Perspective

CMS proposes rule to reduce number of mandatory participating areas in CJR model

CMS announced a proposed rule to reduce the number of mandatory geographic areas participating in the Center for Medicare and Medicaid Innovation’s Comprehensive Care for Joint Replacement model.

According to a press release, the number of mandatory graphic areas participating in the Comprehensive Care for Joint Replacement (CJR) would be reduced from 67 to 34. The proposal would also allow the remaining areas to participate on a voluntary basis, including all low-volume and rural hospitals.

The rule proposes to cancel the episode payment models and the cardiac rehabilitation incentive payment model, which were scheduled to begin Jan. 1, 2018. By eliminating these models, CMS would have greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute-care spectrum, according to the release. CMS also aims to increase opportunities for providers to participate in voluntary initiatives vs. large mandatory episode payment model efforts.

“Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs and ease burdens on hospitals,” Seema Verma, CMS administrator, said in the release. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”

In a release from the American Academy of Orthopaedic Surgeons (AAOS), William J. Maloney, MD, AAOS president, said, “AAOS applauds Secretary Price, Administrator Seema Verma and others at CMS for clearly hearing concerns of orthopedic surgeons related to these mandatory payment models. As we have said before, AAOS strongly supports the efforts of all stakeholders to develop payment models that incentivize care coordination and address rising health care costs. Additionally, appropriate alternative payment models are a necessary component of the current Quality Payment Program. However, imposing mandatory models on surgeons and facilities that lack the familiarity, experience or infrastructure required has serious unintended consequences. Reducing the geographic area for CJR while still leaving a voluntary option significantly remedies this issue. We thank CMS for their work on this proposed rule and will be commenting officially with a more detailed response.”

 

References:

http://newsroom.aaos.org/media-resources/news/aaos-commends-cms-for-important-changes-to-bundled-payment-models.htm

www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-08-15.html

 

www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-08-15.html

CMS announced a proposed rule to reduce the number of mandatory geographic areas participating in the Center for Medicare and Medicaid Innovation’s Comprehensive Care for Joint Replacement model.

According to a press release, the number of mandatory graphic areas participating in the Comprehensive Care for Joint Replacement (CJR) would be reduced from 67 to 34. The proposal would also allow the remaining areas to participate on a voluntary basis, including all low-volume and rural hospitals.

The rule proposes to cancel the episode payment models and the cardiac rehabilitation incentive payment model, which were scheduled to begin Jan. 1, 2018. By eliminating these models, CMS would have greater flexibility to design and test innovations that will improve quality and care coordination across the inpatient and post-acute-care spectrum, according to the release. CMS also aims to increase opportunities for providers to participate in voluntary initiatives vs. large mandatory episode payment model efforts.

“Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs and ease burdens on hospitals,” Seema Verma, CMS administrator, said in the release. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”

In a release from the American Academy of Orthopaedic Surgeons (AAOS), William J. Maloney, MD, AAOS president, said, “AAOS applauds Secretary Price, Administrator Seema Verma and others at CMS for clearly hearing concerns of orthopedic surgeons related to these mandatory payment models. As we have said before, AAOS strongly supports the efforts of all stakeholders to develop payment models that incentivize care coordination and address rising health care costs. Additionally, appropriate alternative payment models are a necessary component of the current Quality Payment Program. However, imposing mandatory models on surgeons and facilities that lack the familiarity, experience or infrastructure required has serious unintended consequences. Reducing the geographic area for CJR while still leaving a voluntary option significantly remedies this issue. We thank CMS for their work on this proposed rule and will be commenting officially with a more detailed response.”

 

References:

http://newsroom.aaos.org/media-resources/news/aaos-commends-cms-for-important-changes-to-bundled-payment-models.htm

www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-08-15.html

 

www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-08-15.html

    Perspective
    Jack M. Bert

    Jack M. Bert

    The logic for reducing the CJR number downward is potentially to allow for market forces to work more effectively to reduce total costs of total joint arthroplasty (TJA). In certain areas of the country, like Minneapolis/St. Paul and Chicago, outpatient TJAs have been performed in ambulatory surgery centers (ASCs) for more than 5 years and 10 years, respectively. The cost savings to payers is dramatic with bundled payments as low as $21,000. Using appropriate preoperative patient selection criteria and optimizing patient comorbidities prior to TJA, complication and readmission rates have been reduced in some cases to less than 1%. In 2014, more than 400,000 Medicare beneficiaries received a total knee arthroplasty or total hip arthroplasty, costing the government more than $7 billion for hospitalizations alone which is more than $50,000/case.

    If CMS decides to allow for facility reimbursement for outpatient TJA, the hospital bundling initiative (CJR) would be threatened. It is clear that hospitals and surgeons will have to collaborate in order to remain financially viable with these programs. In some areas, hospitals are joint venturing with surgeons in ASCs by either a partial acquisition of an existing center that the provider owns or allowing buy-in of an ASC department that the hospital owns. Other methods of controlling these patients with surgeon input is with a joint venture and/or “gain sharing” model within the existing hospital system. Loss of hospital patient volume will occur in time as these patients shift more to an outpatient ASC setting, many of which have overnight capabilities for a 24-hour length of stay.

    Clearly, the Medicare reimbursement for TJA in an outpatient setting will be lower than for a commercial payer; however, if patient volumes increase due to improved outcomes at a lower cost, there may be a shift by both payers (and referrals from satisfied patients), whereby the center notes increased volume. The difficulty that surgeons have with hospital systems at this time is the incredible bureaucracy that exists in attempting to make any change.

    In a physician-owned ASC, change becomes relatively easy if a procedure can be performed safely, profitably and provide a good outcome. Market forces will continue to change the way TJA is performed throughout the country and utilizing preop patient education and stratification software, case managers, OR efficiency systems and rapid recovery techniques, good outcomes at a relatively lower cost can be maintained and replace mandatory government programs with successful hospital- and surgeon-created bundled payment TJA programs.

    • Jack M. Bert, MD
    • Section Editor, Business of Orthopedics, Orthopedics Today Minnesota Bone and Joint Specialists St. Paul, Minn.

    Disclosures: Bert reports no relevant financial disclosures.