[Federal Register Volume 88, Number 136 (Tuesday, July 18, 2023)]
[Proposed Rules]
[Pages 45872-45881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15169]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Chapter IV

[CMS-5540-NC]
RIN 0938-AV19


Request for Information; Episode-Based Payment Model

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health of Human Services (HHS).

ACTION: Request for information.

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SUMMARY: This request for information seeks input from the public 
regarding the design of a future episode-based payment model. Responses 
to this request for information may be used to inform potential future 
rulemaking or other policy development.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by August 17, 2023.

ADDRESSES: In commenting, refer to file code CMS-5540-NC.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-5540-NC, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-5540-NC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

[[Page 45873]]


FOR FURTHER INFORMATION CONTACT: 
    Sacha Wolf, (410) 786-9769 ([email protected]), for issues 
related to incentive structure, model overlap, and BPCI Advanced.
    Lauren Vanderwerker ([email protected]) for issues 
related to payment and Comprehensive Care for Joint Replacement (CJR).
    Nicholas Adcock ([email protected]) for issues related to 
health equity.
    Dena McDonough ([email protected]) for issues related to 
quality measures, clinical episodes, or any other issues.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: https://www.regultions.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the commenter will take actions to harm an individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

I. Background

    In 2021, the Innovation Center announced a strategic refresh with a 
vision of having a health care system that achieves equitable outcomes 
through high quality, affordable, person-centered care.\1\ To guide 
this updated vision, the Innovation Center intends to design, 
implement, and evaluate future episode-based payment models with a 
focus on five strategic objectives, including advancing health equity 
and driving accountable care.\2\ With a bold goal of having 100 percent 
of Medicare fee-for-service (FFS) beneficiaries and the vast majority 
of Medicaid beneficiaries in an accountable care relationship by 2030, 
we acknowledge that additional opportunities for accountable care 
relationships with specialists are needed.\3\
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    \1\ CMS White Paper on CMS Innovation Center's Strategy: Driving 
Health System Transformation--A Strategy for the CMS Innovation 
Center's Second Decade (https://innovation.cms.gov/strategic-direction-whitepaper).
    \2\ The five strategic objectives are Drive Accountable Care, 
Advance Health Equity, Support Innovation, Address Affordability, 
and Partner to Achieve System Transformation.
    \3\ Providers in accountable care relationships work together 
and with their patients to manage patients' overall health, all 
while considering their patients' personal health goals and values.
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    One approach to support accountable care and to create an avenue 
for specialists to participate in value-based care initiatives is 
through episode-based payment models. The Innovation Center has 
launched several episode-based payment models (also known as bundled-
payment models), four of which are either ongoing or being implemented 
in 2023.\4\ These models help to address the inefficiencies in 
traditional Medicare FFS, where providers are paid for each item or 
service, which may drive volume over value and fragment care. By 
bundling items and services into an episode of care, providers are 
better incentivized to coordinate patient care and to avoid duplicative 
or unnecessary services.
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    \4\ CMS Innovation Center models still ongoing or being 
implemented in 2023 are the Bundled Payments for Care Improvement 
Advanced Model, Comprehensive Care for Joint Replacement Model, 
Enhancing Oncology Model, and the End-Stage Renal Disease Treatment 
Choices Model.
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    Early episode-based payment demonstrations were narrow in scope and 
assessed particular design aspects, such as the use of gainsharing 
mechanisms or bundled payments for inpatient stays.\5\ Current models 
build upon early tests by examining condition-specific or acute 
inpatient/outpatient episodes with accountability usually extending 90-
days beyond the triggering event. Generally, these episode-based 
payment models have demonstrated reductions in gross Medicare spending, 
driven in large part by reductions in post-acute care (PAC) spending or 
utilization, with minimal to no change on quality of care.\6\
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    \5\ The Medicare Hospital Gainsharing Demonstration (https://innovation.cms.gov/innovation-models/medicare-hospital-gainsharing) 
and Physician Hospital Collaboration Demonstration (https://innovation.cms.gov/innovation-models/physician-hospital-collaboration) focused on gainsharing while the Medicare Acute Care 
Episode Demonstration (https://innovation.cms.gov/innovation-models/ace) tested a global payment for certain inpatient stays.
    \6\ Synthesis of Evaluation Results Across 21 Medicare Models 
(https://innovation.cms.gov/data-and-reports/2022/wp-eval-synthesis-21models).
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    The Innovation Center is utilizing lessons learned from our 
experience with the Bundled Payments for Care Improvement (BPCI), 
Bundled Payments for Care Improvement Advanced (BPCI Advanced), and the 
Comprehensive Care for Joint Replacement (CJR) models to design and 
implement a new episode-based payment model focused on accountability 
for quality and cost, health equity, and specialty integration. To 
further inform development of the potential new model, we are 
soliciting input from those with additional insight and frontline 
experience with bundled payments. This request for information (RFI) is 
not seeking feedback on models which address particular conditions over 
a longer period of time, such as the Enhancing Oncology Model and the 
Kidney Care Choices Model. Specifically, we are requesting input on a 
broader set of questions related to care delivery and incentive 
structure alignment and six foundational components:

 Clinical Episodes
 Participants
 Health Equity
 Quality Measures, Interoperability, and Multi-Payer Alignment
 Payment Methodology and Structure
 Model Overlap

    In addition to maintaining or improving quality of care and 
reducing Medicare spending (two requirements articulated in the 
Innovation Center statute \7\), CMS intends to test an episode-based 
payment model with goals to:
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    \7\ Statutory requirements for CMS Innovation Center models are 
covered in section 1115A of the Social Security Act.
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     Improve care transitions for the beneficiary; and
     Increase engagement of specialists within value-based, 
accountable care.
    We recognize that for these goals to be realized, there must be a 
change in how episode-based payment models coexist with population-
based Medicare Accountable Care Organizations (ACOs). In theory, ACOs 
and episode-based payment models should be complementary, as ACOs are 
well situated to prevent unnecessary care, while episode-based payment 
model participants focus on controlling the cost of acute, high-cost 
episodes. However, these value-based care approaches have not 
consistently been complementary and, in some cases, have complicated 
health care operations.
    The Innovation Center strategic refresh provides an opportunity to 
better align episodes of care and population-based models to improve 
the beneficiary experience and reduce health care inefficiencies.\8\ 
Furthermore,

[[Page 45874]]

coordination capitalizes on the strengths of each provider, allowing 
them to manage and influence the outcomes that they control. 
Unfortunately, the current ACO and episode-based payment environment 
has created the perception that certain providers and suppliers are 
striving for the same cost savings, and uncertainty with respect to who 
manages a beneficiary's care. This issue is further exacerbated by 
complex model overlap policies that have changed as models and 
initiatives have evolved over time. These unintended consequences may 
discourage providers from participating in alternative payment models 
(APMs), leading to fewer beneficiaries under accountable care 
relationships. In order for the Innovation Center to achieve its 
strategic policy goals, episode-based payment incentives must be 
aligned across models to encourage intentional overlap, promote 
coordination, and facilitate seamless transition back to primary care.
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    \8\ Ryan, A.M., Krinsky, S., Adler-Milstein, J., Damberg, C.L., 
Maurer, K.A., & Hollingsworth, J.M. (2017). Association Between 
Hospitals' Engagement in Value-Based Reforms and Readmission 
Reduction in the Hospital Readmission Reduction Program. JAMA 
internal medicine, 177(6), 862-868. https://doi.org/10.1001/jamainternmed.2017.0518.
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II. Solicitation of Public Comments

