Hip and knee replacement is the most common inpatient surgery for Medicare beneficiaries and can require a long recovery and rehabilitation. The Centers for Medicare and Medicaid Services (CMS) estimates that in 2014 there were more than 400,000 procedures, costing more than $7 billion for the hospitalizations alone. With such a large expenditure and estimates that this utilization will continue to grow, CMS began to assess the quality and cost of care for these procedures and recognized that there is great variability across the country in complications, readmissions, infection rates, lengths of stay and many other patient outcomes. This large variability in patient outcomes results in tremendous variation in Medicare payment for this procedure. CMS indicated that the average total Medicare expenditure for surgery, hospitalization and recovery ranges from $16,500 to $33,000 across geographic areas.
It is CMS’ belief that this range can be attributed to the fragmented healthcare that its beneficiaries receive. This fragmented care is the result of the medical/surgical/rehabilitation teams not coordinating their care across different care settings.
By coordinating the care between providers for these hip and knee replacement patients, CMS believes it will achieve multiple goals including:
With this background, on November 15, 2015, the Centers for Medicare and Medicaid Services (CMS) released final regulations implementing the Comprehensive Care for Joint Replacement (CJR) model. This toolkit will provide information on the CJR model. For those practices that are required to participate in this bundled payment model, this toolkit will describe which patient populations are subject to the model, the implications for the anesthesia practice and how to prepare for the implementation. It will also be useful information for those anesthesiologists who are currently not subject to this requirement, providing information about this model of care and reimbursement as a way to prepare for other bundled and alternative payment models.
The CJR Model is a five-year mandatory bundled payment program for hip and knee replacements (DRGs 469/470) which holds hospitals financially accountable for the quality and cost of a comprehensive joint replacement episode of care while creating incentives to increase the coordination of care among hospitals, physicians and post-acute care providers.
The CJR model consists of approximately 5 performance years. The performance period for the model began April 1, 2016 and will end on December 31, 2020.
All Inpatient Prospective Payment (IPPS) hospitals located in the 67 designated metropolitan service areas (MSAs) are required to participate in the model and will be financially accountable for the quality and cost of care during the entire episode of care with limited exceptions such as participation in Model 1, 2 or 4 of the Bundled Payments for Care Improvement (BPCI) initiative for the lower extremity joint replacement episode.
It should be noted that hospitals already participating in other Center for Medicare and Medicaid Innovation models and CMS programs such as the Medicare Shared Savings Program (MSSP) and other accountable care organization models will still be required to participate in this model.
CMS has identified 794 hospitals that will be required to participate in the CJR model. To determine if your hospital is included on this list visit the CMS website.
All Medicare patients with an admission to a participant hospital who are discharged under MS-DRG 469 Major joint replacement or reattachment of lower extremity with major complications or comorbidities or MS-DRG 470 Major joint replacement or reattachment of lower extremity without major complications or comorbidities are subject to the CJR Model.
The episode includes all related items and services paid under Medicare Part A and Part B for all Medicare Fee-for Service beneficiaries from the beginning of the beneficiary’s admission through 90 days following hospital discharge including hospice services.
Hospitals and providers will continue to be paid by Medicare under its existing payment policies. However, following each performance year, CMS will compare actual expenditures to their established target price*. If the participating hospital’s expenditures are lower than CMS’ established target price, the hospital will be eligible for a reconciliation payment. If the participating hospital’s expenditures are higher than CMS’ established target price, the hospital will be required to pay CMS a percentage of the difference.
Example #1
A participating hospital with expenditures below the target price and meeting a minimum quality composite score may earn up to 5 percent of their target price in Performance Years 1 and 2, 10 percent in Performance Year 3 and 20 percent in Performance Years 4 and 5.
Example #2
A participating hospital with actual expenditures above the target price must pay Medicare up to 5 percent of their target price in Performance Year 2, 10 percent in Performance Year 3 and 20 percent in Performance Years 4 and 5.
See table below:
|
|
Performance Year 1 |
Performance Year 2 |
Performance Year 3 |
Performance Year 4 |
Performance Year 5 |
|
Time period |
April 1 - December 31, 2016 |
January 1 - December 31, 2017 |
January 1 - December 31, 2018 |
January 1 - December 31, 2019 |
January 1 - December 31, 2020 |
|
Gain Standard Limit |
5% |
5% |
10% |
20% |
20% |
|
Stop-Loss Standard Limit |
N/A |
5% |
10% |
20% |
20% |
*Each participating hospital will be provide its own specific target price for Medicare patients discharged under MS-DRG 469 and MS DRG 470. These target prices will be risk stratified by the presence of a hip fracture.
CMS will develop a composite quality score for each participating hospital based on 1.) voluntary reporting of designated total hip arthroplasty (THA) /total knee arthroplasty (TKA) patient-reported outcomes and limited risk variable data and 2.) hospital specific performance and improvement in two mandatory quality measures:
This composite score will be used to determine 1.) the hospital’s ability to receive a reconciliation payment if the hospital’s actual expenditures are below its established target price and 2.) the amount of quality incentive payment that may be made to the hospital.
Yes, the participating hospitals will be able to establish financial arrangements or gainshare with specified types of providers and suppliers including:
These collaborators must furnish services directly to the patient and must be involved in the care redesign process. These arrangements should allow participating hospitals to share reconciliation payments, internal cost savings, and the responsibility for payments to CMS, pursuant to the policies stipulated in the Final Rule, with these providers and entities. It should be noted that these gainsharing payments cannot exceed 50% of the respective Medicare fee-for-service payment for an applicable CJR service for an individual collaborator.
Further, participating in the CJR model does not limit the ability for these hospitals to partner with or form accountable care organizations as well.
All financial arrangements must comply with all applicable laws and regulations.
