Federal Agencies adopt new tactics for healthcare industry to alternative payment models in medicine.
nThe Department of Health and Human Services has pushed forward several alternative payment models for the healthcare industry.nnIn recent years, the federal government has positioned the healthcare industry to adopt new reimbursement tactics aimed at strengthening pay-for-performance initiatives. These regulations consist of alternative payment models such as bundled payments or value-based care reimbursement. The Centers for Medicare & Medicaid Services (CMS), for instance, established the Comprehensive Care for Joint Replacement Model, which consists of implementing bundled payments or reimbursement based on an episode of care within hip and knee replacement surgeries.The proposed rule for the bundled payment model was initially was published on July 9, 2015 and the finalized legislation was made available on November 16, 2015. The start date of the Comprehensive Care for Joint Replacement Model is set for April 1, 2016. “The CJR [Comprehensive Care for Joint Replacement] model holds participant hospitals financially accountable for the quality and cost of a CJR episode of care and incentivizes increased coordination of care among hospitals, physicians, and post-acute care providers,” CMS stated on its website.nn“The episode of care begins with an admission to a participant hospital of a beneficiary who is ultimately discharged 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) and ends 90 days post-discharge in order to cover the complete period of recovery for beneficiaries. The episode includes all related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, with the exception of certain exclusions.” CMS has had a rich history of supporting bundled payment models starting in the 1980s when an inpatient prospective payment system was created. This was the first step in which the Medicare program reimbursed hospitals based on a fixed amount for each patient’s hospital stay and diagnosis.n