[Federal Register Volume 82, Number 96 (Friday, May 19, 2017)]
[Rules and Regulations]
[Pages 22895-22899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10340]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 510 and 512

[CMS-5519-F3]
RIN 0938-AS90


Medicare Program; Advancing Care Coordination Through Episode 
Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; 
and Changes to the Comprehensive Care for Joint Replacement Model 
(CJR); Delay of Effective Date

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule; delay of effective date.

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SUMMARY: This final rule finalizes May 20, 2017 as the effective date 
of the final rule titled ``Advancing Care Coordination Through Episode 
Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; 
and Changes to the Comprehensive Care for Joint Replacement Model 
(CJR)'' originally published in the January 3, 2017 Federal Register. 
This final rule also finalizes a delay of the applicability date of the 
regulations at 42 CFR part 512 from July 1, 2017 to January 1, 2018 and 
delays the effective date of the specific CJR regulations listed in the 
DATES section from July 1, 2017 to January 1, 2018.

DATES: Effective date: The final rule published in the January 3, 2017 
Federal Register (82 FR 180)) is effective May 20, 2017, except for the 
provisions of the final rule contained in the following amendatory 
instructions, which are effective January 1, 2018: Number 3 amending 42 
CFR 510.2; number 4 adding 42 CFR 510.110; number 6 amending 42 CFR 
510.120; number 14 amending 42 CFR 510.405; number 15 amending 42 CFR 
510.410; number 16 revising 42 CFR 510.500; number 17 revising 42 CFR 
510.505; number 18 adding 42 CFR 510.506; and number 19 amending 42 CFR 
510.515.
    Applicability date: The applicability date of the regulations at 42 
CFR part 512 is January 1, 2018.

FOR FURTHER INFORMATION CONTACT: Sean Harris (410) 786-0812. For 
questions related to the EPMs: [email protected]. For questions 
related to the CJR model: [email protected].

SUPPLEMENTARY INFORMATION:

[[Page 22896]]

I. Background

    In the interim final rule with comment period published on March 
21, 2017 (82 FR 14464), we delayed the effective date of the final rule 
titled ``Advancing Care Coordination Through Episode Payment Models 
(EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to 
the Comprehensive Care for Joint Replacement Model (CJR)'' to May 20, 
2017, the applicability date of the regulations at 42 CFR part 512 to 
October 1, 2017, and the effective date of the specific CJR regulations 
itemized in the DATES section to October 1, 2017. The 30-day comment 
period for that rule closed on April 19, 2017. We received 47 
submissions in response to our comment solicitation on the start date 
for the EPMs and Cardiac Rehabilitation (CR) incentive payment model, 
and we have summarized and responded to comments related to the 
appropriateness of this delay as well as a further delay until January 
1, 2018, in the following section.

