Recent attention has been paid to delivery system and finance redesign that strive to improve healthcare quality and reduce costs by focusing on care coordination and strategies that integrate the full spectrum of healthcare. This emphasis on the continuum of care from acute episode to follow-up, management, and maintenance is especially relevant to cardiovascular disease (CVD), a medical field that has grown larger and more complex with the emergence of new technologies and pharmaceuticals that prevent acute CVD events and address the chronic aspects of the disease. One area of CVD care, however, that has received less attention in the advancement of quality in this medical field is outpatient cardiac rehabilitation (CR), a comprehensive secondary prevention program that seeks to avoid subsequent cardiac events by managing risk and behavioral factors, including nutrition, physical activity, psychosocial interventions, and additional clinical management.1 Outpatient CR, however, is significantly underused despite evidence-based guidelines that recommend its use based on studies supporting its effectiveness in reducing morbidity and mortality resulting from CVD.2
The evidence indicates that a range of barriers at the patient, provider, and system levels bar the high utilization of outpatient CR.3 The literature discusses how to address obstacles at patient and provider levels, but there is little discussion regarding how to address inadequate CR financing, one of the most difficult barriers to overcome because it is a broad system-level problem.4 Low CR utilization rates reveal a gap in quality that reflects the nation’s fragmented healthcare system, which focuses on episodic care within a volume-based fee-for-service market structure rather than whole-person care spanning the comprehensive spectrum of services.
The burden of CVD is substantial in the United States. More than 1 in 3 American adults experiences some type of CVD, and more than one-third (813 804) of all deaths are attributed to the disease.5 Coronary heart disease (CHD) is the most common type of heart disease, with a nationwide prevalence of more than one quarter (25.7%) for adults 65 years or older.5 The financial burden of CVD is also substantial. Total costs of CVD and stroke were estimated to be $444 billion in 2010, accounting for more than 16% of all health expenditures in that year.6
Outpatient CR is a cost-effective component of the post–acute care management regimen for CHD patients with qualifying clinical diagnoses.7–9 (Qualifying diagnoses include acute myocardial infarction, coronary artery bypass graft surgery, percutaneous coronary interventions, valve repair or replacement, and heart transplantation.) The data on CR effectiveness show that consistent use of CR reduces mortality from CHD by 20% to 32%.10 Furthermore, CR reduces certain risks associated with CHD, secondary cardiac events, and coronary artery disease (CAD)–caused mortality as early as 3 to 6 months after initiation of the program, including systolic and diastolic blood pressure, high-density lipoprotein cholesterol, triglycerides, total cholesterol, and low-density lipoprotein cholesterol.11,12 Moreover, the evidence suggests that patients with CHD experience higher levels of quality of life with exercise-based CR than with usual care, especially between 3 and 6 months of CR participation.11,13 Finally, research suggests that CR can reduce readmissions and the need for further invasive procedures.8 In fact, the literature indicates that CR saves on rehospitalization expense and the net cost per quality-adjusted life years is moderate (if not zero).14 Indeed, a meta-analysis of cost-effectiveness shows that hospital-based savings made up about two-thirds of CR costs ($3671 in 2003 US dollars), with the cost per year of life saved only $6109 (in 2003 US dollars).8,15 Notwithstanding these benefits, only about 10% to 20% of CVD patients who are eligible for CR actually use it.2 Furthermore, racial and gender disparities in CR referral and use exist. Minorities are more than 2 times less likely to participate in CR than white patients are, even when clinically indicated.2 Similarly, CR-eligible women are 11% to 20% less likely than men to use CR.16
The literature identifies 3 primary health-system issues that contribute to the low and disparate use of outpatient CR among clinically eligible patients. First, physicians do not consistently refer eligible patients to CR and the decision to refer is more often based on economic or subjective factors than on the evidence-based clinical guidelines recommended by the American Heart Association and the American Association of Cardiovascular and Pulmonary Rehabilitation in their 2005 Scientific Statement.17
Second, the current structure of the healthcare system does not provide physicians with incentives to consistently promote and refer to CR programs.2 Competition for patients may discourage cardiologists from making outpatient CR referrals to nonaffiliated facilities.18 Furthermore, the fee-for-service model of healthcare rewards high-volume, high-cost care. Cardiac rehabilitation is neither—it is a finite program with low reimbursement rates relative to other cardiac therapies and, therefore, may not generate much attention or engagement from physicians.3
Third, the poor organizational and payment structure inherent in the current cardiac care system makes for substantial variation in referral rates across hospitals; in lower performing hospitals, referral rates are only about 20% and reach only 60% in higher ones.19 And although there is no guarantee that patients referred will enroll in a program, the literature suggests that lack of physician referral and lack of endorsement are the primary barriers.3,20 Thus, because of these system-based issues, patients are often not informed that CR is available to them or given the choice to use resources that can improve their health and well-being. Moreover, this approach to medicine discourages patients from actively participating in their own care.
