OVERVIEW OF THE COMPREHENSIVE CARE FOR JOINT REPLACEMENT ... · PDF fileOVERVIEW OF THE...

OVERVIEW OF THE COMPREHENSIVE CARE FOR JOINT REPLACEMENT (CJR) MODEL

Final Rule Issued November 16th, 2015Published in Federal Register November 24th, 2015

Effective April 1st, 2016 (delayed from January 1)

CJR OVERVIEW TOPICS

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• Model Overview

• Episode/Service Guidelines

• Beneficiary Eligibility

• Hospital Participation

• Payment Methodology

• Quality Performance

• Data Sharing

• Legal Waivers

• Overlap with Other Innovation Models

CJR MODEL OVERVIEW

• Goal is to test bundled payments for hip and knee replacements as a solution for high quality care with controlled/minimized costs.

• Hospital performing joint replacement is responsible for cost and quality of care through coordination of pre- and post-op services in additional to surgical.

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CJR MODEL OVERVIEW

• Five-year performance period beginning April 1, 2016, will conclude Dec. 31, 2020 (PY 1 is truncated).

• Expected Medicare savings of $343M over 5 years

• Program will put about $1.2 billion in Medicare spending in the new bundles in 2016, growing to $2.9 billion in 2020

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CJR MODEL OVERVIEW

Coding Guidelines:• DRGs 469 and 470• Medicare Part A & B services

Hospital Participation:• Mandatory for hospitals in 67 geographic areas as a broad cross-section• Will include ≈ 800 hospitals constituting 23% of lower extremity joint

replacement (LEJR) discharges nationally• Providers outside of the selected MSAs may choose to participate voluntarily

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EPISODE SERVICE GUIDELINES

Applies to items and services related to MS-DRGs 469 or 470 that are paid under IPPS.

Begins with admission to acute care hospital for a Lower Extremity Joint Replacement (LEJR) procedure.

Ends 90 days after date of discharge from acute care hospital. Includes all related services covered under Medicare Parts A and B within those 90 days, including hospital care, post-acute care, and physician services.

Does also include services such as diagnostic and clinical laboratory tests related to the beneficiary’s hospital admission (i.e. preparation for procedure) within 3 days prior to and including the date of the admission.

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EPISODE SERVICE GUIDELINES

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Included Services Excluded Services

• Physician services• Inpatient hospitalization (includes readmit)• Inpatient Psychiatric Facility• LTCH• Inpatient rehab facility• SNF• Home Health agency• Hospital outpatient services• Independent therapy• Clinical laboratory• Durable Medical Equipment• Part B Drugs (inside the DRG)• Hospice

• Acute clinical conditions not arising from existing episode-related chronic clinical conditions or complications of the LEJR surgery

• Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care

Source: Premier, Inc., Advisor Live, “Reviewing the Comprehensive Care for Joint Replacement Model Proposed Rule”

BENEFICIARY ELIGIBILITY

Beneficiaries qualify for CJR if:• Medicare is primary payer• Enrolled in Part A and B during entire episode• Not eligible for Medicare on basis of ESRD• Not enrolled in a managed care plan• Not covered under United Mine Workers of America

Beneficiary episode will be cancelled if:• Beneficiary dies during hospitalization• Beneficiary initiates episode under BPCI• Acute care readmission discharge is under DRG 469 or 470 (first episode is cancelled and new one is created)

Note: Eligible beneficiaries are unable to opt out of the CJR program. However, they can limit their own participation by changing provider.

8

PROPOSED MSA LOCATIONS

9Source: Pershing Yoakley & Associates, P.C., 2015

67 Metropolitan Statistical Areas (MSAs) were selected for mandatory CJR participation.

For a detailed list of these MSAs and an explanation of the selection process, see Appendix A at end of presentation.

CJR MODEL OVERVIEW

Two-sided risk model: hospitals can earn payment or be required to pay a penalty based on actual costs compared to target costs, as well as meeting thresholds on quality measures.

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$$$ Hospital repays

Medicare

Annual Medicare spending for all LEJR

episodes Below spending

target

Above spending

target

$$$ Reconciliation

payment to hospital

Meets quality performance on all three measures

CJR PAYMENT MODEL

• Retrospective payment methodology• Providers are reimbursed using current FFS structure• At end of performance year, actual claim spending is compared to episode

target price

• Two-sided risk model• Hospitals may receive a reconciliation payment if spending is less than the

target, but may have to pay a penalty payment to Medicare if spending is greater than target

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CJR PAYMENT MODEL

Hospitals will have target prices based on: • MS-DRG 469 or 470: Major Joint Replacement or Reattachment of Lower Extremity

(procedures will be priced separately by CMS w/ higher price given to hip fracture)• Performance year (PY)• Month of episode in relation to PY• Submission of required and voluntary quality measures

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Hospitals will not be held to repayment responsibilities in performance year 1; gradually increasing repayment plan will start year 2.

CJR PAYMENT METHODOLOGY

Each hospital participant will receive prospective target pricing for each performance period for each DRG:

• Based on 3 years of historical data updated every other year• Accounts for geographical location by blending region and hospital-specific data (gradually increases weight of

region data in the later performance years)• Applies a 3% discount as Medicare’s savings ( with opportunity to reduce by voluntary quality data submission)

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PY1 PY2 PY3 PY4 PY5Hospital-specific episode data

66.6% 66.6% 33.3% 0% 0%

Regional-specific episode data

33.3% 33.3% 66.6% 100% 100%

Risk Model No downside risk

Downside risk only for those not achieving 1% of savings

Two-sided risk model Two-sided risk model

Two-sided risk model


CJR PAYMENT METHODOLOGY

• Reconciliation amount is the difference between actual and target expenditures calculated each year

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Reconciliation Payments Hospital Repayments Additional ProtectionPayments

Stop-gain protection-

Payment caps as percentage of target price:PY 1 & 2: 5%PY 3: 10%PY 4 & 5: 20%

Stop-loss protection-

Capped as percentage of target price:PY 1: N/APY 2: 5%PY 3: 10%PY 4 & 5: 20%

Rural, sole community (SCH), Medicare dependent (MDH), and rural referral center (RRC) hospitals:

Year 2- Capped at 3% of target

Years 3 to 5- Capped at 5% of target

HOSPITAL PARTICIPATION & ALTERNATIVE PAYMENT MODELS

• CCJR qualifies as an alternative payment model under MACRA

• It is NOT an expansion of the Bundled Payment for Care Improvement Initiative (BPCI) program and does not reflect comments under IPPS rule.

• Hospitals in BPCI Model 1 or Phase II of Models 2 and 4 remain in BPCI.

• If Phase II participants terminate from BPCI, they are required to participate in CJR if within a designated MSA.

• Hospitals and collaborators participating in CCJR may also participate in an ACO.

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QUALITY PERFORMANCE

Participants must meet quality thresholds to be eligible for payment, and may qualify for incentive payments in the form of reduced discounts on target price.

Data submission is the same as Hospital Inpatient Quality Reporting (IQR).

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$$$ Hospital repays

Medicare

Annual Medicare spending for all LEJR

episodes Below spending

target

Above spending

target

$$$ Reconciliation

payment to hospital

Meets quality performance on all three measures

QUALITY PERFORMANCE

17

Quality Measure Performance Period Weight in Composite Quality Score

NQF #1550: Hospital-level RSCR (complications) following elective primary THA and/or TKA

3 years (rolling) 50%

NQF #0166: HCAHPS Survey Measure 4 consecutive quarters 40%Voluntary THA/TKA data submission on patient-reported outcome measure

12 month intervals 10%

CMS developed a composite quality score methodology to determine:1) Hospital eligibility for reconciliation payments if savings are achieved beyond the target price2) The amount of quality incentive payment that may be made to the hospital

QUALITY PERFORMANCE

Based on their composite quality score, hospitals may be eligible for quality incentive payments of 1% or 1.5% of the episode price, changing the effective discount percentage at reconciliation to 2% or 1.5%. (See Appendix D for adjustment ranges).

Reporting periods:• Year 1: Pre-operative data for a 3-month period• Year 2: Pre-operative and post-operative data for a 3-month period• Years 3 and beyond: Pre-operative and post-operative data for a 12-month period

Submission must occur within 60 days of the end of the most recent 12-month period.

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DATA SHARING

• CMS proposes to share data with participant hospitals upon request throughout the performance period. • Raw claims-level data and claims summary data by service line with participants. • Provide hospitals with up to 3 years of retrospective claims data upon request that will be used to

develop their target price.

• In accordance with HIPAA, the content of this data will be modified to the minimum necessary for quality assessment and improvement.

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FINANCIAL ARRANGEMENTS: GAINSHARING

• Participant hospitals may have financial arrangements with collaborators

• CJR collaborators may include the following provider and supplier types:• Skilled nursing facilities (with 3+ stars)• Home health agencies• Long term care hospitals• Inpatient rehabilitation facilities• Physician group practices• Physicians, non physician practitioners and providers, and suppliers of outpatient therapy

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CJR RISK-SHARING

• Participant hospitals may share reconciliation payments and cost savings with collaborators

• Collaborators are required to engage with the hospital in its care redesign strategies and to furnish services during a CJR episode in order to be eligible for such payments

• Hospitals may assign various percentages of two-sided risk to collaborators:• May assign a portion of the two-sided risk to collaborators, but hospital is required to retain 50%

of downside risk• Hospitals cannot share more than 25% of repayment responsibility with any one collaborator

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LEGAL WAIVERS

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Skilled Nursing Facility Home Visits Telehealth

• Waive SNF 3-day rule beginning inPY2

• SNF must be rated 3- stars or higher to apply waiver

• Premature discharges to SNF notallowed

• Freedom of choice for SNFwithout patient steering

• Waive “incident to” rule for physician services

• Licensed staff to furnish home visit in beneficiary’s home

• Applies to beneficiaries that don’t qualify for home healthcoverage

• Maximum of 9 visits during the episode

• Waive geographic site and originating site requirements

• Cannot substitute for in-person home health services paid under HHPPS

• Must be furnished inaccordance with all other coverage and payment criteria

Note: Waivers do not provide retrospective protection; an arrangement must meet all of the waiver conditions during the period for which waiver protection is sought.

FRAUD & ABUSE WAIVERS

To address physician self-referral law and anti-kickback statute restrictions, the following waivers are available, provided conditions laid out by CMS are met:

• Waiver for Distribution of Gainsharing Payments and Payment of Alignment Payments under Sharing Agreements

• Waiver for Distribution of Payments from a Physician Group Practice to a Practice Collaboration Agent

To address beneficiary inducements Civil Monetary Penalty Law (CMP) and anti-kickback statute restrictions:

• Waiver for Patient Engagement Incentives Provided by Participant Hospitals to Medicare Beneficiaries in Episodes

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Fraud & abuse waivers to be issued jointly from CMS and OIG:

OVERLAP WITH OTHER INNOVATION CENTER MODELS AND CMS PROGRAMS

Models with potential for overlap:

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OVERLAP WITH OTHER INNOVATION CENTER MODELS AND CMS PROGRAMS

1. Beneficiaries in CJR episodes can also be a part of BPCI Model 2 or 3 LEJR episodes, and the clinical services provided as part of each episode may overlap entirely or in part.

2. CJR payments that are made under Part A and B and attributable to a specific beneficiary’s episode may be at risk of not being accounted for by other models when determining cost of care.

3. Some Innovation Center models make PBPM payments to entities for care coordination and other activities and these payments may occur during a CJR episode.

4. Expected Medicare savings for CJR may not be achieved because part of that savings is paid back to hospital under a shared savings program or other model in which the beneficiary is also included.

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NEW HEALTH ANALYTICSWARREN BRENNAN, MANAGING PARTNER

[email protected]

PERFORMANCE INS IGHT

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mailto:[email protected]

APPENDIX A: HOSPITAL PARTICIPATION

MSA MSA NAME10420 Akron, OH10740 Albuquerque, NM11700 Asheville, NC12020 Athens-Clarke County, GA12420 Austin-Round Rock, TX13140 Beaumont-Port Arthur, TX13900 Bismarck, ND14500 Boulder, CO15380 Buffalo-Cheektowaga-Niagara Falls, NY16020 Cape Girardeau, MO-IL16180 Carson City, NV16740 Charlotte-Concord-Gastonia. NC-SC17140 Cincinnati, OH-KY-IN17820 Colorado Springs, CO17860 Columbia, MO18580 Corpus Christi, TX19500 Decatur, IL19740 Denver-Aurora-Lakewood, CO20020 Dothan, AL20500 Durham-Chapel Hill, NC21780 Evansville, IN-KY22420 Flint, MI22500 Florence, SC22660 Fort Collins, CO23540 Gainesville, FL