    The Centers for Medicare & Medicaid Services (CMS) Center for 
Medicare and Medicaid Innovation (Innovation Center) seeks feedback 
regarding a potential new episode-based payment model that would be 
designed with a goal to improve beneficiary care and lower Medicare 
expenditures by reducing fragmentation and increasing care coordination 
across health care settings. The Innovation Center is releasing this 
request for information (RFI) to gather feedback on testing a new model 
design, built on previous experience with episode-based payment models, 
and to further the goals of improved outcomes and reduced Medicare 
spending. Whenever possible, respondents are requested to draw their 
responses from objective, empirical, and actionable evidence and to 
cite this evidence within their responses.
    We anticipate this model would require participation by certain 
entities, such as Medicare providers or suppliers or both located in 
certain geographic regions, to ensure that a broad and representative 
group of beneficiaries and participants are included. Further, 
requiring participation would also help to overcome voluntary model 
challenges such as clinical episode selection bias and participant 
attrition. Therefore, any such model would be implemented via notice 
and comment rulemaking, with ample opportunity for public input. We 
expect this episode-based payment model to be implemented no earlier 
than 2026, ensuring participants have sufficient time to prepare for 
the model.

A. Care Delivery and Incentive Structure Alignment

    Interested parties and experts have requested that CMS align 
specialty care incentives with population-based model initiatives to 
improve coordination across the continuum of care.\9\ In November 2022, 
the Innovation Center released its comprehensive specialty strategy to 
test models and innovations supporting access to high-quality, 
integrated specialty care across the patient journey--both 
longitudinally and for procedural or acute services.\10\ One element of 
the strategy is to maintain momentum established by episode-based 
payment models.
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    \9\ Care coordination is a key concept for episode-based and 
population-based initiatives. Please see the CMS Innovation Center's 
Care Coordination page (https://innovation.cms.gov/key-concept/care-coordination) for further details.
    \10\ The CMS Innovation Center's Strategy to Support Person-
centered, Value-based Specialty Care (https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care).
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    To date, the Innovation Center's episode-based payment models have 
focused largely on acute inpatient and hospital outpatient episodes, 
through CJR, BPCI, and BPCI Advanced. These model tests have 
successfully driven essential care delivery changes to transform how 
patients transition between hospitals and post-acute care 
providers.\11\ Through this next model, CMS will build on those care 
improvements to better align episodic and longitudinal, population-
based incentives, thereby strengthening communication, collaboration, 
and coordination across providers at all points of a patient's journey 
through the health care system. This will be achieved through design 
features such as considering a shorter, 30-day episode to support 
coordination, while limiting overlap.
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    \11\ Comprehensive Care for Joint Replacement Model: Fourth 
Evaluation Report (https://innovation.cms.gov/data-and-reports/2021/cjr-py4-annual-report); BPCI Advanced: Fourth Annual Report (https://innovation.cms.gov/data-and-reports/2023/bpci-adv-ar4).
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    To maintain momentum among providers and health systems, CMS 
extended the original CJR model for an additional 3 performance years 
(October 1, 2021-December 31, 2024), with modifications to certain 
elements such as the episode definition and the payment methodology. 
Subsequently, CMS extended BPCI Advanced for 2 years (January 1, 2024-
December 31, 2025), with technical changes to the pricing methodology 
to balance participation incentives with statutory requirements. The 
extension requires new convener participants to be Medicare-enrolled 
providers or suppliers or ACOs, which will support increasing ACO 
management of specialty conditions and primary care integration. In 
addition, the future data transparency initiatives of the specialty 
strategy will provide ACOs tools to better manage specialty care for 
patients within their population.\12\
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    \12\ CMS has signaled its intent to provide data on specialist 
performance, such as shadow bundles, to facilitate integration with 
ACOs. Shadow bundles would use existing ACO-attributed lives and 
claims data to assign services and associated payments to clinical 
episodes and enable a more nuanced view of performance on procedural 
or condition specific care.
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    The Innovation Center acknowledges that the role of clinical 
episodes will grow and evolve as more patients are cared for by 
providers in accountable care arrangements. To help us ensure all 
accountable entities provide patients with the highest value care, we 
seek input on the following questions:
     How can CMS structure episodes of care to increase 
specialty and primary care integration and improve patient experience 
and clinical outcomes?
     How can CMS support providers who may be required to 
participate in this episode-based payment model?
     How can CMS ensure patient choice and rights will not be 
compromised as they transition between health care settings and 
providers?
     How can CMS promote person-centered care in episodes, 
which includes mental health, behavioral health, and non-medical 
determinants of health?
     How can CMS support multi-payer alignment for providers 
and suppliers in episode-based and population-based models?
     For population-based entities currently engaging 
specialists in episodic care management, what are the key factors 
driving improvements in cost, quality, and outcomes?
     How does the nature of the relationship (that is, 
employment, affiliation, etc.) between a population-based entity and a 
specialist influence integration?
     What should CMS consider in the design of this model to 
effectively incorporate health information technology (health IT) 
standards and functionality, including interoperability, to support the 
aims of the model?
     How can CMS include home and community-based interventions 
during episode care transitions that provide connections to primary 
care or behavioral health and support patient independence in home and 
community settings? \13\
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    \13\ For example, Community Aging In Place, Advancing Better 
Living for Elders (CAPABLE) was a CMS Health Care Innovation Award 
project (https://downloads.cms.gov/files/cmmi/hcia-chspt-thirdannualrpt.pdf) that supported home-based care management by a 
registered nurse and occupational therapy to improve functional 
status. Services included home safety assessments, education, 
problem solving, care coordination, and handyman services to address 
housing-related safety risks.

