hci3 Update from the Field: CMMI Rollout

Submitted by francois.debrantes@hci3.org on Monday, August 22, 2011 - 08:39

HCI3 Update from the Field – Newtown, CT

Hallelujah! – Today, Rick Gilfillan and Valinda Rutledge announced the CMMI's rollout of a national pilot to pay a bundle of services for a comprehensive episode of care. The plan is simple and elegant, broad and appealing, and builds on the successes of current CMS and private sector efforts. It's a huge step in the right direction and the CMMI should be commended and congratulated for this bold and innovative step. Hospitals, physicians, post-acute care providers and others will have an opportunity to participate in four different models. There are two relatively tightly scoped models – IP stay only – that build on the current ACE and gainsharing demonstrations respectively by allowing hospitals to select any DRG as opposed to the more limited current set of options in ACE, and have the same operating mechanisms (including prospectively paid episodes for the ACE expansion option). The third model is basically an offshoot of our and the IHA's work. Applicants may select any procedure or acute hospitalization, and can modulate the episode length from at least 30 days post discharge to 90 days. Providers don't need to be integrated and no provider will hold the money for the others. Instead they will continue to be paid FFS and there will be a back-end reconciliation. The Applicant, who will represent the providers, will be at financial risk for costs in excess of the agreed-upon episode budget, and CMS will cut a check for any difference between budget and FFS. The final model is for post-acute care providers and creates an incentive to optimize care and efficiency post discharge from a hospitalization.

What this means to you – The day is today, and the time is now. Communities that have organized themselves to promote payment reform will be able to act as conveners in these pilots and help pull providers together. Provider organizations like IPAs, PHOs and Co-Management LLCs will be able to accept risk and negotiate with other providers on sharing that risk and the upside. Health plans might also be able to play a role as conveners, helping their network providers to organize around a Medicare bundle. For hospitals and physicians that have been participating in pilots or considering participating in pilots, the Medicare door is now wide open, and the prior concerns of "free riding" are significantly decreased. Finally, for commercial plans that have been saying they're waiting for Medicare to get engaged before they themselves get engaged….well, time to find another excuse or to make the jump. This is a great day. One that we will point to as a pivotal instant – a moment in time when healthcare has changed for the better for all Americans. Hats off to Rick and Valinda and the rest of the CMMI. You came through!


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org