MSA MSA NAME23580 Gainesville, GA24780 Greenville, NC25420 Harrisburg-Carlisle, PA26300 Hot Springs, AR26900 Indianapolis-Carmel-Anderson, IN28140 Kansas City, MO-KS28660 Killeen-Temple, TX29820 Las Vegas-Henderson-Paradise, NV30700 Lincoln, NE31080 Los Angeles-Long Beach-Anaheim, CA31180 Lubbock, TX31540 Madison, WI32780 Medford, OR32820 Memphis, TN-MS-AR33100 Miami-Fort Lauderdale-West Palm Beach, FL33340 Milwaukee-Waukesha-West Allis, WI33700 Modesto, CA33740 Monroe, LA33860 Montgomery, AL34940 Naples-Immokalee-Marco Island, FL34980 Nashville-Davidson-Murfreesboro-Franklin, TN35300 New Haven-Milford, CT35380 New Orleans-Metairie, LA35620 New York-Newark-Jersey City, NY-NJ-PA35980 Norwich-New London, CT

MSA MSA NAME36260 Ogden-Clearfield, UT36420 Oklahoma City, OK36740 Orlando-Kissimmee-Sanford, FL37860 Pensacola-Ferry Pass-Brent, FL38300 Pittsburgh, PA38940 Port St. Lucie, FL38900 Portland-Vancouver-Hillsboro, OR-WA39340 Provo-Orem, UT39740 Reading, PA40060 Richmond, VA40420 Rockford, IL40980 Saginaw, MI41860 San Francisco-Oakland-Hayward, CA42660 Seattle-Tacoma-Bellevue, WA42680 Sebastian-Vero Beach, FL43780 South Bend-Mishawaka, IN-MI41180 St. Louis, MO-IL44420 Staunton-Waynesboro, VA45300 Tampa-St. Petersburg-Clearwater, FL45780 Toledo, OH45820 Topeka, KS46220 Tuscaloosa, AL46340 Tyler, TX47260 Virginia Beach-Norfolk-Newport News, VA-NC48620 Wichita, KS


To select the 67 geographic areas for participation, Metropolitan Statistical Areas (MSAs) were evaluated using the following process:1) Excluded MSAs that fit the following criteria:

• Fewer than 400 LEJR episodes between July 2013 and June 2014• Fewer than 400 non-BPCI LEJR episodes• More than 50% of eligible episodes not paid under IPPS• Dominated by BPCI Models 1, 2, 3 or 4

2) Placed remaining MSAs into groups based on: • Average wage-adjusted historic LEJR episode payment quartiles• Population size divided at the median

3) Randomly selected MSAs within each group using a selection percentage within each quartile

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Hospitals excluded from CJR Participation:

• Hospitals within MSAs not chosen for CJR

• All hospitals in the state of Maryland due to the All-Payer Model

• Hospitals not paid under IPPS (ex. Critical Access Hospitals)

• Hospitals participating in Model 1 or Phase II of Models 2 or 4 of Bundled Payment for Care Improvement Initiative (BPCI) in lower extremity joint replacement

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Overlap with BPCI Model:• Geographic areas where 50% or more of LEJR episodes are initiated at hospitals testing BPCI

Models 1, 2 or 4, and all hospitals testing these models, were excluded from selection for CJR participation

• There may still be instances of model overlap:• Ex. Beneficiary admitted to CJR hospital for LEJR procedure who is also in a BPCI Model 2 episode under a

physician group

• If there is an overlap of CJR beneficiaries with any BPCI LEJR episodes, CMS proposes that BPCI Model 1,2,3 or 4 take precedence and CJR episode should be canceled or not initiated.

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APPENDIX A: HOSPITAL PARTICIPATION W/ INNOVATION MODEL OVERLAP

APPENDIX A: HOSPITAL PARTICIPATION W/ INNOVATION MODEL OVERLAP

Overlap with other models:

• In addition to calculating reconciliation payments for participant hospitals in CJR, CMS proposes beneficiary-specific reconciliation payment amounts for CJR episodes to allow for those in other programs and models to determine the total cost of care for overlapping beneficiaries

• This information would be available to other programs and models: MSSP, Pioneer ACOs, etc.

• Separate payments for each beneficiary will not be made. Single payment will be made to the participating hospital for all episodes for a single performance year.