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[[Page 45875]]

B. Clinical Episodes

    The CJR and BPCI Advanced models test condition-specific medical or 
surgical episodes, or both, which are initiated by either an inpatient 
hospitalization or a hospital outpatient procedure and include items 
and services provided over the following 90-day period.\14\
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    \14\ Medical episodes are those requiring medical management of 
an acute exacerbation of a condition whereas surgical episodes are 
those requiring a procedural intervention.
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    Many factors, including Medicare savings potential, are considered 
when deciding which clinical episode categories a model will test. 
Currently, there is no single clinical episode or service line group 
that meets every priority, but each is considered against the following 
criteria.
     Clinical homogeneity: Episodes with high clinical 
homogeneity may simplify target price methodology and make it easier to 
identify included items and services.
     Spending variability: Episodes with greater spending 
variability suggest opportunities for reducing costs and improving 
health care efficiency.
     Episode volume: Episodes with sufficient volume reduce 
pricing volatility and may spread financial risk.
     Quality impacts: Episodes with established quality 
measures or positive health equity outcomes may improve beneficiary 
quality of care.
     Episode overlap alignment: Episodes that support ACO 
collaboration.
    CJR tests a single surgical episode category, while BPCI Advanced 
includes 34 medical and surgical episode categories. Beginning in 2021, 
the BPCI Advanced model combined the individual clinical episodes into 
eight service line groups to expand participant accountability and 
promote efficiencies across similar episodes. While participants 
acknowledged the potential benefits of this change for increasing 
episode volume, they highlighted the difficulties of redesigning care 
processes across certain medical and critical care service lines. They 
found identifying and implementing care redesign interventions to be 
more straightforward for surgical episodes. CMS' BPCI Advanced 
evaluation reflected this; reductions in episode payments were more 
substantial for surgical episodes compared to medical episodes \15\ and 
suggest early management may reduce Medicare spending.
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    \15\ In the BPCI Advanced: Fourth Annual Report (https://innovation.cms.gov/data-and-reports/2023/bpci-adv-ar4), the 
reduction in per-episode payments was larger for surgical clinical 
episodes than medical clinical episodes (-$796 or -3.1 percent for 
medical clinical episodes vs. -$1,800 or -5.8 percent for surgical 
clinical episodes).
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    CMS maximizes the items and services included in a clinical episode 
to align with a total cost-of-care approach and ensure providers have 
accountability for all related aspects of care. This total cost-of-care 
approach represents an opportunity for improved care coordination and 
collaboration across disciplines and settings. For example, 
participants are generally accountable for the anchor event, along with 
PAC, hospital readmissions, physician, laboratory, and durable medical 
equipment costs.\16\ Although exclusion lists omit items and services 
that are clearly unrelated to the anchor event, clinical subjectivity 
does exist, and participants have expressed concern that they have 
limited influence over some included items and services.
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    \16\ Items and services typically included in a clinical episode 
include inpatient/outpatient hospital services, post-acute care 
services, laboratory services, durable medical equipment, Medicare 
Part B drugs, physician services, and mental health services. Items 
and services typically excluded from a clinical episode include 
certain readmissions (for example, transplant or cancer), blood 
clotting factors, new technology addon payments, and transitional 
pass-through payments.
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    The 90-day episode length has demonstrated success in reducing PAC 
spending, but the extended duration of overlap between episode-based 
payment models and ACO initiatives may contribute to inefficiencies. 
Reducing episode duration to 30 days could both sustain the spending 
reductions and mitigate some of the current challenges. Specifically, a 
30-day episode would position the specialist as the principal provider 
near the anchor event with a hand off back to the primary care provider 
for longitudinal care management.
    We anticipate this next episode-based payment model would test a 
set of clinical episodes that is broader than CJR, but narrower than 
BPCI Advanced, with shorter episode lengths. We request feedback on the 
following clinical episode questions:
     Which of the clinical episode categories, tested in either 
BPCI Advanced or CJR, should be considered for, or excluded from, this 
next episode-based payment model? \17\
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    \17\ The CJR model only tests the lower extremity for joint 
replacement episode, which includes MS-DRGs 469, 470, 521, 522 and 
CPT codes 27447 and 27130. The BPCI Advanced model tests 34 clinical 
episode categories which can be found here: https://innovation.cms.gov/media/document/bpci-adv-clin-ep-lists-my6-mar2023.
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     Should CMS test new clinical episode categories?
     How many clinical episode categories or service line 
groupings should be tested?
     Should CMS consider alternatives to a 30-day episode 
length? If so, include evidence to support this marker as the most 
appropriate transition point from the hospital to the primary care 
provider.
     Which clinical episodes are most appropriate for 
collaboration between episode-based model participants and ACOs?
     Are there particular types of items or services that 
should be excluded from clinical episodes?
     Are there other considerations for selection criteria that 
are of interest to other payers?
     Aside from episode selection,reducing the duration of an 
episode of care, and the types of services in an episode, what other 
ways can CMS prevent unnecessary overlap with ACO functions?
     For which clinical episodes are ACOs better positioned 
than episode-based payment model participants to efficiently manage 
care?
     Should different participants be accountable for different 
clinical episodes? For example, if both hospitals and physician group 
practices (PGPs) are participants in the episode-based payment model, 
should hospitals be accountable for a certain clinical episode category 
(for example, congestive heart failure) or a certain clinical episode 
type (for example, medical episodes vs. surgical episodes) as compared 
to PGPs?

C. Participants

    A key component of any APM is defining model participants. For 
episode-based payment models, the participant generally assumes 
accountability for cost and quality performance. Often, the type and 
setting of clinical episodes will dictate who is eligible to 
participate. The ability to bear financial risk, availability of 
resources, prior value-based care experience, and downstream entities 
may inform participant eligibility. Participant eligibility differed 
between BPCI Advanced and CJR, and other entities have also expressed 
interest in being participants in future episode-based payment models.

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1. BPCI Advanced Participants
    The BPCI Advanced model has convener and non-convener participants. 
A convener bears and apportions financial risk and facilitates 
coordination among one or more ``downstream episode initiators.'' In 
contrast, a non-convener participant bears financial risk only for 
itself and does not have any downstream episode initiators. Non-
convener participants and downstream episode initiators must be either 
an acute care hospital or PGP.
    Convener participants have generally been the dominant participant 
type in BPCI Advanced. Conveners provide support such as analytics, 
care navigators, and administrative assistance to their downstream 
episode initiators, who otherwise may not have joined the model. 
However, this arrangement was challenging for some hospitals and PGPs 
participating as downstream episode initiators as they were removed 
from decision-making, including when to exit the model. Further, 
convener participants are required to have financial guarantees that 
can impose significant upfront financial investment for participation.
2. CJR Participants
    The participant structure of the CJR model is more straightforward 
than BPCI Advanced. Acute care hospitals in select metropolitan 
statistical areas are the only participants to trigger an episode and 
be held accountable for cost and quality performance. When CJR was 
implemented in 2016, we believed that the best policy approach was to 
assign financial accountability to large entities, such as hospitals, 
that care for a higher volume of Medicare beneficiaries. However, we 
recognized the importance of smaller entities, such as PGPs, and 
allowed gainsharing arrangements and other flexibilities to support 
collaboration with participating CJR hospitals.
3. Other Entities
    Aside from hospitals and PGPs, other providers have signaled 
interest in managing or initiating clinical episodes. Expanding 
provider or participant eligibility may increase model scope, but it 
also adds operational complexity and reduces the likelihood of a 
seamless care experience for the beneficiary. For this reason, CMS 
attributes episodes to a single entity, regardless of the number of 
providers involved. Precedence rules generally dictate to which entity 
an episode of care is attributed, but these rules are often difficult 
for participants to follow. Data feeds inform entities of episode 
attribution when multiple providers have interacted with the 
beneficiary, but participants still express challenges with identifying 
their potential episodes due to lack of real-time data.
    We request feedback on the following participant questions:
     Given that some entities may be better positioned to 
assume financial risk, what considerations should CMS take into account 
about different types of potential participants, such as hospitals and 
PGPs?
    ++ Should CMS consider flexibilities for PGPs to participate, such 
as a delayed start or a glide path to full financial risk?
    ++ How should CMS identify a PGP given the ability to form new 
practices and obtain new Tax Identification Numbers, and given the 
movement of suppliers within a PGP?
    ++ How can CMS ensure PGPs will remain engaged and accountable for 
their contributions to managing the episode of care?
     What concerns are there with conveners not being formal 
participants in this model since CMS cannot require entities that do 
not particiate in the Medicare program? \18\
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    \18\ Participants could still choose to partner with a convening 
organization to receive similar services, such as data analytics or 
care navigators.
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     Should CMS continue using precedence rules to attribute 
clinical episodes to a single accountable entity or consider weighted 
attribution for multiple accountable entities?
    ++ How could weighted attribution work?
    ++ How should incentives be structured to promote shared 
accountability and ensure program integrity?

