In this episode, Maria Miranda, Director of Reimbursement Services at BESLER Consulting reviews how quality measures are used in the Medicare Comprehensive Care for Joint Replacement (CJR) bundled payment program.
Michael Passanante: Hi, this is Mike Passanante and welcome back to the Hospital Finance Podcast. Today, we’re joined by Maria Miranda who is the Director of our Reimbursement Services Team here at BESLER Consulting. Maria is going to be talking with us about quality measures as they relate to the Comprehensive Care for Joint Replacement Programs. So welcome back, Maria.
Maria Miranda: Thank you, Mike.
Michael: So Maria, quickly for our listeners, could you just give us a recap of what CJR is?
Maria: Sure. So CJR is the new mandatory bundled payment model introduced by CMS that became effective for almost 800 hospitals and about 67 MSAs on April 1st of this year, just a few weeks ago. The Comprehensive Care for Joint Replacement Program or CJR as we call it aims to support better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries, which are hip and knee replacements. They are also referred to as low extremity joint replacements or LEJR.
So hip and knee replacements are the most common inpatient surgery and can require lengthy recovery and rehabilitation periods. In 2014, there are more than 400,000 procedures costing more than $7 billion for the hospitalization alone. It’s no wonder that CMS has chosen these procedures for this new program.
This alternative model will contribute to Medicare’s goal set by the administration of having 30% of all fee for service payments made via alternative payment models by 2016 and 50% by 2018. Quality healthcare is a high priority for the Department of Health and Human Services and the centers for Medicare and Medicaid services. CMS implements quality initiatives to assure quality healthcare for beneficiaries through their quality performance measures.
Michael: Thanks for that Maria. So let’s dive into the quality measures as part of this program. And we’ve broken various pieces of this down through a series of podcasts. So today, can you just explain for us what a quality measure is as it relates to CJR and why it is important?
Maria: Sure. So quality measures aren’t new to hospitals and certainly not to CMS. Over the past several years, Medicare payment policy has moved away from fee for service payments that are not currently linked to quality and they’re moving towards payments that are linked to quality.
So in the final rule for CJR, CMS presented their belief that CJR would test an episode payment model with the goals of improved quality of care and cost-efficiency. Incentivizing high value care through episode-based payments for lower extremity joint replacements is a primary objective of CJR. Therefore, incorporating those quality performance measures into the episode payment is essential. It’s an essential component of CJR. CMS believes that quality measures integrated into the CJR model will allow for an effective assessment of post-operative outcomes.
This quality specific detail will also provide an opportunity for CMS to collect data from the patients’ perspective, data that are necessary to finalize and test specifications of a hospital level risk adjusted Patient Reported Outcome measure. It’s called the PRO for primary elective extremity joint replacement procedures.
Michael: So clearly, quality measures are important as they relate to CJR. So let’s unpack this a little bit. Can you explain to us, which quality measures are being used in the new model and how they’re being use to determine quality?
Maria: Okay. So in the final rule for CJR, CMS adopted two quality measures as well as a voluntary reporting for patient reported outcome, which is a PRO data that will be used in a composite quality score methodology to link the quality total hip and total knee surgeries in participant hospitals to determine the payment.
The first measure is called an RSCR or the Hospital Level Risk-Standardized Complication Rate following elective primary total hip arthroplasty and or total knee arthroplasty. This complications measure is currently implemented in the Hospital Inpatient Quality Reporting Program and the Hospital Value Based purchasing Program. And it assesses the hospitals’ risk standardized complication rate, which is the rate of complications occurring after primary elective total hip or total knee surgery.
This measure outcome is a rate of complications during a 90-day period that begins with the date of the index admission to a specific hospital. An index admission is a hospitalization to which the complications outcome is attributed.
The second measure is what’s known as the HCAPS or the Hospital Consumer Assessment of Healthcare Providers and Systems Survey Measure. The CJR model will use HCAPS Survey Measure, which is a national standardized publicly reported survey of patients’ experience of hospital care. The HCAPS survey measure is a survey instrument and data collection methodology for measuring patients’ perceptions of their hospital experience.
The HCAPS measure asks recently discharged adult patients 32 questions about aspects of their hospital experience that they are uniquely suited to address. The core of the survey contains 21 items that basically asks how often or whether patients experience a critical aspect of hospital care.
Michael: Maria, how are these quality measures used to determine payment to providers?
Maria: CMS has adopted a composite quality measure that will be used to determine eligibility for reconciliation payments and to reward hospitals for quality performance. The quality measures will be used to compute a composite quality score. The composite quality score computed for each participant hospital will summarize the hospital’s level of quality performance and improvement on specified quality measures.
