Coronary Artery Bypass Graft (CABG) Model

On December 20, 2016, the Centers for Medicare & Medicaid Services (CMS) finalized regulations regarding the Coronary Artery Bypass Graft (CABG) Model in the Advancing Care Coordination through Episode Payment Models final rule.

This final rule implements a new payment model for Part A and B items and services provided to Medicare fee-for-service beneficiaries under section 1115A of the Social Security Act. Acute care hospitals in certain selected geographic areas will participate in retrospective bundled payments for items and services that are related to CABG treatment and recovery, beginning with a hospitalization for CABG treatment and extending for 90 days following hospital discharge.

Proposed Rule: Cancellation of Advancing Care Coordination through Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Payment Model (CJR)

This proposed rule proposes to cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model and to rescind the regulations governing these models. It also proposes to revise certain aspects of the Comprehensive Care for Joint Replacement (CJR) model, including: giving certain hospitals selected for participation in the CJR model a one-time option to choose whether to continue their participation in the model; technical refinements and clarifications for certain payment, reconciliation and quality provisions; and a change to increase the pool of eligible clinicians that qualify as affiliated practitioners under the Advanced Alternative Payment Model (APM) track. Comments on this proposed rule must be received at one of the addresses provided in the proposed rule no later than 11:59 p.m. EST on October 15, 2017. The proposed rule is now available.


The CABG Model holds participant hospitals financially accountable for the quality and cost of a CABG episode of care and incentivizes increased coordination of care among hospitals, physicians, and post-acute care providers. A CABG episode is defined by the admission of an eligible Medicare fee-for-service beneficiary to a hospital paid under the Inpatient Prospective Payment System (IPPS) that eventually results in a discharge paid under the following Medicare Severity-Disease Related Group (MS-DRG):

  • MS-DRG 231 (Coronary bypass with percutaneous transluminal coronary angioplasty (PTCA) with MCC),
  • MS-DRG 232 (Coronary bypass with PTCA without MCC),
  • MS-DRG 233 (Coronary bypass with cardiac catheterization with MCC),
  • MS-DRG 234 (Coronary bypass with cardiac catheterization without MCC),
  • MS-DRG 235 (Coronary bypass without cardiac catheterization with MCC), or
  • MS-DRG 236 (Coronary bypass without cardiac catheterization without MCC).

The first performance period will begin on July 1, 2017 and will continue for five performance years, ending on or about December 31, 2021.

Model Details

The CABG Model will be implemented in 98 geographic areas, defined by MSAs. MSAs are counties associated with a core urban area that has a population of at least 50,000. Non-MSA counties (no urban core area or urban core area of less than 50,000 population) were not eligible for selection. Eligible MSAs must have had at least 75 Acute Myocardial Infarction (AMI) model eligible cases which were not attributed to the Bundled Payments Care Improvement (BPCI) initiative between January 2014 and December 2014, and the percentage of BPCI eligible AMI episodes must have been less than 50 percent because BPCI episodes are excluded from the model. Of the 293 eligible MSAs, 98 were selected via random sampling and are listed below:

CMS estimates approximately 1,120 hospitals will participate in the CABG model.

The episode of care begins with an admission to a participant hospital of a beneficiary who is ultimately discharged under MS-DRG 231, 232, 233, 234, 235, or 236 and ends 90 days post-discharge in order to cover the complete period of recovery for beneficiaries. The episode includes all related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, with the exception of certain exclusions. The following categories of items and services are included in the episodes: physicians' services; inpatient hospital services (including hospital readmissions); inpatient psychiatric facility (IPF) services; long-term care hospital (LTCH) services; inpatient rehabilitation facility (IRF) services; skilled nursing facility (SNF) services; home health agency (HHA) services; hospital outpatient services; outpatient therapy services; clinical laboratory services; durable medical equipment (DME); Part B drugs; hospice; and some per beneficiary per month (PBPM) care management payments under models tested under section 1115A of the Social Security Act. Unrelated services are excluded from the episode. Unrelated services are for acute clinical conditions not arising from existing episode-related chronic clinical conditions or complications of a CABG procedure; and chronic conditions that are generally not affected by a CABG surgery or care during the 90-day post-discharge period.

This model has the potential to improve quality in four ways. First, the model adopts a quality-first principle where hospitals must achieve a minimum level of episode quality before receiving reconciliation payments when episode spending is below the target price. Second, higher episode quality, considering both performance and improvement, may lead a hospital to receive quality incentive payments based on the hospital’s composite quality score, a summary score reflecting hospital performance and improvement on the following two measures:

  • Hospital 30-day, All-cause, Risk-Standardized Mortality Rate (RSMR) Following CoSurgery (NQF #2558); and
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey (NQF #0166)

The composite quality score also takes into consideration a hospital’s submission of the voluntary STS measure data.

Third, in addition to quality performance requirements, the Model incentivizes hospitals to avoid expensive and harmful events, which increase episode spending and reduce the opportunity for reconciliation payments.

Fourth, CMS provides additional tools to improve the effectiveness of care coordination by participant hospitals in selected MSAs. These tools include: 1) providing hospitals with relevant spending and utilization data; 2) waiving certain Medicare requirements to encourage flexibility in the delivery of care; and 3) facilitating the sharing of best practices between participant hospitals through a learning and diffusion program.

Beneficiary Benefits and Protections

Beneficiaries retain their freedom of choice to choose services and providers. Physicians and hospitals are expected to continue to meet current standards required by the Medicare program. All existing safeguards to protect beneficiaries and patients remain in place. If a beneficiary believes that his or her care is adversely affected, he or she should call 1-800- MEDICARE or contact their his or her state’s Quality Improvement Organization by going to The establishment of an Alternative Payment Models Beneficiary Ombudsman will also ensure monitoring of the models and fielding inquiries from beneficiaries if needed. The final rule also describes additional monitoring of claims data from participant hospitals to ensure that hospitals continue to provide all necessary services.

Additional Information