II. Provisions of the Interim Final Rule With Comment Period and 
Analysis of and Responses to Public Comments

    In the January 3, 2017 Federal Register (82 FR 180), we published a 
final rule titled ``Advancing Care Coordination Through Episode Payment 
Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and 
Changes to the Comprehensive Care for Joint Replacement Model (CJR)'' 
(hereafter called the EPM final rule), which implements three new 
Medicare Parts A and B EPMs and a Cardiac Rehabilitation (CR) incentive 
payment model, and implements changes to the existing CJR model under 
section 1115A of the Social Security Act (the Act). Under the three new 
EPMs, acute care hospitals in certain selected geographic areas will 
participate in retrospective EPMs targeting care for Medicare fee-for-
service (FFS) beneficiaries receiving services during acute myocardial 
infarction (AMI), coronary artery bypass graft (CABG), and surgical 
hip/femur fracture treatment (SHFFT) episodes. All related care within 
90 days of hospital discharge will be included in the episode of care. 
The three new EPMs are called the AMI EPM, CABG EPM, and SHFFT EPM. 
Under the CR incentive payment model, acute care hospitals in certain 
selected geographic areas will receive retrospective incentive payments 
for beneficiary utilization of cardiac rehabilitation/intensive cardiac 
rehabilitation services during the 90 days following the hospital 
discharge that initiated an AMI or a CABG episode.
    The EPM final rule included an effective date of February 18, 2017 
for all provisions except those contained in the following amendatory 
instructions, which were to become effective on July 1, 2017: Number 3 
amending 42 CFR 510.2; number 4 adding 42 CFR 510.110; number 6 
amending 42 CFR 510.120; number 14 amending 42 CFR 510.405; number 15 
amending 42 CFR 510.410; number 16 revising 42 CFR 510.500; number 17 
revising 42 CFR 510.505; number 18 adding 42 CFR 510.506; and number 19 
amending 42 CFR 510.515. For the EPMs and CR incentive payment model, 
the provisions in the EPM final rule regarding the regulations at 42 
CFR part 512 were to become effective February 18, 2017, but the 
applicability date was July 1, 2017, meaning that the episodes for 
those models would not start until July 1, 2017.
    In the February 17, 2017 Federal Register (82 FR 10961), as 
directed by the memorandum of January 20, 2017, from the Assistant to 
the President and Chief of Staff, titled ``Regulatory Freeze Pending 
Review'', we published a final rule that delayed the effective date of 
the EPM final rule for provisions that were to become effective on 
February 18, 2017, to an effective date of March 21, 2017. In the 
February 17, 2017 final rule (82 FR 10961), we stated that the 
provisions contained in the amendatory instructions summarized in the 
previous paragraph remained effective July 1, 2017. In addition, the 
applicability dates for the EPMs and CR incentive payment model 
remained July 1, 2017.
    The January 20, 2017 ``Regulatory Freeze Pending Review'' 
memorandum encourages agencies to consider proposing for notice and 
comment a rule to delay the effective date for regulations beyond that 
60-day period. In the interim final rule with comment period published 
on March 21, 2017 (hereafter called the March 21, 2017 IFC), we further 
delayed the effective date of the EPM final rule from March 21, 2017 
(as provided in the final rule published in the February 17, 2017 
Federal Register (82 FR 10961)) to May 20, 2017; delayed the 
applicability date of the regulations that were to be applicable on 
July 1, 2017 to an applicability date of October 1, 2017; and delayed 
the effective date of certain conforming changes to CJR provisions that 
were to be effective July 1, 2017 to October 1, 2017. These delays 
postponed the applicability of the EPMs and the CR incentive payment 
model, as well as the date on which conforming changes to the CJR model 
regulations take effect, until October 1, 2017. This additional 3-month 
delay was necessary to allow time for additional review, to ensure that 
the agency had adequate time to undertake notice and comment rulemaking 
to propose changes to the policy as warranted, and to ensure that 
participants have a clear understanding of the models and are not 
required to take needless compliance steps due to the rule taking 
effect for a short duration before any potential changes are 
effectuated. We noted that, in light of the potential need for further 
notice and comment rulemaking prior to the start of the models, it 
would be problematic not to adjust the start date for the EPMs and CR 
incentive payment model from July 1, 2017. Given participants' need for 
advance notice of the terms of the models, and the fact that the 
episodes being tested in these models exceed 90 days in duration 
because they initiate with a hospitalization and end 90 days after 
discharge, we believed that immediately moving the start date of the 
EPMs and CR incentive payment model to October 1, 2017 was appropriate.
    Moreover, in the January 3, 2017 final rule, payment year one for 
the EPMs was originally to cover the 6-month period from July 1, 2017 
through December 31, 2017. Subsequent EPM model years run a full 12 
months in accordance with the calendar year. Considering the length of 
episodes in the models, we believed it would be preferable to maintain 
a duration of at least 6 months for payment year one and that it would 
be less burdensome for participants to adhere as closely to the 
calendar year as possible when defining model payment years. Further, 
to the extent that we would propose and finalize revisions to the 
model, should we determine changes are warranted, we noted that 
participants should have reasonable time to prepare. Therefore, we 
sought comment on a longer delay of the start date, including to 
January 1, 2018, and noted that we would address the comments and 
effectuate any additional delay in the models' start date when we 
finalized the March 21, 2017 IFC. In addition, we noted that if we 
effectuated any additional delay in the models' start date, we also 
would delay the effective date of certain conforming CJR regulation 
changes (that is, the changes listed in the DATES section of the EPM 
final rule that originally were to take effect July 1, 2017) so that 
the effective date of those changes remained aligned with the start 
date of the EPMs.
    The 30-day comment period for the March 21, 2017 IFC closed on 
April 19, 2017. We received multiple comments on the models' start date 
change on which we solicited comment in the IFC

