CMS has announced the final rule on the Comprehensive Care for Joint Replacement (CJR) program, which will require retrospective bundled payment reporting for hip and knee replacements.
Effective April 1, 2016, surgeons in nearly 70 major markets in the U.S. will be required to report on key determinants of success.
These factors include:
- Patient-Reported Outcomes (PROs)
CMS has implemented a new Medicare part A and B payment under section 1115A of the Social Security Act, called Comprehensive Care for Joint Replacement (CJR). Affected hospitals will receive retrospective bundled payments for episodes of care for lower extremity joint replacements (LEJR) or reattachment of a lower extremity.
Exactly who is affected:
- Acute care hospitals under the Inpatient Prospective Payment System (IPPS) and located in the 67 MSAs linked to previously, except hospitals participating in Model 1 or Models 2 or 4 of the BCPI initiative for LEJR episodes.
- Episodes of care are triggered by inpatient hospitalizations with MS-DR 669 or MS-DRG-470.
Find a full list of MSAs here:
Payment Structure of CJR Final Rule
Financial responsibility will begin in year two of the performance period. CMS has established target prices for each participant hospital based on three years of historical data including a three percent discount to serve as medicare savings. The pricing is based on a blend of hospital specific and regional historical episode data however, this will evolve to 100 percent regional pricing in years four or five.
Performance period target price determination:
- Year One – 1/3 based on region and 2/3 based on hospital history
- Year Two – 2/3 based on region and 1/3 based on hospital history
- Year Four and Five – 100 percent regionalized
Reconciliation payments will be passed on and capped (stop-gain payments). Stop-loss limits will be in effect in the first five years: Five percent in performance year 2, 10 percent in performance year 3 and 20 percent for performance years 4 and 5.
Episode payment is capped at two standard deviations above regional mean.
How it works:
Hospitals are assigned a composite quality score (CQS) based on performance with the following measures:
- Additional points for voluntary THA/TKA patient reported outcomes and limited risk variable data.
Hospitals must meet a minimum CQS for reconciliation payment eligibility if savings are achieved beyond the target price. Based on the CQS, hospitals may be eligible for quality incentive payments for 1 or 1.5 percent of their episode price.
The performance period is estimated to last five years. At the end of each year, actual spending is compared to target price. Depending on the hospitals CQS, the hospital may receive an additional payment from Medicare or will be required to repay Medicare for a portion.
Gainsharing as collaborators
Providers who furnish direct care to CJR beneficiaries can share in reconciliation payments or repayments. Anyone participating in gainsharing agreements should begin conversations now and have collaborator contracts in place. It should be noted that hospitals own the bundles, not physicians. AAOS advocacy is working with CMS to refine the program and increase the physician’s leadership role.
- Hospitals can choose providers and suppliers.
- Patient steering is not permissible and all providers must comply with current privacy laws.
- Beneficiary deductibles and copayments do not change.
- There are no new restrictions on Medicare covered services.
You can find the entire final rule here.
In an AAOS webinar on Understanding the CJR Final Rule, (Tuesday, December 8, 2015), Dr. Brian McCardel recommends the next steps for orthopaedic surgeons:
- Connect with hospital administration to create an alignment strategy.
- Prepare for bundled payments.
- Get collaborator roles identified and put agreements in place.
- Encourage your hospital to participate in data collection.
Ortech has prepared a turnkey tool to help small practices quickly operationalize patient-reported outcomes collection, using the same system health systems, orthopaedic researchers, and statewide and national registries use.
For assistance or questions in collecting data to comply with the CJR final rule, contact Ortech Systems here.