Medicare has implemented the Comprehensive Care for Joint Replacement (CJR) Model as of April 1st, 2016!  Yep, as if the DRG system and calculation of the payments was not confusing enough, now MS-DRGs 469 and 470 just got more interesting. In an attempt to increase the quality, efficacy and cost of care, Medicare is bundling payments for an episode of care to incentivize hospitals, physicians, rehabilitation facilities, manufactures and other providers to work together. Patrick Conway, M.D., CMS’ principal deputy administrator and chief medical officer believes that “Patients want high quality, coordinated care — not just for a day, but for an entire episode of care. Hospitals, physicians, and other providers who work together can be successful and improve care for patients in this model, and CMS will help providers succeed”.

CMS believes this model supports HHS efforts to transform the health care system towards one focused on better quality care, smarter spending, and healthier people through care transformation and payment reform. Under the CJR retrospective bundled payment model, the episode of care is redefined and will include not just the hospital encounter but all care up to 90 days post discharge. While hospitals will continue to receive “episode payments” for individual encounters throughout the year, at the end of the year, facilities will receive an additional payment (reconciliation payment) or a penalty (no further funds or repayment of funds) for not meeting pricing and quality expectations.

CMS has set the performance period for 5 years and has defined that there will be no repayment responsibility in performance year 1 of the model. In addition, a reduced discount percentage for repayment responsibility in performance years 2 and 3, so that the financial responsibility for spending during CJR episodes throughout the model performance years will be phased in. CMS has also written parallel stop-loss and stop-gain limits that provide additional financial protections for hospitals, in to the final rule.

Quick Facts

  • The CJR is being implemented in 67 metropolitan statistical areas.
  • The CJR is the first of what is the beginning of the alternative payment models that Medicare is committing to implementing by 2018.
  • Medicare goals set by the Administration are targeting to have 30 percent of all Medicare fee-for-service payments made via alternative payment models by 2016 and 50 percent by 2018.
  • The episode includes all related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, with the exception of certain exclusions.
  • The following categories of items and services are included in the episodes: physicians’ services; inpatient hospital services (including hospital readmissions); inpatient psychiatric facility (IPF) services; long -term care hospital (LTCH) services; inpatient rehabilitation facility (IRF) services; skilled nursing facility (SNF) services; home health agency (HHA) services; hospital outpatient services; outpatient therapy services; clinical laboratory services; durable medical equipment (DME); Part B drugs; hospice; and some per beneficiary per month (PBPM) care management payments under models tested under section 1115A of the Social Security Act.
  • Unrelated services are excluded from the episode.
  • While CMS is not providing waivers of any fraud waste and abuse, they are waiving other rules which have been under review by fraud authorities such as the 3 days acute care requirement for admission to SNFs.

For more information, check out the following links!

Comprehensive Care for Joint Replacement – CMS Innovation Center

Federal Register

Consumer Fact Sheet

Provider and Technical Fact Sheet

FAQ’s

The full list of hospitals that will be impacted by the CJR can be viewed on the CMS website under additional information “Hospital List (XLS)”.