On February 20, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to extend the Comprehensive Care for Joint Replacement (CJR) model by three years to December 2023. CJR is a bundled payment program that started in April 2016 and is currently scheduled to end in December 2020. The program is aimed at encouraging collaboration among healthcare providers to lower the overall cost and improve the quality of the services across the 90-day episode for hip and knee replacements.
In a sign that CMS recognizes that the program has successfully lowered the cost curve while maintaining high quality, the proposal includes the following highlights:
- Adds performance year six (2021) through performance year eight (2023)
- Includes outpatient knee and hip replacemen
- Changes the CJR target price calculation
- Uses previous year instead of previous three years
- Removes national update and twice-yearly fee schedule update
- Removes anchor factors and weights
- Incorporates additional risk adjustment
- Changes high spend cap calculation
- Adds an episode-level risk adjustment beyond fracture status; target prices will be further adjusted at the episode level based on the beneficiary’s age and Hierarchical Condition Category
- Changes the quality discount factors applicable at reconciliation to participants with excellent and good quality scores “to better recognize high-quality care”
- Eliminates the 50% cap on gainsharing payments
For those hospitals and health systems affected by this proposal, below are three key strategies to incorporate into your joint replacement program.
1. Develop an outpatient joint replacement program
For years, the threat of losing profitable inpatient joint replacement cases to the outpatient setting has been looming. With the recent decision to remove total knee and hip replacement from the inpatient-only list and allow Medicare total joint patients to be treated in an ASC setting, this has finally become a reality. Thus far, CJR has excluded outpatient total joints, despite the elimination of the two-midnight requirement. Hospitals have struggled with the process for determining whether a patient is appropriate for a second midnight and have developed a mixed bag of processes for identifying who is and is not appropriate to admit versus treat as an outpatient. With the proposed change to include outpatient hip and knee replacements in the CJR program, CMS is providing clarity to hospitals by eliminating the challenge of having to determine whether a patient is included. Organizations without an effective outpatient joint replacement program will struggle in the more contemporary payment models and, in the long term, may run the risk of becoming irrelevant in orthopedics.
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