D. Health Equity

    Health equity is a pillar of the Biden Administration, as mentioned 
in Executive Order (E.O.) 13985, the HHS 2022-2026 Strategic Plan, and 
the CMS 2022 Strategic Plan, and it is one of the five objectives in 
the Innovation Center's 2021 Strategy Refresh.\19\ BPCI Advanced and 
CJR were designed prior to this more intentional focus on equity, but 
both models allow safety-net hospital participation and incorporate 
risk adjustment for dually eligible beneficiaries. We recognize there 
is room for improvement and intend to advance health equity through the 
design, implementation, and evaluation of this next episode-based 
payment model.
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    \19\ CMS Innovation Center Strategic Direction (https://innovation.cms.gov/strategic-direction) and CMS Strategic Plan 
(https://www.cms.gov/cms-strategic-plan).
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    The CJR 5th Annual Report and several independent studies display a 
widening, statistically significant gap between lower extremity joint 
replacement (LEJR) rates between the control group and CJR episodes and 
beneficiaries who are Black/African American and those who are 
white.20 21 22 23 While CJR potentially had an unfavorable 
impact on LEJR utilization rate, these studies acknowledge the presence 
of pre-existing disparities before the implementation of the CJR model. 
Future evaluations will capture the recent changes to the CJR risk 
adjustment methodology to include beneficiaries who are dually-eligible 
and the inclusion of safety-net hospitals. The impacts of these changes 
will inform the development and use of future risk adjustment 
strategies in episode-based models.
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    \20\ CJR Fifth Annual Report (https://innovation.cms.gov/data-and-reports/2023/cjr-py5-annual-report).
    \21\ Thirukumaran, C.P., Yeunkyung, K., Cai, X., C., Ricciardi, 
B.F., Yue, L., Fiscella, K.A., Mesfin, A., & Glance, L.G. (2021). 
Association of the Comprehensive Care for Joint Replacement Model 
with Disparities in the Use of Total Hip and Total Knee Replacement. 
JAMA Network Open, 4 (5), e2111858.
    \22\ Ko, H., Martin, B.I., Nelson, R.E., & Pelt, C.E. (2022). 
Patient Selection in the Comprehensive Care for Joint Replacement 
Model. Health Services Research, 57, 72-90.
    \23\ Kim, H., Meath, T.H.A., Qui[ntilde]ones, A.R., McConnell, 
K.J., & Ibrahim, S.A. (2021). Association of Medicare Mandatory 
Bundled Payment Program with the Receipt of Elective Hip and Knee 
Replacement in White, Black, and Hispanic Beneficiaries. JAMA 
Network Open, 4 (3), e211772.
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    Improving access to high-quality, patient-centered care is a goal 
for the Innovation Center, and ensuring underserved beneficiaries are 
adequately represented in value-based care models may help reduce 
inequities when designed with the proper incentives. The BPCI Advanced 
Model's 4th Annual Report provides evidence that medical episodes may 
have greater reach to underserved populations than surgical episodes, 
because underserved populations are more likely to be admitted to a 
hospital due to a medical condition than due to a surgery.\24\ 
Therefore, medical episodes may provide a greater opportunity to reach 
underserved beneficiaries in episode-based payment models, and by 
extension decrease discrepancies in care.
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    \24\ BPCI Advanced's 4th Annual Report (https://innovation.cms.gov/data-and-reports/2023/bpci-adv-ar4) covers health 
equity findings from 2020-2021.
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    The Innovation Center is also committed to prioritizing the unique

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needs of providers who care for a large proportion of underserved 
populations. This includes flexibilities providers may need to be 
successful in future models. Further, to help address the increased 
social needs of underserved populations, future episode-based payment 
models will need to consider the use of area level indicators, such as 
the social deprivation index (SDI), the social vulnerability index 
(SVI), and the area deprivation index (ADI).\25\ These indicators would 
not only help address the increased social needs of beneficiaries, but 
would also help determine if additional risk adjustment variables would 
increase future models' reach to underserved groups.
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    \25\ Refer to Table 2.1 in the Landscape of Area-Level 
Deprivation Measures and Other Approaches to Account for Social Risk 
and Social Determinants of Health in Health Care Payments document 
(https://aspe.hhs.gov/sites/default/files/documents/ce8cdc5da7d1b92314eab263a06efd03/Area-Level-SDOH-Indices-Report.pdf) 
for descriptions of ADI, SDI, and SVI.
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    To illuminate the potential health equity impacts of a new episode-
based payment model and to help ensure the goals laid out in the CMS 
Strategic Plan and the Innovation Center Strategy Refresh are met, we 
request feedback on the following questions:
     What risk adjustments should be made to financial 
benchmarks to account for higher costs of traditionally underserved 
populations and safety net hospitals? (Quality measurement is addressed 
more thoroughly in the next section of this RFI.)
     Should episode-based payment models employ special 
adjustments or flexibilities for disproportionate share hospitals, 
providers serving a greater proportion of dually eligible 
beneficiaries, and/or providers in regions identified with a high ADI, 
SVI, or SDI?
     What other factors could be considered for providers who 
serve underserved beneficiaries or beneficiaries who experience social 
risk factors? Can measure stratification among patient subgroups and 
composite health equity measures improve how CMS identifies and 
quantifies potential disparities in care and outcomes?
     Based on the BPCI Advanced 4th Annual Report findings and 
the increased reach of medical episodes for underserved populations, 
should the next episode-based payment model have a larger focus on 
medical or surgical episodes?
     What metrics should be used or monitored to adjust payment 
to assure health disparities are not worsened as an unintended 
consequence?
     Aside from claims data, what data sources would be 
valuable for evaluation and tracking of health equity?
    ++ What data or metrics or both should we share with participants 
to ensure they are addressing gaps in clinical outcomes and access to 
appropriate procedural care and with what frequency?
    ++ What data or metrics or both should we share publicly to help 
inform beneficiaries of provider performance?
     What provider-level initiatives or interventions, such as 
shared decision-making, could be considered to ensure equitable access 
to procedures and treatments for beneficiaries?

