Tag: medicaid

CMS unveils new bundled payment model

By Chase Doscher, Class of 2018; Elizabeth N. Pitman, Counsel at Waller; Zachary D. Trotter, Associate at Waller

Earlier this month, CMS announced the launch of the Bundled Payment for Care Improvement Advanced (BPCI Advanced) payment model.

This is the first Advanced Alternative Payment Model (Advanced APM) introduced under the Trump Administration and the start of the next generation of BPCI models offered through the Center for Medicare and Medicaid Innovation and authorized under the Affordable Care Act.  Under the MACRA Quality Payment Program, providers will be subject to Medicare payment adjustments through one of two tracks: Merit-based Incentive Payment System (MIPS) or Advanced APM.

Under MIPS, a provider may receive a negative, neutral or positive adjustment with the expectation that the majority of participants will experience either negative or neutral adjustments. The BPCI Advanced model, however, entices providers to participate in an Advanced APM by offering the potential for bonus payments under MACRA for those who meet or achieve certain benchmarks during a 90-day episode of care, including the all-cause hospital readmission measure and advance care plan measure.  As with other Advanced APMs, BPCI Advanced requires that participants assume some of the risk and ties payment to quality performance metrics and the required use of certified healthcare technology.

After cancelling an Obama-era proposal for converting certain of the BPCI episode models to mandatory bundled-payment models, the Trump Administration effort to maintain voluntary participation is an attempt to decrease the administrative burdens such models placed on providers. Voluntary participation in BPCI models, such as Comprehensive Care for Joint Replacement and the Cardiac Rehabilitation Incentive model, has been offered since 2016.

This new model will give providers, “an incentive to deliver efficient care,” Seema Verma, CMS Administrator, said. “BPCI Advanced builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and toward paying for value.”

Thirty-two clinical care episodes will initially be included in BPCI Advanced, 29 inpatient-setting episodes of care and three outpatient-setting episodes of care and the potential for episode revision for new and existing participants beginning January 1, 2020.   The clinical care episodes include services such as major joint replacement of a lower extremity, percutaneous coronary intervention and spinal fusion.

BPCI Advanced performance period is from October 1, 2018 through December 31, 2023.  Participants joining in the initial stage may not exit prior to January 1, 2020.

Providers interested in at least one of the 32 clinical episodes to apply to the model have until 11:59 pm EST on March 12, 2018 to apply via the application portal.

Block Grants—A Summary

By Kim Macdonald, Class of 2018

A block grant is a proposed strategy used for managing Medicaid, which provides control of the program in state hands by placing a flat cap on federal funding. Proponents argue these locked lump sum payments would provide states greater freedom in regulating health insurance. As a result, less federal funding would be available for state Medicaid programs, which proponents argue would incentivize states to manage their finances more responsibly. However, critics counter that it is inherently challenging to “manage fiscal responsibility” for a program based on providing health care for the needy.

By turning Medicaid into a block grant-based program, states themselves would have the increased ability to decide who qualifies for coverage, rather than having to largely meet federal coverage requirements as a prerequisite for receiving federal funding. Currently, states have to meet federal requirements for coverage, such as covering children and low-income pregnant women, as a condition of receiving federal funding. Therefore, because the federal government and states share in the funding of Medicaid programs, states are restricted with how to spend federal money and what benefits to cover. Transforming Medicaid into a block grant-funded program results in loosening these state coverage requirements.

A block grant is different from a “per capita cap,” which provides fixed federal funding based on the number of enrollees in the state. By contrast, block grants do not account for this variability; if the number of enrollees shifts dramatically from year to year, federal funding through a block grant cannot account for this increased or decreased expense.

Proponents of the block grant structure for Medicaid argue it will encourage innovation by forcing states to spend their money more efficiently. However, critics argue the structure harms people in the guise of “experimentation,” by forcing states to take drastic measures to cut costs in the short term—perhaps by cutting benefits or increasing cost sharing obligations. One criticism is that these fixed federal grants would be based on national inflation, not medical inflation, which accounts for epidemics, new and expensive drugs, and an aging population. In order to account for the sudden loss of federal funding, many states may cut benefits entirely for current enrollees eligible for Medicaid in expansion states. In fact, block grant proposals likely would cut off all federal funds allocated for Medicaid expansion entirely. Given that thirty-one states and the District of Columbia have adopted Medicaid expansion, including about one hundred Republican House members and about twenty Republican senators, this drop in coverage would be problematic.  Alternatively, states may decide to cap enrollment to save costs, leaving many qualified enrollees without health care coverage. The Congressional Budget Office estimates block grant proposals to cut Medicaid by as much as a third over the next ten years. This drastic of a cut would primarily affect the elderly and the disabled, who are the recipients of the clear majority of the existing Medicaid budget.