Finally, because of these referral and utilization problems, CR programs are often a money-losing endeavor, which makes it all the more difficult to keep programs operational. As a result, health systems have reduced hours and closed programs, which can make it difficult for patients to find and use CR services.3 This creates a cycle where low referral rates and underutilization exacerbate access issues that then further impact utilization.
Today’s world of medicine, however, is changing. The principles of high-quality care require effective, efficient care that is coordinated across providers and engages the patient as an active and informed participant in healthcare choices. The system and financial-based issues that discourage physicians from referring to CR appear to be creating barriers that undermine the fundamental tenets of this approach to care. In this analysis, we examine how 2 payment models could be used in cardiac care to improve the utilization of CR programs: (1) pay-for-performance and (2) bundled payments for episodes of care. On the basis of the literature that supports the financial and clinical short- and long-term benefits of CR use, we believe that higher utilization could improve both quality and efficiency. Although these programs were designed for acute care settings, we suggest how their application to the outpatient rehabilitation setting could be used to encourage higher, more consistent referral rates, as well as reduce competition and turf issues among providers by ensuring that CR is part of the outpatient regimen of care no matter where a patient goes.
Pay-for-performance, or using rewards and penalties to encourage the provision of high-quality care, is not a new concept in cardiovascular care. Currently, hospitals are required to report on a core set of performance metrics, including cardiac and pulmonary quality measures, as part of Medicare’s Hospital Inpatient Quality Reporting program. Hospitals that fail to report on the measures face a penalty of a 2–percentage point reduction in their annual market basket payment update.21 The Medicare Hospital Value-Based Purchasing (VBP) program expands this initiative by providing financial rewards to hospitals based on performance of key measures and maintaining the penalty for nonreporters.22
Drawing from the evidence-based clinical guidelines, the American Association of Cardiovascular and Pulmonary Rehabilitation, the American College of Cardiology Foundation, and the American Heart Association have developed quality performance measures around referrals to CR and the core components of CR programs in an effort to increase awareness of CR, increase standardization of offerings across CR programs, and reduce the service utilization gap.1 The performance measure for the appropriate referral of patients to outpatient CR, which have been endorsed by the National Quality Forum, requires the referral of eligible patients to a CR program and reflects the recommendations included in a number of clinical practice guidelines for cardiovascular care.23–25
Permanent inclusion of the referral measure in the CVD core measures could have significant implications for outpatient CR programs. First, it would standardize the criteria for referral to CR by positioning it within the clinical practice guidelines, which identify the qualifying events for which CR should be prescribed and the provider responsible for ensuring referral occurs. This could reduce the often subjective decisions that physicians seem to make regarding whether and who to refer to CR and place the responsibility of referral on physicians overseeing the care of CAD patients. If the referral measure is coupled with the requirement that referrals be made to American Association of Cardiovascular and Pulmonary Rehabilitation-certified programs, the quality of care is further ensured. Moreover, if the measures are linked to payment or required by Centers for Medicare and Medicaid to receive full reimbursement for hospital care, adherence to the measure and, therefore, to CR referral could improve. Finally, a referral measure is more likely to hold providers accountable for ensuring that patients receive the best possible care as recommended in evidence-based guidelines than the guidelines alone.
The adoption of the measure could also support a shift in the conceptualization of CAD care from a series of services treating an acute event to a continuum of care addressing both acute and chronic aspects of the disease. Indeed, the measure rewards not only clinical quality but also care coordination.
