR Incentive Payment Model regulations until March 21, 2017 but leaving the applicability date of July 1, 2017 unchanged.

Delayed Effective and Applicability Dates

The Interim Final Rule further delays the effective dates and corresponding applicability dates for the EPMs, CR Incentive Payment Model and the revised CJR regulations, as follows.

The new effective date of the EPM regulations is now May 20, 2017.
The effective date of the amendatory provisions for the CJR Model has been postponed to October 1, 2017.
The start date for the EPMs, CR Incentive Model and revised CJR regulations has been delayed for an additional three months, from July 1, 2017 to October 1, 2017.

CMS noted that the additional three-month delay is necessary to allow time for additional review to ensure that CMS has time to undertake notice and comment rulemaking to modify the policy if modifications are warranted and that hospitals have a clear understanding of the governing rules and are not required to take needless compliance steps due to the EPM Final Rule taking effect for a short duration before any potential modifications are effectuated.

Practical Takeaways

CMS reiterated its commitment to providing sufficient time between establishing final model parameters and beginning of the EPMs to allow participants to adequately prepare for implementation. CMS has requested public comment on the possibility of further delaying the start date of the CR Incentive Payment Model and the EPMs until January 1, 2018 in order to provide participants with more time to prepare for these models and to align payment periods with the calendar year. A January 1, 2018 start date may be likely, given that an October 1, 2017 start date would result in Performance Year 1 only lasting three months. If CMS were to delay the model start date to January 1, 2018, the conforming CJR regulations would also be delayed so that the effective dates of those changes would remain aligned with the start date of the EPMs.

All comments must be received by 5:00 PM on April 20, 2017. If you are interested in submitting a comment or have questions about the implications of the Interim Final Rule, please contact: