In this episode, Derrick Chavis, Manager of Reimbursement Services at BESLER Consulting reviews the general model implementation of the Medicare Comprehensive Care for Joint Replacement (CJR) bundled payment program.
Michael Passanante: Hi, this is Mike Passanante. Welcome back to the Hospital Finance Podcast. We’re so glad you’re here with us today.
On today’s show, we are going to be talking about the general implementation model for CJR. And to help us go through that, we’re joined by Derrick Chavis, who is a manager in our Reimbursement Services Team here at Besler Consulting.
Derrick Chavis: Hi. Thanks for having me here today to talk about this very important topic.
Michael: Well, we know you’re extremely knowledgeable about this, and I think you’re going to bring a lot to the audience here in terms of their understanding of what CJR is, particularly as we work through this entire CJR series which we’re going to be having.
Why don’t we just jump right in? Can you explain to us what CJR is, and where we can find the final rule to help us understand what’s actually in it?
Derrick: Sure, that’s no problem. On November 16th, CMS issued the final rule for the Comprehensive Care for Joint Replacement payment model, or as we’ve been referring to it here, the CJR model. Under CJR, certain hospitals will be held accountable for the quality and total cost of care provided to Medicare beneficiaries.
We’re talking about care specific to lower extremity joint replacement procedures. These procedures are among the most expensive in patient surgeries for Medicare beneficiaries. So they have drawn quite a bit of attention recently.
The CJR hospitals will, in addition, be held accountable to CMS to find target prices associated with costs occurring during the episodes of care, costs occurring up to 90 days post hospital discharge, including any SNF costs, will also be considered part of total cost.
The CJR payment model will be codified at 42CFR Part 510.
Michael: So HHS, their delivery system and the reform goals associated with those include better care, smarter spending and healthier people. So how does CJR support those goals?
Derrick: The CJR model is an alternative payment model that will contribute to the Medicare goal of having 30% of all Medicare Fee for Service Payments made via alternative payment models by 2016, and 50% by 2018. Effective implementation of the CJR model will improve the quality and efficiency of care for all Medicare beneficiaries experiencing these procedures.
This is essential to creating a healthcare system that delivers better care, spends our dollars more wisely, and leads to healthier Americans.
Michael: Derrick, who will be affected by the CJR model?
Derrick: Well, nearly all hospitals within a selected geographic area will be required to participate in the model. And they will have the opportunity to partner up with surgeons, other physicians and post-acute care providers to coordinate patient care more effectively.
Additionally, Medicare beneficiaries with an in-patient hospitalization for an LEJR procedure is designated by MSDRG 469 or 70, will be included in this model. These MSDRG’s primarily include single joint, hip and knee replacement procedures.
Michael: And where will the CJR model be implemented?
Derrick: Well, the model is going to be implemented in 67 metropolitan statistical areas, covering a total of 791 providers.
Michael: Derrick, how are these Medicare hospitals chosen to participate in the model?
Derrick: Those hospitals are currently being paid under the Inpatient Prospective Payment System or IPPS, which are physically located in one of the selected MSA’s, and not currently participating in the BCPI initiatives for lower extremity joint replacement procedures are required to participate in the model.
A list of these facilities can be found on the CMS website.
Michael: And so why are these hospitals required to participate in the CJR model?
Derrick: CMS is implementing this model at a regional level. CMS believes that it’s important to test this alternative payment model among a wide range of facilities including those that wouldn’t normally apply to participate. CMS also believes that by requiring the participation of a large number of hospitals with diverse characteristics, the model will result in a more robust data set for evaluation of this bundled payment approach, and will stimulate a rapid development of new evidence-based knowledge.
Testing the model in this manner allows CMS to learn more about the patterns of inefficient utilization of services, and how to incentivize the improvement of quality for common LEJR procedure episodes.
This learning could inform future Medicare payment policy.
Michael: Why is CMS implementing the CJR model?
Derrick: CMS believes there is an opportunity to improve care for Medicare beneficiaries who undergo one of these joint replacement procedures. These LEJR procedures are expensive and tend to require quite extensive recovery time.
In addition, there is substantial regional variation in care patterns and episode spending. For example, the average Medicare expenditure for surgery, hospitalization and recovery ranges from about $17,000 to $33,000 against across various geographic regions.
CMS is testing this model primarily to better align incentives for hospitals, physicians and post-acute care providers to improve quality and coordination of care from the initial hospitalization all the way through discharge and recovery.
The goal of this model is to improve care coordination and care transitions between medical settings with the expectation of improved outcomes for Medicare beneficiaries.
Michael: Derrick, when will the CJR model start, and for how long will it last?
Derrick: The first performance period for the CJR model will begin on April 1, 2016, and the model consists of five performance periods. The performance period start date was designed to provide hospitals with adequate time to prepare for participation by identifying care design opportunities, beginning to form financial and clinical partnerships with other providers, and using data to assess financial opportunities under the model.
Michael: How will the CJR model improve the quality of care for patients?
Derrick: Well, the model has the potential to improve quality in four different ways. First, the model adopts a quality first principle, where hospitals must achieve a minimum level of episode quality before receiving reconciliation payments in those cases where episode spending is below the target.
Second, higher episode quality considering both performance and improvement may lead a hospital to receive quality incentive payments based on the hospital’s composite quality score, which is a summary score reflecting the hospital’s performance and their improvement.
Third, in addition to quality performance requirements, the model also incentivizes hospitals to avoid expensive and potentially harmful events, which increase episode spending and reduce the opportunity for reconciliation payments.
And fourth, CMS provides additional tools to improve the effectiveness of care coordination. These tools include providing hospitals with relevant spending and utilization data, waiving certain Medicare requirements to encourage flexibility in the delivery of care, and finally, facilitating the sharing of best practices between participating hospitals through a learning and diffusion program.
More information on quality and the pay for performance methodology could be found on the CMS website.
Michael: Derrick, thanks for that great overview of CJR and for spending some time with us today.
Derrick: It was my pleasure. Thank you.