The Centers for Medicare and Medicaid Services (CMS) published a proposed rule in the August 2, 2016 Federal Register that proposes to implement three new Medicare Parts A and B episode payment models under section 1115A of the Social Security Act, which are meant to improve quality and lower cost. The proposed rule includes a new mandatory bundled payment model for cardiac care in 98 geographical markets for patients who have a heart attack or undergo bypass surgery. The rule would also extend the existing bundled payment model for hip and knee replacements – the Comprehensive Care for Joint Replacement model – to include hip and femur surgeries. Also proposed are new incentive payments designed to increase the use of cardiac rehabilitation. Additionally, new pathways are outlined for physicians participating in bundled payment models to qualify for payment incentives under the proposed Quality Payment Program, which implements the Medicare Access and CHIP Reauthorization Act (MACRA). CMS issued a fact sheet to provide more detailed information on the key provisions of this proposed rule. Comments are due by October 3, 2016.