[[Page 22897]]

and those comments and our responses are discussed in the following 
paragraphs. We also received a number of comments on the models that 
did not relate to the start date change comment solicitation. These 
additional comments suggested that we reconsider or revise various 
model aspects, policies and design components; in particular these 
comments suggested that we should make participation in the models 
voluntary instead of mandatory. We will not respond to these comments 
in this final rule as they are out of scope of this rulemaking, but we 
may take them into consideration in future rulemaking.
    Comment: Many commenters supported CMS' further delay of the start 
date from October 1, 2017 to January 1, 2018 for the EPMs and CR 
incentive payment model. Commenters requested at least 6 months of 
preparation time after the EPM final rule takes effect, stating that 
the EPM episodes are complex, involve sick patients with many entry 
points into acute care settings, and require the establishment of 
networks for coordination across numerous specialists. Commenters 
stated that participants need time to evaluate the final model 
provisions, to develop specific EPM care plans, and to update health 
information technology, quality metrics, patient and family education, 
care management and discharge planning. Commenters stated that more 
lead time is needed to redesign clinical care in a manner that ensures 
beneficiaries receive the most appropriate and optimal care, including 
increasing referrals to cardiac rehabilitation. Some commenters 
requested that we provide historic claims data as scheduled and do not 
delay sharing data so that hospital can identify opportunities for care 
redesign in advance of the models' start date. Additionally, commenters 
noted that January 1, 2018 would be better than October 1, 2017 to 
start the models, as a 3-month payment year one would not allow for 
meaningful performance outcomes. Commenters also noted that a model 
start date of January 1, 2018 would allow CMS to engage in additional 
rulemaking on the specific EPM structure and overall model design.
    A few commenters suggested that the October 1, 2017 start date 
should be retained, and hospitals should have the option to delay their 
participation in the EPMs until January 1, 2018. This option would 
allow hospitals with no prior experience operating under risk-based 
models more time to prepare while other hospitals could begin 
participating sooner. One commenter did not support further delay until 
January 1, 2018, stating that continued uncertainty around the start 
date of the EPMs and CR incentive payment model may penalize proactive 
providers who have been preparing for implementation of the EPMs and CR 
incentive payment model since they were notified of their participation 
in the model at the time of the publication of the EPM final rule in 
early 2017. Several commenters suggested that rather than delaying the 
EPMs, CMS should withdraw these models all together. Other commenters 
suggested that these models be delayed indefinitely until further 
evaluation can be done to determine consequences of these models on the 
health care marketplace in the selected geographic areas and on other 
Innovation Center models.
    Response: We thank commenters for their feedback. Based on this 
feedback, we agree with the majority of commenters that an additional 
delay prior to the start of the EPMs and CR incentive payment model is 
necessary. Delaying the EPMs' and CR incentive payment model's start 
date dates until January 1, 2018 will ensure that CMS has adequate time 
to undertake notice and comment rulemaking, if modifications are 
warranted. This would ensure that, in the case of any policy changes, 
participants would have a clear understanding of the governing rules 
before episodes begin and have the opportunity to take additional steps 
to adjust to any potential changes that may be effectuated.
    Moreover, in the EPM final rule, payment year one for the EPMs was 
established to cover the 6-month period from July 1, 2017 through 
December 31, 2017. Subsequent EPM model years run a full 12 months in 
accordance with the calendar year. Considering that the length of 
episodes in the EPMs includes the duration of the hospitalization and 
the 90 day post-discharge period and therefore exceeds 90 days in 
duration, we believe it would be preferable to maintain a duration of 
at least 6 months for payment year one, which also would also give 
participant hospitals 6 additional months of experience in the models 
before downside risk begins for all participants. Additionally, we 
believe it would be less burdensome for participants to adhere as 
closely to the calendar year as possible when defining model payment 
years.
    We disagree with commenters who were opposed to further delaying 
the models until January 1, 2018 on the basis that a delay would 
penalize those participants who may be ready for an October 1, 2017 
implementation date. Additionally, we are respectfully rejecting the 
suggestion that optional model start dates of October and January 
should be allowed due to the additional operational and administrative 
burden that would arise from creating two sets of model timeframes. We 
believe that all model participants should have time to consider 
proposed changes to these models, operate under the same model 
timeframe, and have time between the establishment of the final model 
parameters and the start date of the models.
    We also note that we disagree with commenters who suggested that 
CMS withdraw these models altogether and/or delay them indefinitely. As 
we stated in the January 3, 2017 EPM final rule, we believe these 
models will further our goals of improving the efficiency and quality 
of care for Medicare beneficiaries receiving care for these common 
clinical conditions and procedures.
    Comment: Several commenters did not support the delay of the 
establishment of an Alternative Payment Models Beneficiary Ombudsman, 
which they believe would result from a delay of the EPM final rule. 
These commenters stated that beneficiaries whose care is provided 
through alternative payment models have unique questions and may face a 
variety of issues, and a centralized, expert resource with information 
about all of the Alternative Payment Models will support CMS's existing 
information networks and allow for robust tracking of complaints and 
problems. Commenters stated that focused ombudsman programs work well 
both in protecting beneficiaries and helping demonstrations stay on 
track by identifying issues early. Commenters stated that an ombudsman 
can help ensure consumer understanding, identify systemic issues with 
implementation, and solve many problems without the need to use formal 
appeals processes.
    Response: As we stated in the January 3, 2017 EPM final rule (82 FR 
430), we intend to establish an Alternative Payment Models Beneficiary 
Ombudsman within CMS who will complement the Medicare Beneficiary 
Ombudsman in responding to beneficiary inquiries and concerns arising 
from care under the EPMs, CR incentive payment model and CJR model, as 
well as other Innovation Center models, under the existing Medicare 
processes. We agree with the commenters that ombudsman programs are 
helpful to resolve beneficiary concerns and in tracking model issues. 
We note that delaying the start date of the EPMs and CR incentive 
payment

