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The Centers for Medicare & Medicaid Services (CMS) yesterday issued the attached proposed rule that creates a new model in which acute care hospitals in certain selected geographic areas, including three in California, will receive retrospective bundled payments for episodes of care for hip and knee replacements beginning Jan. 1, 2016 through Dec. 31, 2020. The Comprehensive Care for Joint Replacement (CCJR) model would hold participant hospitals financially accountable for the quality and cost of a 90-day episode of care and is intended to incentivize increased coordination of care among hospitals, physicians and post-acute care providers.
Participation in the model would be required by hospitals paid under the inpatient prospective payment system (IPPS) in 75 geographic areas defined by metropolitan statistical areas (MSAs). CMS has proposed participation for three California MSAs, including Los Angeles-Long Beach-Anaheim (Orange County and Los Angeles County), Modesto (Stanislaus County), and San Francisco-Oakland-Hayward (Alameda County, Contra Costa County, San Francisco County, San Mateo County and Marin County).
The model proposes that CCJR episodes begin with an admission discharged under 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 that they end 90 days post-discharge. The episode would include 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.
CMS proposes to set a target price that would generally include a 2 percent discount from expected episode spending. The price would also incorporate a blend of historical hospital-specific spending and regional spending for lower extremity joint replacement (LEJR) episodes, with the regional component of the blend increasing over time. Hospitals that achieve LEJR actual episode spending below the target price and that meet performance thresholds on three required quality measures would be eligible to earn a reconciliation payment from Medicare for the difference between the target price and actual episode spending, up to a specified cap. Hospitals with LEJR episode spending that exceeds the target price would be financially responsible for paying the difference to Medicare up to a specified limit on the repayment amount after year one.
The proposed model would also allow providers to waive certain requirements under existing payment systems, such as a proposed waiver of the requirement for a three-day inpatient hospital stay prior to admission for a covered SNF stay under certain conditions, allowing payment for certain telehealth physician visits and allowing payment for certain types of physician-directed home visits for non-homebound beneficiaries. In addition, the proposed model would allow participant hospitals to enter into financial arrangements with collaborating providers and suppliers who are engaged in care redesign with the hospital and who furnish services to the beneficiary during a CCJR episode.
CHA is very concerned that CMS is proposing to require participation of IPPS hospitals in selected MSAs, rather than proceeding with a voluntary program. CHA is currently reviewing the proposed rule and will provide members with a detailed summary and analysis in the coming weeks. CHA is very interested in hearing member’s perspectives on this proposal. More information about the model is available at the CMS Innovation Centers website. Comments on the proposed rule are due Sept. 8.
