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New Medicare pay models proposed for cardiac care to boost quality, save money

Heart doctor and heart monitor
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Federal health regulators Monday proposed to test a new way to pay hospitals that treat Medicare beneficiaries for heart attacks and bypass surgery, as well as hip fractures, with an eye toward controlling costs and improving patient outcomes.

Under the model proposed for a five-year demonstration project to begin next summer, which would be mandatory, hospitals would be paid on a "bundled" basis for treating such patients.

That would effectively give the hospitals a lump-sum payment from Medicare for the care, meaning that if the care ended up costing more than the bundled payment, the hospital would eat the cost.

On the other hand, if the hospital kept the costs lower than what it was being paid by Medicare, it would be able to bank the savings.

Also Monday, the U.S. Health and Human Services Department said it was proposing a new model to increase the number of people who undergo cardiac rehabilitation, which would encourage hospitals to steer patients to rehab. Only 15 percent of heart attack patients now undergo cardiac rehab, despite research that has found it lowers the risk of another heart attack or death.

HHS also said it was proposing a way in which doctors who participate in bundled payment models would qualify for incentive payments if they met certain thresholds.

The new proposed bundled payment model is the latest effort by HHS to push the health-care system toward medical providers being paid fees for overall health outcomes, as opposed to the current predominant system whether providers are paid separately for every procedure or test they perform. HHS has a goal of having 50 percent of traditional Medicare payments flow through alternative payment models by 2018; the rate currently is 30 percent.

HHS is the biggest purchaser of health care in the United States, through its Medicare program, which provides coverage for primarily senior citizens, and the Medicaid program, which provides coverage to mainly poor people with federal and state funds.

"Having a heart attack or undergoing heart surgery is scary and stressful for patients and their families," said HHS Secretary Sylvia Burwell.

"Today's proposal is an important step to improving the quality of care Americans receive and driving down costs. By focusing on episodes of care and rewarding successful recoveries, bundled payments encourage hospitals to coordinate care to achieve the best outcomes possible for patients."

Dr. Patrick Conway, acting principal deputy administrator of the federal Centers for Medicare and Medicaid Services, a division of HHS, said the current way that Medicare pays for cardiac care by hospitals has led to "variations in cost and quality of care at different hospitals."

HHS noted that more than 200,000 Medicare beneficiaries were in hospitals in 2014 for either heart attack treatment or bypass surgery, costing Medicare more than $6 billion. But the costs of surgery, hospitalization and recovery for bypass patients "varied by 50 percent across hospitals," and the share of heart attack patients readmitted to the hospital within 30 days varied by more than 50 percent, HHS said.

The proposed bundled-payment model for cardiac care would be phased in over a period of five years, but would start July 1, 2017, for hospitals in 98 metropolitan areas, which comprise about one-fourth of all U.S. metro areas.

"Under the new models in today's rules, the hospital in which a Medicare patient is admitted for care for a heart attack or bypass surgery would be accountable for the cost and quality of care provided to Medicare fee-for-service beneficiaries during the in-patient stay and for 90 days after discharge," HHS said.

The bundled payment model for hip and femur fractures would be phased in starting with the 67 metro areas whose 800 or so hospitals already are receiving bundled Medicare payments for hip replacements.

Conway said that HHS has already seen "promising results" from voluntary bundled payment models it now has with more than 1,500 hospitals and physicians groups.