Cardiac Rehabilitation (CR) Incentive Payment Model

On December 20th, 2016, the Centers for Medicare & Medicaid Services (CMS) finalized regulations regarding the Cardiac Rehabilitation (CR) Incentive Payment Model in the Advancing Care Coordination through Episode Payment Models final rule.

This final rule implements a new Medicare Part A and B payment model under section 1115A of the Social Security Act, called the Cardiac Rehabilitation Incentive Payment Model, in which acute care hospitals in certain selected geographic areas participate in retrospective incentive payments for Beneficiary utilization of cardiac rehabilitation/intensive cardiac rehabilitation (CR/ICR) services for the first 90 days following an acute myocardial infarction (AMI) episode of care or a coronary artery bypass graft (CABG) episode of care. Increasing the use of cardiac rehabilitation services has the potential to improve patient outcomes and help keep patients healthy and out of the hospital.

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 CR Incentive Payment Model incentivizes increased coordination of care among hospitals, physicians, and post-acute care providers. A CR 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 specifically selected Medicare Severity-Disease Related Groups (MS-DRGs). 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

Under this model, hospitals may use this incentive payment to coordinate cardiac rehabilitation and support beneficiary adherence to the cardiac rehabilitation treatment plan to improve cardiovascular fitness. This test will cover the same five-year period as the cardiac care bundled payment models. Standard Medicare payments for cardiac rehabilitation services to all providers of these services for model beneficiaries would continue to be made directly to those providers throughout the model.

CMS established a two-part cardiac rehabilitation incentive payment to be paid retrospectively based on the total cardiac rehabilitation use of beneficiaries attributable to participant hospitals:

  1. The initial payment would be $25 per cardiac rehabilitation service for each of the first 11 services paid for by Medicare during the care period for an AMI or CABG care episode.
  2. After 11 services are paid for by Medicare for a beneficiary, the payment would increase to $175 per service paid for by Medicare during the care period for a heart attack or bypass surgery.

Based on Medicare coverage, the number of cardiac rehabilitation program sessions would be limited to a maximum of two one-hour sessions per day for up to 36 sessions over up to 36 weeks, with the option for an additional 36 sessions over an extended period of time if approved by the Medicare Administrative Contractor. Intensive cardiac rehabilitation program sessions would be limited to 72 one-hour sessions, up to six sessions per day, over a period of up to 18 weeks.

The CR Incentive Payment Model will be implemented in 90 geographic areas, 45 of which were also selected for the AMI and CABG Models, defined by metropolitan statistical areas (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. Additionally, 45 geographic areas that were not selected for the AMI and CABG Models will be eligible to participate in this Model test. This test will cover the same five-year period as the EPMs. The 90 MSAs selected are listed below:

Additional Flexibilities

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.

Questions regarding Advancing Care Coordination through Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model can be directed to

Additional Information