Date

Fact sheet

Comprehensive Care for Joint Replacement Model Three Year Extension and Changes to Episode Definition and Pricing (CMS 5529 P)

On February 20, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule in the Federal Register (https://www.federalregister.gov/public-inspection/current) which proposes a three-year extension and changes to the episode definition and pricing in the Comprehensive Care for Joint Replacement (CJR) Model. The CJR Model was established through notice and comment rule making (see https://innovation.cms.gov/initiatives/CJR for links to the relevant rules) and began on April 1, 2016.  The Model, which is currently scheduled to end on December 31, 2020, aims to reduce expenditures while preserving or enhancing quality of care by supporting better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements (also called lower extremity joint replacements or LEJR).

This proposed rule proposes to change certain aspects of the CJR Model, including incorporating outpatient hip and knee replacements into the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements, gainsharing caps, and the appeals process. Additionally, to allow time to evaluate the proposed changes, the rule proposes to extend the length of the CJR Model for an additional three years, through December 31, 2023, for certain participant hospitals.

Background

The CJR Model is a CMS Center for Medicare and Medicaid Innovation (Innovation Center) model that aims to reduce Medicare expenditures while preserving or enhancing quality of care for Medicare beneficiaries. The Model tests whether bundled payment and quality measurement for an episode of care associated with hip and knee replacements to encourage hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care from the initial hospitalization through recovery. Under the CJR Model these participant hospitals receive retrospective bundled payments for episodes of care for lower extremity joint replacement or reattachment of a lower extremity (collectively referred to as LEJR).  Currently, a CJR episode begins with an inpatient admission for MS-DRG 469 (Major joint replacement or reattachment of lower extremity with major complications or comorbidities) or 470 (Major joint replacement or reattachment of lower extremity without major complications or comorbidities) and includes, with limited exception all care for 90 days following discharge.

Originally established to run for five performance years, the CJR Model was designed to further CMS’ goals of improving the efficiency and quality of care for Medicare beneficiaries and to encourage hospitals, physicians, and post-acute care providers to work together to improve the coordination of care from the initial hospitalization through recovery. Additional information and background materials regarding the CJR Model is available at: https://innovation.cms.gov/initiatives/CJR.

What are the proposed changes?

The proposed rule proposes several changes to the CJR Model. Most notably, it proposes to extend the CJR Model for an additional 3 performance years, performance year 6 (2021) through performance year 8 (2023). The proposed rule also proposes to make changes to the definition of a CJR ‘episode’ to include outpatient knee and hip replacements.  We are proposing this episode definition change in order to address changes to the inpatient-only (IPO) list that now allow for total knee and total hip replacements to be treated in the outpatient setting. Additionally, the rule proposes changes to the CJR target price calculation. Specifically, CMS has proposed to change the basis for the target price from three years of claims data to the most recent one year of claims data, to remove the national update factor and twice yearly update to the target prices that accounts for prospective payment system and fee schedule updates, to remove anchor factors and weights, to incorporate additional risk adjustment to the target pricing and to change the high episode spending cap calculation methodology.

Additionally, CMS has proposed several changes to the CJR reconciliation process. Specifically, the proposed rule has proposed to move from two reconciliation periods (conducted 2 and 14 months after the close of each performance year) to one reconciliation period that would be conducted 6 months after the close of each performance year, to add an additional episode-level risk adjustment beyond fracture status such that target prices will be further adjusted at the episode level based on the individual beneficiary’s age and HCC condition count.  We are also proposing to change the high episode spending cap calculation methodology used at reconciliation, to add a retrospective trend adjustment factor that will better capture changes in Medicare program payment updates and care delivery patterns, and to change the quality (effective or applicable) discount factors applicable at reconciliation to participants with excellent and good quality scores to better recognize high quality care. The proposed rule proposed to make conforming changes to the beneficiary notification, gainsharing caps, appeals process, and waiver sections to align with the proposed model extension as well as the proposed changes modifications to episode definition.

Innovation Center

The CJR Model was designed and is being implemented by the Innovation Center, which was established by section 1115A of the Social Security Act. Congress created the Innovation Center to test innovative payment and service delivery models to reduce CMS program expenditures while preserving or enhancing the quality of care for Medicare, Medicaid, and Children’s Health Insurance Program beneficiaries.

The full text of the February 2020 CJR proposed rule is available here: https://www.federalregister.gov/public-inspection

For more information about the CJR Model, go to: https://innovation.cms.gov/initiatives/CJR

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