E. Quality Measures and Multi-Payer Alignment

    In accordance with section 1115A of the Social Security Act (the 
Act), the Innovation Center tests models that are expected to improve 
or maintain quality of care while reducing or maintaining program 
expenditures.\26\ Current and prior models have used a combination of 
claims data, participant-reported or registry-based quality measures, 
and patient-reported outcome (PRO) measures to incentivize improvement 
and assess model and participant performance. To reduce provider 
burden, the Innovation Center is focused on including multi-payer 
alignment approaches, where feasible.
---------------------------------------------------------------------------

    \26\ Section 1115A of the Social Security Act (https://www.ssa.gov/OP_Home/ssact/title11/1115A.htm).
---------------------------------------------------------------------------

    The CJR model assesses participant hospitals on a composite quality 
score, which is based on the Hospital-Level Risk-Standardized 
Complication Rate Following Elective Primary Total Hip Arthroplasty 
and/or Total Knee Arthroplasty measure (CBE #1550 \27\), the Hospital 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Survey measure (CBE #0166), and voluntary total knee and total hip 
arthroplasty PRO submission.
---------------------------------------------------------------------------

    \27\ In previous years, we referred to the consensus-based 
entity (CBE) by corporate name. We have updated this language to 
refer to the consensus-based entity more generally. See footnote 166 
of the FY 2024 inpatient prospective payment systems (IPPS)/long-
term care hospitals (LTCH) prospective payment system (PPS) proposed 
rule (88 FR 27025) (https://www.federalregister.gov/documents/2023/05/01/2023-07389/medicare-program-proposed-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals).
---------------------------------------------------------------------------

    The BPCI Advanced model relies on care coordination across settings 
to improve quality and reduce costs for certain clinical episodes. 
Participants can choose to report a maximum of 5 measures under either 
the Administrative Quality Measure Set or Alternate Quality Measure 
Set. The Administrative Quality Measure set uses claims-based measures, 
including 3 required measures--Hospital-Wide All-Cause Unplanned 
Readmission Measure (CBE #1789), Advance Care Plan (CBE #0326), and CMS 
Patient Safety Indicators PSI 90 (CBE #0531)--and 3 additional measures 
which are appropriate for certain episodes. The Alternate Quality 
Measure Set requires reporting on the Hospital-Wide All-Cause Unplanned 
Readmission Measure (CBE #1789) and Advance Care Plan (CBE #0326) 
measures, and includes 23 more clinically-aligned measures appropriate 
for specific episodes. These measures are derived from registries and 
inpatient quality reporting, as well as claims.
    The Innovation Center recently conducted a review of 21 Medicare 
models implemented between 2012 and 2020.\28\ The evaluation, which 
examined relative performance on costs and quality, found two-thirds of 
the models demonstrated significant gross savings, but most showed no 
significant improvement in patient experience or mortality. Notably, 
the CJR model and surgical episodes managed by PGPs in the BPCI 
Advanced model significantly decreased readmissions, although neither 
model showed improvement in patient experience or reductions in 
emergency department use. The heterogeneity of quality measures used 
across models made relative assessment difficult and limited comparison 
to a handful of metrics for a subset of models. For example, self-
reported experience of care was only measured in 12 of the 21 models.
---------------------------------------------------------------------------

    \28\ The Synthesis of Evaluation Results Across 21 Medicare 
Models (https://innovation.cms.gov/data-and-reports/2022/wp-eval-synthesis-21models) highlighted that decreases in spending were most 
significant among acute and specialty care models, largely driven by 
lower utilization--5 models reduced emergency department (ED) visits 
and 8 reduced inpatient readmissions.
---------------------------------------------------------------------------

    CMS is committed to improving alignment across models and programs 
to simplify relative comparison of quality performance, to effectively 
track quality, outcomes, patient experience, and interoperable exchange 
of care data to generate evidence for determining whether, and to what 
extent, individual models improve care quality. This is in line with 
the broader CMS National Quality Strategy, including an effort to move 
toward digital quality measurement,\29\ and recently announced plans to 
employ a ``Universal Foundation'' of quality measures to create greater 
consistency

[[Page 45878]]

in primary care quality reporting.\30\ As an extension of that aim, and 
with a particular focus on specialty care, the Innovation Center is 
considering how to increase the use of model-specific measures and 
adopt a more person-centered quality strategy, including greater use of 
PRO measures.
---------------------------------------------------------------------------

    \29\ dQM Strategic Roadmap (https://ecqi.healthit.gov/dqm).
    \30\ Jacobs, D.B., Schreiber, M., Seshamani, M., Tsai, D., 
Fowler, E., & Fleisher, L.A. (2023). Aligning Quality Measures 
across CMS--The Universal Foundation. New England Journal of 
Medicine, 388 (9), 776-779. DOI: 10.1056/NEJMp2215539.
---------------------------------------------------------------------------

    To that end, we are seeking feedback on how to best align quality 
measurement between new and established models and across payers, how 
other payers have approached quality measurement in episode-based 
models, and potential areas of alignment for a future episode-based 
payment model.
     Which quality measures, currently used in established 
models or quality reporting programs, would be most valuable for use 
across care settings?
     What quality measures are other payers using to drive 
improvements in clinical episodes?
     What PRO measures should CMS consider including in this 
next episode-based payment model?
    ++ Are payers testing or finding success with any PRO measures in 
existing episode-based models?
     In what specific measurement areas can CMS improve upon 
the current Inpatient Quality Reporting and Value-Based Purchasing 
measure sets \31\ to better capture performance on acute medical and 
surgical episodes and the interoperable exchange of patient data 
between coordinating providers?
---------------------------------------------------------------------------

    \31\ The Acute Care Hospital Quality Improvement Program 
Measures FY 2025 reference guide (https://qualitynet.cms.gov/inpatient/iqr/measures) provides a comparison of measures for five 
CMS acute care hospital quality improvement programs.
---------------------------------------------------------------------------

     The CAHPS[supreg] for the Merit-based Incentive Payment 
System (MIPS) includes questions to assess the degree to which shared 
decision-making has been implemented in the outpatient setting. How can 
CMS most effectively measure these activities in the hospital setting?
     What supports can this new model provide for decreasing 
burden of data collection?
    ++ How can registries, electronic health records, and other quality 
reporting systems reduce reporting burden for participants?
    ++ What approaches are providers currently utilizing that would 
create opportunities for payer alignment?
    ++ Are there opportunities to reduce provider burden across 
episodes through multi-payer alignment of quality measures and social 
risk adjustment?

