CMS Announces Additional Episode Payment Models (EPM)

Authored by: Mark Ross, Sophie Campbell, Mark Baron and Louis Shiber

On Dec. 20, 2016, the Centers for Medicare and Medicaid Services (CMS) announced and finalized new Innovation Center models, which perpetuates the administration’s goal to shift provider payment models from fee-for-service models to value-based care models.

The latest models are focused on improving cardiac and orthopedic care services through the following payment models:

  1. Acute Myocardial Infarction (AMI) Model
  2. Coronary Artery Bypass Graft (CABG) Model
  3. Surgical Hip and Femur Fracture Treatment (SHFFT) Model
  4. Cardiac Rehabilitation (CR) Incentive Payment Model

These EPMs are effective for participating hospitals with admissions on or after July 1, 2017.

Acute care hospitals in the CMS selected Metropolitan Statistical Areas (MSA) will be required to participate. CMS has designated 98 MSAs for the AMI and CABG Models, 67 MSAs for the SHFFT Model (the same MSAs designated for the Comprehensive Care for Joint Replacement (CJR) Model), and 90 MSAs for the CR Incentive Payment Model, which are comprised of 45 MSAs selected for the AMI and CABG Models, along with an additional 45 MSAs– reference link for MSA list https://innovation.cms.gov/initiatives/epm.

Similar to the CJR Model, the hospital is financially responsible for the quality and cost of an episode of care, which incentivizes the efforts for care coordination among hospitals, physicians, and post-acute care providers. The treatment and services provided for the AMI, CABG, and SHFFT Models begin with a hospitalization and extends for 90 days following hospital discharge.

The CR Incentive Payment Model  implements an incentive payment model to improve patient outcomes following an AMI or CABG procedure.

The additional MS-DRGs related to the payment models are as follows:

  1. AMI Model – MS-DRG 280-282
  2. CABG Model – MS-DRG 231-236
  3. SHFFT Model – MS-DRG 480-482

CMS has waived the SNF three-day rule for the AMI Model; this rule has not been waived for the CABG and SHFFT Models. Similar to CJR, CMS continues to qualify SNF providers for these programs based on the Five-Star Quality Rating System. SNFs must continue to secure an overall 3 stars or better for at least seven of the 12 months. CMS will determine if the EPM hospital applying for the SNF three-day waiver correctly applies the waiver rules. If the SNF is not a qualified SNF, the SNF  and the beneficiary may be financially liable for non-covered SNF services; which in turn, reverts these non-covered services to the EPM hospital.

Please do not hesitate to reach out to one of Baker Tilly’s healthcare professionals to assist you through these changes or answer any additional questions you may have.