Bundled Payment for Episodes of Care
Paying providers a bundled payment for a defined episode of care is another payment model that is gaining traction in cardiovascular care as a system-based approach that may promote quality and efficiency of care. Adoption of this model, if clearly defined to include outpatient CR, may increase referrals and strengthen connections between cardiac providers and CR programs and could possibly improve quality and efficiency of care for CAD patients.
In episode-based care, reimbursement for healthcare services are bundled into a single, comprehensive payment that covers the multiple services and providers involved in the care of a patient during a predefined episode. Medicare’s diagnoses-related group payment system is 1 example of bundled payments for all care provided during a hospital stay. Episodes are identified and applied to acute events, where payment covers defined services associated with the event with a clear start and end-point, as well as chronic conditions where coverage includes all care required during a period of time (eg, a year).26 Regardless of the disease/event application, current thinking around episode-based, bundled payment includes payment for inpatient, outpatient, physician, and some ancillary care for a defined period of time, generally with financial incentives for delivering care more efficiently across the episode. This payment system requires providers across the spectrum to work together to provide efficient and coordinated care to maximize the episode-based payment.
Coronary artery bypass graft (CABG) surgery has been used in at least 3 test cases of episode-based bundled payments, with some success. In each of these cases, the defined episode began with the acute event requiring surgery, but components of the programs vary, including the defined time period for the episode and the services included in the bundle.
In an early demonstration project around bundled payments, the Medicare Participating Heart Bypass Center Demonstration (1991–1996) included 7 hospitals, each of which received a single bundled payment for coronary artery bypass surgery. The reimbursement covered all related inpatient and physician services within a 90-day postdischarge timeframe but did not include CR or other secondary preventive services.27 An evaluation of the demonstration showed that Medicare saved $42.3 million on bypass patients and that participating hospitals saved between $1.7 million and $15 million. Furthermore, beneficiaries (and their insurers) saved $7.9 million in part B coinsurance payments. Patient outcomes also improved with declines of an average of 8% in mortality rates and of length of inpatient stay by 12 to 24 hours.28
Beginning in 2006, Geisinger Health System’s ProvenCare program began bundling payment for all nonemergency CABG procedures. The episode-based payment pays for 40 discrete care-process steps during a period of 30 days before and 90 days after a CABG procedure. Payment includes a preoperative evaluation, healthcare professional and hospital fees, routine postdischarge care (like CR and smoking cessation counseling), and complications management (including readmissions).29 An evaluation of ProvenCare indicates a 5% drop in hospital costs on CABG episodes of care, a reduction in the average CABG length of stay by half a day, and a cut in the 30-day readmission rate by 44%.30
A more recent initiative is Medicare’s Acute Care Episode Demonstration, which began in 2009 and will be implemented for 3 years. Currently, Medicare pays 5 participating physician-hospital organizations a flat fee, determined through a competitive bidding process, to cover all hospital and physician services pertaining to an inpatient stay for CABG surgery rendered for Medicare fee-for-service beneficiaries.31 The bundled payment is applied to the window covered by existing Medicare hospital inpatient prospective payment system rules, including 1 day of preoperative services and testing, the surgery itself, and 90 days of postoperative care including CR.32,33 Demonstration evaluation results regarding patient outcomes and cost savings are not yet available. However, the Acute Care Episode Demonstration holds the provider accountable through gain-sharing arrangements, whereby participating sites are given discretion to compensate clinicians or other hospital staff who reach clinical quality improvement measures.34
In each of these programs, cost reduction and quality improvement were achieved through a variety of mechanisms, including elimination of wasteful and duplicative healthcare services, greater alignment and coordination between hospitals and physicians, and greater adherence to clinical guidelines. Given this evidence, bundled payments for cardiac episodes appear to be both feasible and promising as a model to improve quality and increase efficiency.
Four key issues around bundled payments for CAD events would need to be clearly defined, however, for this model to truly initiate a shift in whether and how outpatient CR is integrated into the organization and payment of cardiac care: (1) how an episode is defined, (2) how to hold providers accountable for the care they provide, (3) how to encourage participation among CR providers, and (4) how to determine an equitable distribution of payment.