F. Payment Methodology and Structure

    Payment methodology is a key element of an episode-based payment 
model. While there are notable differences between the CJR and BPCI 
Advanced payment methodologies, the models are built on a similar 
underlying payment structure wherein participants receive preliminary 
target prices prior to the performance period, are paid through the 
traditional Medicare FFS payment systems during a performance period, 
and are subject to a retrospective payment reconciliation calculation 
after the performance period. This reconciliation calculation compares 
the participant's FFS spending to an adjusted target price, with the 
participant either earning a reconciliation payment or owing a 
repayment to Medicare. This retrospective reconciliation process avoids 
the need for changes to Medicare FFS claims-processing systems and for 
participants to pay downstream providers who deliver services during 
the episode, as is done with prospective model payments. However, both 
models have been subject to challenges with regard to various aspects 
of the payment methodology, including reconciliation timing, target 
price methodology, and risk adjustment.
1. Reconciliation Timing
    CMS has tried to balance participants' desire to receive 
reconciliation results as close as possible to the performance period, 
while also allowing for sufficient claims runout to finalize the 
results and minimize the administrative burden of multiple 
reconciliations. Still, participants have indicated difficulty 
investing in and maintaining care redesign activities, as the incentive 
payments that support these activities are paid well after they have 
occurred. Reconciliation timing for BPCI Advanced, CJR, and the CJR 
extension are summarized in Table 1.

                                  Table 1--Comparison of Reconciliation Timing
----------------------------------------------------------------------------------------------------------------
                                       BPCI Advanced model    CJR performance years
                                         years (MYs) 1-8            (PYs) 1-5           CJR extension PYs 6-8
----------------------------------------------------------------------------------------------------------------
Performance Period.................  6 months..............  1 year \32\...........  1 year.\33\
Number of Reconciliations per        3.....................  2.....................  1.
 Performance Period.
Approximate Claims Runout (from      3 months, 9 months, 15  2 months, 14 months...  6 months.
 last episode).                       months.
----------------------------------------------------------------------------------------------------------------

2. Target Prices
    Reconciliations are based on comparison of performance period 
spending and the target price for a given participant and episode. The 
method of calculating target prices has changed over time for both CJR 
and BPCI Advanced, as CMS has sought to balance the need for 
predictable and achievable target prices with the need to respond to 
market changes and allow a reasonable likelihood of overall Medicare 
savings. Key features of the target price methodology for BPCI 
Advanced, CJR, and the CJR extension are summarized in Table 2.
---------------------------------------------------------------------------

    \32\ With the exception of years impacted by COVID.
    \33\ With the exception of years impacted by COVID.

                                      Table 2--Comparison of Target Pricing
----------------------------------------------------------------------------------------------------------------
                                  BPCI Advanced (MYs  BPCI Advanced (MYs                       CJR extension (PY
                                         1-3)                4-8)            CJR (PY 1-5)            6-8)
----------------------------------------------------------------------------------------------------------------
Baseline Claims Period..........  4 years...........  4 years...........  3 years...........  1 year.
Frequency of Baseline Update....  Annual............  Annual............  Every 2 years.....  Annual.\34\

[[Page 45879]]

 
Baseline Claims Blend...........  Participant         Participant         PY 1-2: \2/3\       Regional Only.
                                   Historical          Historical          Participant, \1/
                                   Claims, Patient     Claims, Patient     3\ Regional. PY
                                   Case Mix, Peer      Case Mix, Peer      3: \1/3\
                                   Group               Group               Participant, \2/
                                   Characteristics,    Characteristics,    3\ Regional. PY 4-
                                   Peer Group Trends.  Peer Group Trends.  5: Regional Only.
Adjustments at Reconciliation...  Patient Case Mix    Patient Case Mix    Quality Adjustment  Regional Market
                                   Adjustment,         Adjustment, Peer                        Trend Factor,
                                   Quality             Group Trend                             Normalization
                                   Adjustment.         Factor                                  Factor, Quality
                                                       Adjustment,                             Adjustment.
                                                       Quality
                                                       Adjustment.
----------------------------------------------------------------------------------------------------------------

    The CJR and BPCI Advanced models initially used a prospective trend 
methodology to project future episode spending to construct target 
prices. However, early reconciliation results from both models, 
combined with nationwide spending data, suggested that the prospective 
trend had not accurately captured national changes in spending patterns 
during the model performance period, resulting in reconciliation 
payments that were higher than needed to incentivize care coordination. 
To more accurately reflect performance period episode costs and to help 
minimize the risk that the models increased spending, CMS incorporated 
a retrospective trend into the target price methodology for both 
models, allowing for a target price adjustment at reconciliation.\35\ 
However, a number of BPCI Advanced participants found the retrospective 
trend untenable, given the unpredictability and resulting challenge of 
gauging their performance in the model. The retrospective trend for 
most episodes was lower than the prospective trend had been in previous 
years, resulting in a downward adjustment to target prices at 
reconciliation and leading many participants to withdraw from the 
model.
---------------------------------------------------------------------------

    \34\ With the exception of PY 7, which repeated the use of 2019 
data as baseline in order to avoid the impact of COVID in 2020 data.
    \35\ Under section 1115A(b)(3)(B) of the Social Security Act, 
the CMS Innovation Center has a statutory obligation to modify or 
terminate models unless the model is expected to improve quality 
without increasing spending, reduce spending without reducing 
quality, or improve quality and reduce spending after testing has 
begun.
---------------------------------------------------------------------------

3. Risk Adjustment
    CMS recognizes that patients will require various levels of care, 
with differences in appropriate episode spending based on a number of 
factors. To acknowledge this variability and minimize the likelihood of 
participants preferentially selecting healthier patients for treatment 
in the model (also known as ``cherry picking''), CMS has included risk 
adjustment in both the CJR and BPCI Advanced payment methodologies. 
Factors used in risk adjustment are summarized in Table 3.
---------------------------------------------------------------------------

    \36\ While the patient characteristics used in risk adjustment 
has remained fairly consistent across Model Years, please see the 
BPCI Advanced Model Year 6 Target Prices Specifications (https://innovation.cms.gov/media/document/bpci-adv-targetprice-specs-my6-mar2023) for the most updated and complete list.
    \37\ Medicare Severity Diagnosis Related Group/Ambulatory 
Payment Classifications.
    \38\ The FY 2021 IPPS/LTCH final rule (85 FR 58432) created two 
new MS-DRGs that separated hospital discharges for LEJR with hip 
fracture (521, 522) from those without hip fracture (469, 470). CJR 
added these MS-DRGs to the model, which removed the need for an 
additional risk adjustment for hip fracture.
    \39\ Medicare Severity Diagnosis Related Group/Healthcare Common 
Procedure Coding System.