[[Page 22898]]

model will allow CMS additional time to establish ombudsman support for 
these models.
    For the CJR model, there are already numerous model-specific 
processes in place and in the Medicare program generally to protect 
beneficiary choice. We have established similar protections for 
beneficiary choice in the EPM regulations. In the EPMs and CJR model, 
beneficiaries retain their right to choose the provider or supplier for 
medically necessary, covered services. Under these models, the 
beneficiary retains the benefits of the doctor-patient relationship and 
is provided additional notification of any sharing arrangements the 
participant hospital may have with EPM and CJR collaborators that could 
create a potential conflict of interest. In addition, the beneficiary 
must be provided with a notice for continuing services that are not 
covered under the models or Medicare, such as a continued stay in an 
EPM participant or a skilled nursing facility (SNF), and the 
beneficiary has access to the existing expedited review process in 
these cases. At any time during these models, the beneficiary retains 
the right to also voice concerns or grievances using currently 
available resources, by calling their local Quality Improvement 
Organization (QIO) contractor or by calling the 1-800-MEDICARE 
helpline.
    Comment: Several commenters strongly urged CMS to refrain from 
delaying implementation of the CR incentive payment model. Citing 
multiple research studies on cardiac rehabilitation data, commenters 
stated that cardiac rehabilitation has health benefits as well as 
financial advantages, including reduced hospitalizations and use of 
medical resources. Commenters stated that the incentive payments may be 
used to better coordinate cardiac rehabilitation and to support 
beneficiary adherence to the CR treatment plans by removing barriers to 
participation.
    Response: Although we appreciate the commenters' support for the CR 
incentive payment model, we note that the CR incentive payment model 
that will run in the EPM MSAs is designed to incentivize CR utilization 
by beneficiaries in active EPM AMI and CABG episodes. The CR incentive 
payment model is being tested in EPM model MSAs and in other FFS MSAs 
concurrently. Prior to January 1, 2018 there will be no active EPM 
episodes in the EPM MSAs. We believe it would be confusing and 
operationally challenging to start the CR incentive payment model on 
October 1, 2017, which is 3 months before the EPM cardiac models start. 
We believe that existing Medicare FFS provisions sufficiently allow 
beneficiaries access to appropriate cardiac rehabilitation services 
prior to the start of the CR incentive payment model. Thus, we do not 
agree that we should begin the CR incentive payment model prior to the 
EPMs, and will start the CR incentive payment model in conjunction with 
the AMI and CABG EPMs on January 1, 2018.
    Comment: Some commenters expressed concerns about delaying the 
conforming changes to the CJR model that were originally intended to 
take effect July 1, 2017 to October. These commenters also objected to 
a further delay of those same CJR model changes to January 1, 2018. One 
commenter expressed support for delaying these CJR conforming changes 
to allow participants ample time to implement changes within their 
healthcare systems, even though there could be some impact on 
clinicians' participation in the 2017 Advanced APM track. Commenters 
expressed concern regarding the ability of orthopedic surgeons to 
achieve qualified provider status for participating in an Advanced APM 
for 2017 should the models be delayed beyond October 1, 2017. 
Commenters stated that changes to CJR requirements for beneficiary 
notification and sharing arrangements provide clarity, help ensure 
compliance with timely beneficiary notification, and enhance hospitals' 
