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Phase Two: Payment Reform

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11/08/2017 The Frequently Asked Questions about Facility Billing (revised November 8, 2017) posted.

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 will focus on six medical conditions that, together, are 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. Practitioners will also be eligible to receive new payments for engagement in multidisciplinary care planning activities. 

Successful ECCP applicants will implement the payment model with both their existing partner facilities, where they currently provide training and clinical interventions, and in a comparable number of newly recruited facilities. The payment model is slated to run for four years, beginning at the conclusion of Phase One. 

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)

Successful applicants will also continue the evidence-based clinical and educational interventions from the first phase of the Initiative throughout the second phase. The new payment model will be tested both in the nursing facilities currently participating in the Initiative as well as a comparable set of newly-participating facilities selected by the ECCPs and CMS within the states listed above.