To benefit from this type of payment and delivery structure, the definition of CAD episodes (for which CR is prescribed) must explicitly include inpatient and outpatient CR services. Thus, the time period for an episode would need to extend beyond the more typical 30-day postdischarge episode to ensure enough time for outpatient CR to be completed. With a recommended 36 sessions conducted 2 to 3 times per week, the time period for attending CR can often extend to 4 to 6 months. Defining the episode for this period would increase the incentive to refer because it would capture the longer term benefits that accrue from CR, including management of postdischarge regimens and reduction of risks that can prompt a secondary event and other postdischarge complications.35
In addition, evidence-based clinical guidelines hold providers accountable by deeming CR as the standard of care for CAD for clearly identified qualifying diagnoses. Adding to this standard, the requirement that participating CR programs have American Association of Cardiovascular and Pulmonary Rehabilitation certification would further ensure the high quality of care provided and reduce variability in CR program offerings. Designing a bundled payment to include certified CR programs simply follows the already established quality framework. Moreover, the guidelines, coupled with the National Quality Forum–endorsed CR performance measure around referrals and those around the core components of CR, help with the identification of benchmarks and goals for providers to ensure referral and adherence to high-quality CR. Geisinger’s ProvenCare project has demonstrated the quality improvement and cost reductions associated with a bundled payment that included rewards to providers for complete compliance with all individual performance metrics based on evidence-based clinical measures.
Because outpatient CR facilities are generally owned or closely affiliated with a hospital or health system, the hospital, along with the patient’s cardiologist, should be assigned primary responsibility for care during the defined episode. The shared responsibility would promote not only initial CR referral but also follow-up by the physician to promote initial take-up. This model of accountability is consistent with those in the demonstration projects on CABG.28,29 These providers would need to negotiate the shared payment methods with participating CR providers and the measures of accountability that would in included. Determining the most equitable distribution of payment across the providers involved in an episode of care is the biggest challenge from an outpatient CR perspective. Using evidence-informed case rates such as those used in the Prometheus model as opposed to historical costs should be considered initially to set the payment rates, as historically CR utilization is so low it is unlikely historical costs would capture the true cost of CR programs. In addition, CR distribution of payment to the CR facility should be set above current Medicare reimbursement rates (which are considered low) to cover the comprehensive clinical and care management services that CR imparts.
Given the evidence regarding the impact of pay-for-performance and bundled payment, one approach that may be promising is combining the 2 models, organizing care around a defined CAD episode to address the key obstacles in the current delivery and reimbursement system that undermine outpatient CR use. With a single, comprehensive payment covering a group of clinicians and a predefined bundle of CAD services, clinicians would be expected to provide high-quality, efficient care to their CAD patients, which would include CR. The shared accountability embedded in the model would require physicians to cooperate and coordinate services, which could reduce competition for patients while increasing referrals. Furthermore, this model could improve the consistency of referrals according to guidelines based on clinical factors rather than subjective factors. This combined approach would also include performance measures to improve the core components of certified CR programs and hold providers accountable for consistently referring patients to CR; it could also reduce the disparities in referrals that have been revealed in a number of national studies.19,36,37 As an incentive to engage in continuous quality improvement in the CR core components, CR provider performance would be tracked using Agency for Healthcare Research and Quality benchmarks, which are currently being piloted.38 Those programs that reach the benchmarks would be awarded additional payments, above and beyond those shared among bundled providers. These higher levels of payment would remain as long as the benchmarks are achieved.
Finally, bundled payments do not carry the same risk as global or capitated models do, which should make this type of payment reform more palatable to hospitals and health systems. Payment by episodes gives providers the flexibility to define “the right mix of services at the right time,” to promote consistent referral according to guidelines, and to limit the time period, which allows providers to control and define resource use and reduce financial risk.39
Despite the arguments to include outpatient CR in CAD episodes of care, some challenges could arise that might make providers hesitant to do so. Extending the time period for a CAD episode to 4 or 6 months and including another set of providers in the “episode mix” increase the risk to the primary providers, who are accountable for ensuring that care within the episode and across the multiple providers is both efficient and of the highest quality. Moreover, although evidence suggests an improvement in risk factors 3 to 6 months after initiation of CR, the extended time period may still be too short to capture full health and, therefore, cost benefits.