      Table 3--Comparison of Patient-Level Risk Adjustment Factors
------------------------------------------------------------------------
                                                       CJR extension (PY
  BPCI Advanced  (MY 1-8) \36\       CJR (PY 1-5)            6-8)
------------------------------------------------------------------------
MS-DRG/APCs,\37\ age, dual        MS-DRG, hip         MS-DRG/HCPCS,\39\
 eligibility status, disability    fracture \38\.      age group, dual
 as reason for Medicare                                eligibility
 eligibility, Hierarchical                             status, CJR HCC
 Condition Categories (HCCs),                          count.
 HCC count, recent health
 service resource use.
------------------------------------------------------------------------

    Risk adjustment in Innovation Center episode-based models is 
largely based on CMS claims and enrollment data. However, beneficiary 
characteristics from other sources, such as electronic health records 
or non-medical determinants of health, are not accounted for by the use 
of claims and enrollment data. CMS is considering ways to incorporate 
non-claims-based variables, if collected uniformly and documented 
consistently, to improve risk adjustment and address health equity. 
Interested parties have also recommended the inclusion of trigger event 
diagnosis codes to better capture beneficiary acuity. However, we are 
concerned that risk adjusting based on variables that occur 
contemporaneous to the episode could incentivize increased coding 
intensity.
4. Alternative Payment Approach
    In light of the CJR and BPCI Advanced payment methodology 
challenges, we are considering changes to our payment approach, such as 
incorporating elements of value-based purchasing. Under a value-based 
purchasing framework, participants are assessed on certain measures and 
their future Medicare FFS payments are adjusted up or down based on 
their performance. For instance, the Hospital Value Based Purchasing 
(VBP) program withholds 2% of the base operating MS-DRG payments of 
participating hospitals, and then redistributes those funds to 
hospitals in a future year via a payment adjustment based on their 
Total Performance Score across four domains (Clinical Outcomes, Person 
and Community Engagement, Safety, and Efficiency and Cost Reduction). 
Similarly, in the traditional Merit-based Incentive Payment System 
(MIPS), clinicians submit data on four domains (Quality, Promoting 
Interoperability, Improvement Activities, and Cost), and the MIPS final 
score determines a payment adjustment to future Medicare Part B claims. 
To avoid duplicating the existing value-based purchasing initiatives, 
we are considering blending the traditional payment approach by setting 
a target price but paying the reconciliation payment (or recouping the 
repayment amount) in future years as a multiplier or add-on to future

[[Page 45880]]

claims, rather than as a lump sum at the time of the reconciliation 
calculation. We anticipate that incorporating value-based purchasing 
design components could help to resolve concerns with pricing 
predictability and remove the operational burdens of the reconciliation 
process. We recognize this alternative approach, along with other 
payment methodology features, would require input from interested 
parties. Therefore, we request feedback on the following payment 
methodology questions.
     How should CMS balance the need for predictable, 
achievable target prices with the need to create a reasonable 
possibility of achieving net Medicare savings?
     How should CMS balance participants' desire to receive 
reconciliation results as close as possible to the performance period, 
while also allowing for sufficient claims runout to finalize the 
results and minimize the administrative burden of multiple 
reconciliations?
     How should risk adjustment be factored into payment for 
episode-based payment models?
    ++ How can risk adjustment be designed to guard against 
preferential selection of healthier patients (that is, cherry picking)?
    ++ What risk factors, including clinical or social, should be 
considered?
    ++ Which non-claims-based variables could be used to improve risk 
adjustment and address health equity, and how can CMS ensure that they 
are collected uniformly and documented consistently?
    ++ How can CMS account for apparent changes in risk that are 
actually due to changes in coding patterns rather than changes in 
health status?
     If CMS were to move toward a value-based purchasing 
approach for acute care episodes, what performance measures (including 
quality and utilization or cost measures) should participants be 
accountable for?
    ++ What level of payment adjustment to future claims would be 
sufficient to balance the need to: (1) incentivize coordination with 
physician group practices and post-acute care providers; (2) achieve 
savings or budget neutrality for Medicare; and (3) create a reasonable, 
but not onerous, level of downside risk for participants?
    ++ To what extent could quality measures already collected in 
existing value-based programs (for example, MIPS, MIPS Value Pathways 
(MVPs), post-acute care VBPs) be incorporated into an acute care 
episode-based payment model?
     How could CMS incorporate other non-claims-based 
variables, such as from electronic health records or non-medical 
determinants of health, to improve risk adjustment, care coordination, 
quality measurement, and/or address health equity?

G. Model Overlap

    The Innovation Center Strategic Refresh highlights the need to 
streamline the Innovation Center's model portfolio, reduce complexity, 
and capture broad provider participation.\40\ These lessons learned 
resonate when considering the challenges between the interactions of 
episode-based payment models and ACO initiatives. While CMS continues 
to learn from tested policies, none have consistently encouraged 
overlap or promoted meaningful collaboration between primary care and 
specialty care providers. Overlap policies were intended to avoid 
duplicative incentive payments or give precedence to a single 
accountable entity. In some cases, these policies resulted in confusing 
methodologies or misaligned incentives which were difficult for 
providers to navigate. Providers have also cited confusion with 
identifying to which model(s) a beneficiary may be aligned or 
attributed.
---------------------------------------------------------------------------

    \40\ CMS White Paper on CMS Innovation Center's Strategy: 
Driving Health System Transformation--A Strategy for the CMS 
Innovation Center's Second Decade (https://innovation.cms.gov/strategic-direction-whitepaper).
---------------------------------------------------------------------------

1. Duplicate Payments
    In earlier episode-based payment models, such as CJR (when 
applicable) and BPCI, CMS addressed overlap by implementing a complex 
calculation and recouping a portion of the pricing discount for 
providers participating in certain ACO initiatives. The recoupment was 
intended to prevent duplicate incentive payments for the same 
beneficiary's care. Yet some participants perceived the recoupment as a 
financial penalty, discouraging providers from participating in both 
initiatives. To avoid complexity, the CJR and BPCI Advanced models 
exclude overlap for beneficiaries aligned or assigned to certain ACOs, 
and these beneficiaries will not initiate a clinical episode.\41\
---------------------------------------------------------------------------

    \41\ Currently, the BPCI Advanced model does not allow overlap 
with the ACO Realizing Equity, Access, and Community Health (ACO 
REACH) model, the Vermont All-Payer ACO Model, and the Comprehensive 
Kidney Care Contracting (CKCC) Options of the Kidney Care Choices 
(KCC) Model. The CJR model does not allow overlap with the ENHANCED 
Track of the Medicare Shared Savings Program.
---------------------------------------------------------------------------

    While this exclusionary approach creates a clean demarcation of who 
is accountable for a beneficiary's care, it also limits the number of 
providers in accountable care relationships and becomes less tenable as 
we work towards the goal of increased accountability. Additionally, 
participants may be informed of beneficiary ACO alignment or assignment 
after the potential episode has been initiated and after the 
participant has expended resources for items or services not covered by 
Medicare on unattributed beneficiaries. This concern highlights the 
opportunity to incentivize coordinated care, expand care redesign 
efforts to more patients, and strengthen APM participation. Lastly, 
even passive avoidance of duplicate payments has its drawbacks such as 
lack of incentive to coordinate care. For example, the CJR and BPCI 
Advanced models allow overlap with the Medicare Shared Savings Program 
without a financial recoupment.42 43 However, this does not 
encourage behavior change to ensure a smooth transition back to 
population-based providers.
---------------------------------------------------------------------------

