Phase Two: Payment Reform


On August 27, 2015, the Centers for Medicare & Medicaid Services (CMS) announced a new funding opportunity to launch the second phase of this Initiative. In this phase currently participating Enhanced Care Coordination Providers (ECCPs) may apply to test whether a new payment model for long-term care (LTC) facilities and practitioners will improve quality of care by reducing avoidable hospitalizations, and whether the model can lower combined Medicare and Medicaid spending.

The intent of the new payment model is to reduce potentially-avoidable hospitalizations by funding higher-intensity treatment services in LTC facilities for residents who may otherwise be hospitalized upon an acute change in condition. Improving the capacity of LTC facilities to treat common medical conditions as effectively as possible on-site in the facilities, as appropriate, has the potential to improve the residents' care experience at lower cost than a hospital admission. During this phase of the Initiative, CMS is focusing on six medical conditions that, together, have been linked to about 80% of potentially avoidable admissions:

  • Pneumonia
  • Dehydration
  • Congestive Heart Failure
  • Urinary Tract Infection
  • Skin ulcers / Cellulitis
  • Chronic Obstructive Pulmonary Disease / Asthma

The model also includes Medicare payments to practitioners (i.e., physicians, nurse practitioners and physician assistants) at a level similar to the payments they would receive for treating beneficiaries in a hospital.  

Successful ECCP applicants are implementing the payment model with partner facilities continuing from Phase One as well as a number of newly recruited facilities. ECCPs and their partnering nursing facilities are also continuing the evidence-based clinical and educational interventions that they had implemented during the first phase of the Initiative. The payment model is slated to run for four years, from October 2016 to September 2020. 

Press release (August 27, 2015)

Fact sheet (August 27, 2015)

On March 24, 2016, CMS announced cooperative agreements with six ECCPs:

Alabama Quality Assurance Foundation - Alabama

HealthInsight of Nevada - Nevada and Colorado

Indiana University - Indiana

The Curators of the University of Missouri - Missouri

The Greater New York Hospital Foundation, Inc. - New York

University of Pittsburgh Medical Center (UPMC) Community Provider Services - Pennsylvania

Press release (March 24, 2016)

Page Last Modified:
10/29/2019 02:00 PM