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APPENDIX B: CJR PAYMENT CODING

ICD-9 Procedure codes mapping to MS-DRGs 469 & 470:(ICD-10 equivalents to be available)

• 81.54- Total Hip Arthroplasty (THA)• 81.51- Total Knee Arthroplasty (TKA)• 81.52- Partial Hip Replacement (Arthroplasty)• 81.56- Total Ankle Replacement• 00.85- Resurfacing hip, total, acetabulum and femoral head• 00.86- Resurfacing hip, partial, femoral head• 00.87- Resurfacing hip, partial, acetabulum• 84.27- Lower leg or ankle reattachment• 84.28- Thigh reattachment

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Together account for over 85% of MS-DRG 469/470 procedures

APPENDIX C: EXCLUDED SERVICES

• Services excluded from CJR payment:• Unrelated inpatient hospital admissions during the episode by identifying MS-

DRGs for exclusion.

• Unrelated Part B services based on the ICD-9-CM diagnosis code (or ICD-10 equivalents) that is the principal diagnosis code reported on claims for services furnished during the episode

• Specific inpatient hospital admissions and services consistent with the LEJR episode definition that is currently used in BPCI Model 2.

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APPENDIX C: EXCLUDED SERVICES

Click image below for full list of ICD-9 codes for excluded Part B Services.

Click image below for full list of MS-DRGs for excluded readmissions.

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Below are the lists of MS-DRGs for excluded readmissions in CCJR after January 1, 2016. MS-DRG List Description

001 Heart Transplant Or Implant Of Heart Assist System W Mcc002 Heart Transplant Or Implant Of Heart Assist System W/O Mcc005 Liver Transplant W Mcc Or Intestinal Transplant006 Liver Transplant W/O Mcc007 Lung Transplant008 Simultaneous Pancreas/Kidney Transplant009 Old Code010 Pancreas Transplant

Below are the lists of primary ICD9 code ranges for excluded Part B services in CCJR as of January 1, 2016. In all cases the decimal point would follow the first three char ICD-9 Code Description

001 Cholera002 Typhoid Fever003 Salmonella Infections004 Shigellosis005 Other Bacterial Food Poisoning006 Amebiasis007 Other Protozoal Intestinal Diseases008 Intestinal Infections d/t other Organisms

APPENDIX D: CJR PAYMENT METHODOLOGY

Steps to calculate target prices for CJR episodes:1. Blend each participant hospital-specific historical average payment with the

corresponding regional payment.

2. Calculate participant hospital-specific & region-specific update factor.

3. Reintroduce wage variations by multiplying the average episode payment by the corresponding hospital-specific wage normalization factor, using the hospital’s IPPS wage index for the target time period.

4. Multiply the target prices for MS-DRG 470 by the anchor factor to calculate target prices for MS-DRG 469.

5. Multiply the appropriate discount factor.

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APPENDIX D: CJR PAYMENT METHODOLOGY

Important Notes:

• Use of historical data will consist of 3 years of Medicare payment data grouped into episodes of care based on proposed CJR services. Performance years 1 & 2 of CJR will use 2012-2014 data, years 3 & 4 will use 2014-2016 data, and year 5 will use 2016-2018 data. Similar to BPCI Model 2, a national trend factor will be also be applied.

• “Regions” refers to one of the nine US Census Divisions.

• Because Medicare payment system updates become effective at two different times of the year, CMS will calculate separate target prices for episodes initiated between January 1 & September 30 vs. October 1 & December 31.

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STEP 1: BLEND EACH PARTICIPANT HOSPITAL-SPECIFIC HISTORICAL AVERAGE PAYMENT WITH THE CORRESPONDING REGIONAL PAYMENT.

To set a participant hospital’s base target price:

Performance Years 1 & 2 (CY 2016 & 2017): Use 2/3 of hospital-specific episode payments and one-third of the regional episode payment to set a participant hospital’s target price.

Performance Year 3 (CY 2018): Adjust the proportions to use one-third hospital-specific payments and two-thirds region-specific payments.

Performance Years 4 & 5 (CY 2019 & 2020): Use only regional historical CJR episode payments for performance years 4 and 5.

Exceptions will be made for hospitals with low CJR case volume (fewer than 20 total across the 3 historical years) or for hospitals that are newly CMS-certified.

STEP 2: CALCULATE PARTICIPANT HOSPITAL-SPECIFIC & REGION-SPECIFIC UPDATE FACTOR.

A set of hospital-specific factors is calculated based on Medicare payment system updates, applying separate factors for each of the following six components of CJR payments.