ability to engage with additional crucial care partners through the use 
of financial incentives. Commenters expressed concern that without 
these changes to beneficiary notification and sharing agreements, there 
will continue to be beneficiary confusion and distress regarding the 
notification requirement and an increased burden for participants. 
Commenters also expressed concern that a further delay of changes to 
the types of entities that can be CJR collaborators would prevent non-
physician practitioner group practices, therapy group practices, 
therapists in private practice, and comprehensive outpatient 
rehabilitation facilities from becoming CJR collaborators during 2017.
    Response: We thank the commenters for their feedback. The purpose 
of making conforming changes to certain aspects of the CJR model was to 
align the established EPM policies with CJR policies that are similar, 
which we believe would decrease burden, particularly for CJR hospitals 
participating in the SHFFT model. We note that several changes to the 
CJR beneficiary notification requirements will take effect on May 20, 
2017, most notably the changes at Sec.  510.405(a) and (b) changes that 
recognize that the beneficiary's condition may affect the timing of 
notification about the CJR model and that cover notification by 
collaborators about applicable sharing arrangements (82 FR 616). We are 
only delaying changes to the beneficiary notification provisions (that 
is, revisions to Sec.  510.405(b)(1), (2), and (4)) that add non-
physician practitioner group practices (NPPGPs) and therapy group 
practices (TGPs) to the collaborators responsible for compliance with 
Sec.  510.405 because the conforming provisions that add NPPGPs and 
TGPs to the list of eligible collaborators are being delayed until 
January to align collaborator requirements across the CJR and SHFFT 
models.
    We note that the provisions in the EPM final rule that allow 
hospitals to join the Advanced APM option under the CJR model are 
effective May 20, 2017, and will allow eligible clinicians on a CJR 
affiliated practitioner list to potentially qualify as Qualifying APM 
Participants (QPs) under the Quality Payment Program in 2017. In 
response to commenters' concern regarding the ability of orthopedic 
surgeons to achieve QP status for participating in an Advanced APM for 
2017, we would like to clarify that the delay until January 1, 2018 of 
certain conforming changes to the CJR regulations is unlikely to have 
an effect on most eligible clinicians to achieve QP status for 
participating in an Advanced APM for 2017. We understand that the 
conforming changes to the types of CJR collaborators, including the 
change that permits ACOs to be CJR collaborators, will not become 
effective until January 1, 2018. However, physicians and physician 
group practices have been valid CJR collaborator types since the CJR 
model began, and therefore we believe that most orthopedic surgeons 
furnishing services to beneficiaries included in CJR in 2017 would 
already have arranged to be CJR collaborators under these existing 
categories. Therefore, we believe orthopedic surgeons' ability to 
qualify for QP status in 2017 is unlikely to be significantly affected 
by the delay of regulations that broaden the scope of CJR collaborator 
provider types.
    Final Decision: After careful consideration of the public comments 
received, we are finalizing a further delay of the start date of the 
EPMs and CR incentive payment model until January 1, 2018, such that 
these models' performance year 1 would start on January 1, 2018 and end 
on December 31, 2018. Additionally, we are finalizing a further delay 
of the effective date of the CJR regulation amendments that were to 
take effect October 1, 2017. These CJR regulation amendments will