In addition, a recent study on the payment project also suggests that although participants are aware of the bundled payment model’s potential value, implementation requires significant time and effort.40 Hospitals and physicians, who may think CR use serves only to increases utilization and drive up costs and who are reluctant to take on the time and effort needed to successfully implement such a payment model, would need to be convinced that promoting CR does in fact provide the best, most efficient care.
Moreover, because of the accountability issue, episode-based care may be particularly difficult to implement in highly dispersed and fragmented healthcare markets. Moreover, safety net hospitals, where many of the disadvantaged, underreferred cardiac patients seek care, would need to ensure that their unique challenges and patient populations do not unfairly penalize them in any episode-based payment scheme. Episode payments would need to reflect the higher costs and services required of certain patients with low-income and social challenges. Finally, inclusion of outpatient CR in a bundled payment could potentially threaten the comprehensiveness of its care. If the payment rate of CR is set too low to cover the supplementary services it provides (eg, smoking cessation programs, risk management counseling), facilities may be forced to turn to exercise-only programs or programs with only partial services, which undermines its effectiveness and its ability to provide cost savings in the longer term.
Given the lack of inclusion of CR or other outpatient heart disease programs in current cardiac care bundled payment and pay-for-performance programs, no studies demonstrating the quality and cost benefits of these models on such programs exist. Despite the lack of strong evidence supporting CR as a short-term savings program, our analysis strongly suggests the need for additional study. Several initiatives could be used to test and study a carefully designed bundled payment with performance measures for outpatient CR. Recently announced by the Centers for Medicare and Medicaid Innovation Center, the Bundled Payments for Care Improvement initiative is a national Medicare-based demonstration that gives providers the flexibility to determine which services should be bundled together and what time frame should encompass an episode of care for specific conditions.41 The National Pilot Program on Payment Bundling is another potential testing ground that gives providers less discretion in terms of defining an episode but allows acute care hospitals to bid at discounted Medicare inpatient prospective payment system rates on bundles around 1 of 8 prescribed conditions.42 The testing of these models in Medicare is an essential first step to adoption of new financing programs among private payers. Once Medicare decides to use episode-based payments as a standard for paying for CR, private payers will likely follow suit. Another possible testing vehicle would be the VBP program. Although the final rule implementing pay-for-performance through the VBP program does not include outpatient CR measures, future review and revision of the program should strongly consider including the CR core components and referral measures.43
Finally, in the absence of a mandate, hospital administrators and quality improvement directors could consider internally requiring collection of performance data on the outpatient CR referral measure along with the cardiac core measures to determine CR program comprehensiveness and utilization rates and identify whether disparities exist. The evidence from performance data alone can be an incentive to administrators to improve processes that support evidence-based, high-quality care.44 Demonstrating a lag and/or disparity in CR referrals may motivate hospitals to implement protocols that ensure consistent referrals to CR.
Given the improved health outcomes and cost savings that have resulted both from the Medicare Participating Heart Bypass Center Demonstration and Geisinger’s ProvenCare project, government administrators of these initiatives and interested providers should recognize the advantages associated with bundled payments for cardiac care. Based on the analysis put forth in this article, CR could become a standardized component of bundled payments for CAD and should be tested in pilot programs. In addition, we recommend the testing of benchmarks, such as the CR referral and core component performance measures, to ensure accountability. Finally, it is possible that further study would support the adoption of this type of financial model, which would send a message to physicians that CR is part of the standard of care to be prescribed for all eligible cardiac patients.
What’s New and Important
* Outpatient CR is a cost-effective component of post–acute care management for CVD patients with qualifying clinical diagnoses, but only 10% to 20% of CVD patients eligible for CR actually use it.
* We consider the application of pay-for-performance and bundled payment models to episodes of care in acute CVD care settings with long-term follow-up care, such as CR.
* Notwithstanding concerns about accountability issues and the significant time and effort required for implementation, we argue that the scope of these models should be broadened to include CR as a strategy to promote CR use and increase quality of care.
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