    \42\ The Medicare Shared Savings Program benchmark updates 
include retrospective county-level trends that implicitly reflect 
BPCI Advanced and CJR spending changes; such methodology helps 
mitigate potential overlap of federal outlays.
    \43\ The CJR model only allows overlap with the BASIC track of 
the Medicare Shared Savings Program.
---------------------------------------------------------------------------

2. Overlap
    Both episode-based payment models and ACOs have demonstrated 
successes in reducing post-acute care spending through reductions in 
skilled nursing facility length of stay or reduced institutional post-
acute care use.44 45 However, when the same beneficiary is 
included in both an ACO initiative and episode-based payment model, it 
may create confusion and inefficiencies. Providers in both models 
invest in care management and rely on the savings generated to support 
these functions. If those spending reductions are credited to only one 
of these entities, this may create a barrier for collaboration. 
Further, if an episode of care is priced too high, this can negatively 
impact the ACO's financial performance and add to inefficiencies 
between episode-based payment models and ACOs.
---------------------------------------------------------------------------

    \44\ Comprehensive Care for Joint Replacement Model: Fourth 
Evaluation Report; BPCI Advanced: Fourth Annual Report (https://innovation.cms.gov/data-and-reports/2021/cjr-py4-annual-report).
    \45\ McWilliams, J.M., Gilstrap, L.G., Stevenson, D.G., Chernew, 
M.E., Huskamp, H.A., & Grabowski, D.C. (2017). Changes in Postacute 
Care in the Medicare Shared Savings Program. JAMA internal medicine, 
177(4), 518-526. doi:10.1001/jamainternmed.2016.9115.
---------------------------------------------------------------------------

    Regardless of the issues identified, evidence suggests shared 
beneficiaries in episode-based payment models and

[[Page 45881]]

ACOs can lead to lower post-acute care spending and reduced 
readmissions.\46\ In light of findings like this, we believe overlap 
with episode-based payment models and ACOs should be supported through 
complementary policies. We want to avoid precedence or exclusionary 
rules for entities who may be required to participate in this next 
episode-based payment model. This means all of the participating 
entity's beneficiaries for a given clinical episode or service line 
group may be eligible to initiate an episode regardless of beneficiary 
ACO assignment/alignment. This may help the participant create standard 
care pathways for all beneficiaries and make it easier for ACOs to know 
which beneficiaries may be initiating a clinical episode. We also want 
to encourage overlap between this next model and ACO initiatives to 
support coordination and ensure providers are not carved out of a 
beneficiary's continuum of care. This means we must account for 
duplicate payments when there are shared beneficiaries. We are 
considering simple ways a target price can be factored into an ACO's 
benchmark, or how the target price can be adjusted to account for 
shared beneficiaries so that providers in both models have financial 
incentives to drive efficiency and coordinate care. We aim to resolve 
the previous model overlap challenges and request feedback for the 
following model overlap questions:
---------------------------------------------------------------------------

    \46\ Navathe, A.S., Liao, J.M., Wang, E., Isidro, U., Zhu, J., 
Cousins, D.S., & Werner, R.M. (2021). Association of Patient 
Outcomes With Bundled Payments Among Hospitalized Patients 
Attributed to Accountable Care Organizations. JAMA health forum, 
2(8), e212131. https://doi.org/10.1001/jamahealthforum.2021.2131.
---------------------------------------------------------------------------

     How can CMS allow beneficiary overlap with ACO initiatives 
yet ensure Medicare is not double-paying incentives for the same 
beneficiary?
    ++ Should the approach to prevent double-paying incentives differ 
depending on whether the participating entity is part of an ACO or 
particular type of ACO (for example, low revenue ACOs vs. high revenue 
ACOs, or one-sided vs. two-sided risk ACOs)?
    ++ What are the implications of allowing beneficiary overlap for 
model evaluation?
     How should CMS create a reciprocal overlap policy that 
incentivizes efficiency by the participant while the ACO is 
incentivized to use the participant for episodic care?
    ++ What risks or rewards should we include to drive collaboration?
    ++ What resources or data should CMS provide participants to ensure 
there is collaboration with ACO providers for shared beneficiaries?
    ++ What resources or data should CMS provide ACOs to ensure 
collaboration with participants for shared beneficiaries? How does this 
differ when the participant is not part of the ACO?
     How can CMS leverage this episode-based payment model to 
incentivize participants to join an ACO if not already a part of one?
    ++ Conversely, how can this episode-based payment model incentivize 
ACOs to partner with participants?
     How does CMS ensure episode spending aligns with ACO 
benchmarks, especially if ACO benchmark methodology changes?
     What levers, such as benefit enhancements or waivers, 
could be used to support participants to close the care loop back to 
primary care/ACOs?
     How can CMS design this model to spur ACOs to engage 
specialty care providers for episodes of care that may not be included 
in this model?

III. Collection of Information Requirements

    Please note, this is a request for information (RFI) only. In 
accordance with the implementing regulations of the Paperwork Reduction 
Act of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), this general 
solicitation is exempt from the PRA. Facts or opinions submitted in 
response to general solicitations of comments from the public, 
published in the Federal Register or other publications, regardless of 
the form or format thereof, provided that no person is required to 
supply specific information pertaining to the commenter, other than 
that necessary for self-identification, as a condition of the agency's 
full consideration, are not generally considered information 
collections and therefore not subject to the PRA.
    We note that this is a RFI only. This RFI is issued solely for 
information and planning purposes; it does not constitute a Request for 
Proposal (RFP), applications, proposal abstracts, or quotations. This 
RFI does not commit the U.S. Government to contract for any supplies or 
services or make a grant award. Further, we are not seeking proposals 
through this RFI and will not accept unsolicited proposals. Responders 
are advised that the U.S. Government will not pay for any information 
or administrative costs incurred in response to this RFI; all costs 
associated with responding to this RFI will be solely at the interested 
party's expense. We note that not responding to this RFI does not 
preclude participation in any future procurement, if conducted. It is 
the responsibility of the potential responders to monitor this RFI 
announcement for additional information pertaining to this request. In 
addition, we note that CMS will not respond to questions about the 
policy issues raised in this RFI.
    We will actively consider all input as we develop future regulatory 
proposals or future subregulatory policy guidance. We may or may not 
choose to contact individual responders. Such communications would be 
for the sole purpose of clarifying statements in the responders' 
written responses. Contractor support personnel may be used to review 
responses to this RFI. Responses to this document are not offers and 
cannot be accepted by the Government to form a binding contract or 
issue a grant. Information obtained as a result of this RFI may be used 
by the Government for program planning on a non-attribution basis. 
Respondents should not include any information that might be considered 
proprietary or confidential. This RFI should not be construed as a 
commitment or authorization to incur cost for which reimbursement would 
be required or sought. All submissions become U.S. Government property 
and will not be returned. In addition, we may publicly post the public 
comments received, or a summary of those public comments.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on July 11, 2023.

    Dated: July 13, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-15169 Filed 7-14-23; 11:15 am]
BILLING CODE 4120-01-P