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now be effective as of January 1, 2018, to maintain our policy of 
aligning these changes with the EPMs.

III. Out of Scope Public Comments Received

    We received public comments suggesting changes to the overall 
design of the EPMs, CR incentive payment model and CJR model that were 
outside of the scope of the March 21, 2017 IFC. These comments touched 
on participation requirements, data, pricing, quality measures, episode 
length, CR and SNF waivers, beneficiary exclusions and notification 
requirements, repayment, coding, and model overlap issues. We consider 
these public comments to be outside of the scope of the March 21, 2017 
IFC; and therefore, we are not addressing them in this final rule. We 
may consider these public comments in future rulemaking.

IV. Waiver of the Delay in Effective Date

    Section 553(d) of the Administrative Procedure Act (APA) normally 
requires a 30-day delay in the effective date of a rule, but this delay 
can be waived for good cause. Because in the March 21, 2017 IFC we 
immediately adjusted the applicability dates of the EPMs and CR 
incentive payment model (and the effective date of certain conforming 
CJR model changes) by 3 months, but believed a 6-month delay might be 
warranted, in the March 21, 2017 IFC we solicited public comment on the 
appropriateness of a further delay in the applicability (model start) 
date of the EPMs and CR incentive payment model, and took those 
comments into consideration in this final rule. In light of the 
comments, we are implementing a further delay in the applicability 
(model start) date for the EPMs and CR incentive payment model (as well 
as a further delay in the effective date of the conforming CJR model 
changes specified in the DATES section of this final rule). We believe 
that a 30-day delay in the effective date of this final rule would be 
contrary to the public interest because it would cause confusion for 
affected participants. Specifically, as of May 20, 2017, the EPM final 
rule would become effective and would specify an October 1, 2017 start 
date for the EPMs and CR incentive payment model, and then this final 
rule would subsequently specify a January 1, 2018 start date for the 
EPMs and CR incentive payment model. Such an outcome could cause 
participants to take needless compliance steps in anticipation of an 
October 1, 2017 start date, and before any potential modifications, if 
warranted, can be effectuated. For these reasons, we find good cause to 
waive the 30-day delay in effective date provided for in 5 U.S.C. 
553(d). Based on these findings, this final rule is effective upon 
publication in the Federal Register.

    Dated: May 12, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: May 15, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-10340 Filed 5-18-17; 8:45 am]
BILLING CODE 4120-01-P