CJR model takes effect this week: 13 things for healthcare leaders to know

CMS' first mandatory bundled payment initiative, the Comprehensive Care for Joint Replacement model, starts April 1.

Here are 13 things to know about the CJR model.

1. CMS finalized the bundled payment pilot program last November. Under the payment model, acute care hospitals will be held accountable for the quality of care they deliver to Medicare beneficiaries for hip and knee replacement from surgery through recovery.

2. During the five-year program, hospitals will continue to be paid according to existing Medicare fee-for-service rules. However, the hospital where the surgery takes place will be held accountable for the quality and costs of care from the time of surgery through 90 days after discharge.

3. The payment initiative is mandatory for about 800 hospitals across 67 markets, beginning with discharges occurring April 1, 2016, and ending with episodes completed by Dec. 31, 2020. The CCJR model is designed to incentivize hospitals to work more closely with physicians to reduce variation in how they perform lower extremity joint replacement surgeries.

4. The CJR model uses a retrospective bundled payment, in which the submitted Medicare claims for lower extremity joint replacement surgeries will be aggregated to form the episode payment at the end of each performance year. This amount will be compared to the pre-episode target price and adjusted for pay-for-performance quality metrics. Hospitals are eligible to receive an additional payment or may be required to repay Medicare for a portion of the episode costs depending on the quality of care and hospitals' cost performance.

5. The CJR model is DRG-based. Under the program, the episode of care begins when a Medicare beneficiary is admitted to a participating hospital and is ultimately discharged under MS-DRG 469 or 470, and the episode ends 90 days post-discharge.

6. CMS estimates the program will save $343 million over five years, according to The Advisory Board Company.

7. Hospitals are the only risk-bearing entities under the payment model, which requires them to enhance their ability to manage patient care both inside and outside their walls. Care coordination will become increasingly important, since Medicare spending variation for major joint replacement episodes occurs after the patient is discharged.

8. Post-acute care providers will be critical to a hospital's ability to reach bundled savings. Through the program, post-acute providers will likely aim to develop networks, care pathways and delivery patterns with hospitals.

9. Home health agencies will also play an important role under the CJR model. Because the episode of care lasts 90 days post-discharge, independent hospitals will need to contract with care managers and other providers within the community to help support patients after they are discharged and have passed through rehab and/or skilled nursing facilities, according to a Leavitt Partners report.

10. If hospitals have positive experiences with the CJR model, they will be more likely to encourage private payers to create a similar arrangement. However, if they have unfavorable experiences, insurers may seek to prolong current reimbursement models.

11. Many hospital orthopedic programs across the country (56 percent) reported being unprepared for the CJR model, according to a survey conducted by Function and Outcomes Research for Comparative Effectiveness in Total Joint Replacement and Wellbe.

12. The survey also found 75 percent of orthopedic department respondents are actively planning to hire new staff to better meet the demands of coordinating patients and collecting data across the entire episode of care.

13. Although the final rule covering the CJR model does not include waivers for fraud and abuse laws, CMS and HHS' Office of Inspector General did issue a joint statement waiving the Anti-Kickback Statute, Stark Law and civil monetary penalty laws with respect to certain financial arrangements and beneficiary incentives under the model.

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