The CJR model assigns different weights to each of these measures. The measure weights for the composite quality score are 50% for the Hospital Level Risk Standardized Complication Rate following elective primary hip or knee surgery, 40% for the HCAPS survey measure and 10% for the Voluntary Patient Reported Outcome Status Admission. So in other words, these quality measures will actually determine whether or not the hospital gets a payment to begin with.
Michael: Maria, how are the composite score quality performance points calculated?
Maria: To calculate quality performance points, CMS will first capture each participant hospital’s measure performance on the total hip or total knee complications measure, which is captured in the Hospital Inpatient Quality Reporting Program.
Next, CMS will capture the hospital’s performance measure on the HCAPS survey based on the four most recent quarters in the HIQR Program. Then the national data for each measure for all hospitals in the Hospital Inpatient Quality Reporting Program with reported quality will be a rate to determine and assign a percentile distribution for the scores for each participant facility’s quality measure components. Then the hospital quality performance score on each measure will be compared to the national percentile distribution.
Finally, the hospital will be assigned quality performance points based on where they fall on the scale of CMS defined performance percentiles. The hospital will receive a quality performance score for each of the measures. Once all of the achievement and improvement points are calculated for each measure including the points awarded for the reporting of the total hip or total knee PROs and limited risk variable data, all of the points will be added up to calculate the participant hospital’s composite quality score.
Michael: Okay. So how is the composite quality score used to determine payment?
Maria: The composite quality score will be incorporated into the pay for performance methodology for the CJR model that assigns participant hospitals to a quality category at the time of reconciliation for performance year. Hospitals that provide high quality episode care will have the opportunity to receive quality incentive payments based on their composite quality score that places each hospital into one of four quality categories. Those categories are below acceptable, acceptable, good and excellent.
Annually, a hospital will get a series of points that convert into a composite quality score. So essentially that means that if you have less than four points, you will be assigned quality score of below acceptable and you won’t be entitled to any gain-sharing.
Furthermore, your target price will be set at a 3% discount from prior years’ charges. That’s a pretty significant impact on reimbursement considering that it represents 3% reduction from the total bundle charges, which includes professional fees, post-acute care, readmissions and hospital charges. On average, that represents about $1000 per case, which is a penalty to the hospital.
Now, hospitals receiving between four to six quality points will be assigned a quality score of acceptable. I’m not sure how acceptable a 2% to 3% discount on target price will be since that equals an average penalty of about $600 to $1000 per case, which is payable back to CMS at the end of the year. Hospital scoring between 6 and 13.2 points are scored as good and will only get a 2% reduction on the target price.
And finally hospitals scoring above 13.2 points are considered excellent. Their discount will be 1.5%. This is still a modest impact, but it’s only half of the highest possible discount of 3%. A hospital in this scenario is in a much better position to be successful under CJR.
Michael: Will this quality measure data be available to participating providers?
Maria: In order to facilitate access to the measures data included in the CJR model, CMS will post data on each participant hospital’s performance on each of the finalized quality measures in a downloadable format in a section of the Hospital Compare website specific to the CJR model. Similar to what is done today for the hospital readmissions reduction program and the hospital acquired conditions reduction program.
CMS will post the absolute score on the measure as well as a percentile score that is used to tie quality measure scores to payment. The CJR specific data will be posted on the same timeframe as the existing hospital inpatient quality reporting program for July public reporting on the Hospital Compare website.
The voluntary total knee and total hip patient reported outcomes and limited risk variable data will not be publicly reported. However, CMS will publicly acknowledge that a hospital has participated in the data submission by placing a symbol by the hospital’s name when posting the total hip and total knee complications measure and the HCAPS survey measure results on the Hospital Compare website.
Michael: Maria, last question. What can providers do to get started on the road to gain-sharing with CJR?
Maria: So voluntary submission of the total hip and total knee patient reported outcomes measure is the easiest thing that hospitals can do to get started on the road to gain-sharing. Submission of PROs offers a two-point bonus on quality scores and it’s the first step towards measuring and improving outcomes.
Careful study of PRO data will provide insights into what’s working and what isn’t and offers a competitive advantage for hospitals. Hospitals would need to report 50% of their patients’ PRO data or at least 50 patients to earn two additional bonus points to the composite quality score.
Right now, this is a voluntary submission, but two points is pretty significant and it’s the easiest thing you can do. And we know that in the end, when CMS collects this data, they always go back and utilize it for other measures. So it’s an easy thing to do and it’s two bonus points. So I think that’s the first place to start.
Michael: Maria, thanks for helping us understand more about CJR quality measures.
Maria: Great. Thank you, Mike.