Comment Letter on Episode-Based Payment Model Request for Information

Comment Letter

Comment Letter on Episode-Based Payment Model Request for Information

Published date

August 17, 2023

Authors from Duke-Margolis and the Dell Medical School at the University of Texas at Austin submitted a comment letter on a request for information from CMS on an episode-based payment model. The comments reflect the Center's research and broader evidence on specialty-based payment models.

The authors make the following main evidence-based conclusions and recommendations:

  • The proposed short-term episode program for standard and common acute medical events and procedures (encompassing the initial DRG payment + 30-day episode) can address exacerbations during hospitalizations, which are major drivers of complications and costs. Mandatory models can further encourage meaningful and widespread care transformation changes, especially compared to a voluntary model where there is pressure to select those conditions, exacerbations, or procedures where an organization will already succeed under.
  • However, short-term episodes by themselves are an incomplete strategy: reforms must support longitudinal specialty care reforms to prevent avoidable hospitalizations and procedures, achieve greater outcome improvements, and lead to cost savings. Payment reforms need to account for the diversity of specialty practice as well as be complementary or nested within broader whole-person payment models.
  • There are specific steps that CMS can take now to strengthen the data and infrastructure to support the proposed short-term episode payment models and lay a foundation for more substantial specialty payment modes, such as through expanded use and development of better specialty performance measures, better data sharing and feedback (such as through initiatives and common data elements), early incentives for primary care-specialty collaboration nested within whole-person payment reforms (such as through care coordination payments and partial to full per member payments), and implementation of Patient Reported Outcome Measures.
  • Physician-group-led and hospital-led Accountable Care Organizations (ACOs) face different incentives and challenges in implementing longitudinal specialty payment models, which may require differential strategies for implementing specialty-focused payment models. CMS should seek comments on how specialty models may be implemented in a mandatory or voluntary manner for these different types of ACOs.

The authors conclude that these efforts can not only strengthen episode-specific interventions, but specialty care as a whole, ensuring it can support accountable care interventions throughout the patient journey. To progress towards CMS’ 2030 accountable care goals, it is imperative that immediate steps are taken to streamline a transition to a mandatory short-term program and further build out a strategy to promote the advancement of longitudinal specialty care models.

Duke-Margolis Authors

Mark McClellan

Mark McClellan, MD, PhD

Director of the Duke-Margolis Institute for Health Policy
Robert J. Margolis, MD, Professor of Business, Medicine and Policy
Margolis Executive Core Faculty


Mark Japinga, MPAff

Research Associate

Sara Debab Headshot

Sara Debab

Policy Research Assistant

Frank McStay Photo

Frank McStay, MPA

Assistant Research Director

Robert Saunders

Robert Saunders, PhD

Senior Research Director, Health Care Transformation
Adjunct Associate Professor
Executive Team Member
Margolis Core Faculty