1. Inpatient acute2. Physician services3. IRF (inpatient rehab)4. SNF (skilled nursing)5. HHA (home health)6. Other services

In the following formulas & explanations:PP = Upcoming performance periodTP = End of the latest historical year used in the target price calculations

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1. IPPS services update, as defined in the IPPS Final Rules:IPPS update factor = Base RatePP* average MS-DRG weightPP

Base RateTP* average MS-DRG weightTP

2. Physician services update, as defined in the PFS Final Rules:Physician services update factor = RVU- weighted GPCIPP* Conversion factorPP

RVU- weighted GPCITP* Conversion factorTP

3. IRF (rehab) services update, as defined in the IRF PPS Final Rules:IRF update factor = IRF Standard Payment Conversion factorPP

IRF Standard Payment Conversion factorTP

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4. SNF services update, as defined in the SNF PPS Final Rules:SNF update factor = Average RUG IV Case Mix Adjusted Federal RatePP

Average RUG IV Case Mix Adjusted Federal RateTP

5. HHA (home health) services update, as defined in the HHA PPS Final Rules:HHA update factor = 60 Day Episode RatePP* average HHRG weightPP

60 Day Episode RateTP* average HHRG weightTP

6. Other services update:Applies to services in the episode but not paid under the above categories. Includes payments for home

health LUPA claims (excluded from HHA) and CJR related readmissions at CAHs.

Use the Medicare Economic Index (MEI) measure. Calculate this update factor as the percent change in the MEI from the latest year used in the target price calculations and its projected value for the upcoming performance period.

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After the set of hospital-specific update factors is calculated, they will be weighted by the percent of the Medicare payment for which each of the six components accounts in the hospital’s historical episodes.

Example- Inpatient acute care: 50% of services. Physician: 15% of services. SNF: 35% of services. Other: 0% of services. Update factors are 1.02, 1.03, 1.01, respectively, for the three categories above.

Weighted update factor calculation: (0.5*1.02) + (0.15*1.03) + (0.35*1.01) = 1.018

This hospital would have its historical average episode payments multiplied by 1.018 to reflect payment system updates.

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STEP 3: REINTRODUCE WAGE VARIATIONS USING THE HOSPITAL’S IPPS WAGE INDEX FOR THE TARGET TIME PERIOD.

Reintroduce hospital-specific wage variations by multiplying episode payments by the wage normalization factor:

Episode payment * (0.7* IPPS wage index + 0.3)

Use the IPPS wage index applicable to the anchor hospitalization (the IPPS wage index used in the calculation of the IPPS payment for the anchor hospitalization).

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STEP 4: MULTIPLY THE TARGET PRICES FOR MS-DRG 470 BY THE ANCHOR FACTOR TO CALCULATE TARGET PRICES FOR MS-DRG 469

To increase volume and accuracy, CMS will pool together episodes anchored by MS-DRGs 469 & 470 for target price calculations.

The anchor factor is equal to the ratio of national average historical MS-DRG 469 anchored episode payments to national average historical MS-DRG 470 anchored payments.

For each participant, a hospital weight will be calculated using the following:Count of MS-DRG 469 and MS-DRG 470 anchored episodesMS-DRG 469 anchored episode count * anchor factor + MS-DRG 470 anchored episode count

Hospital-specific pooled historical average episode payment is then calculated by multiplying the hospital’s weight by its combined historical average payments for MS-DRGs 469 & 470.

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STEP 4: MULTIPLY THE TARGET PRICES FOR MS-DRG 470 BY THE ANCHOR FACTOR TO CALCULATE TARGET PRICES FOR MS-DRG 469

After the hospital-specific target prices are calculated, they will be “unpooled” to account for clinical variation between MS-DRG 469 and MS-DRG 470.

This will be done by setting the MS-DRG 470 episode target price equal to the resulting calculation on the prior slide and multiplying it by the hospital weight to produce the MS-DRG 469 target price.

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STEP 5: MULTIPLY THE APPROPRIATE DISCOUNT FACTOR.

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CMS proposes to apply a 2% discount for performance years 1-5 when setting the target prices. This will allow Medicare to partake in some of the savings from the CJR model while leaving opportunity for participant hospitals to achieve further episode savings, assuming they meet quality requirements.

Will apply a reduced discount of 1% during performance year 2 for purposes of determining the hospital’s responsibility for excess episode spending, but will maintain the 2% discount for determining the hospital’s opportunity to receive reconciliation payment.

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To be eligible for reconciliation payments, participants must report the following measures:

1) Hospital-level 30-day, all-cause RSRR following elective primary THA and/or TKA (20% weight in composite score)

2) Hospital-level RSCR following elective primary THA and/or TKA (40% weight in composite score)

3) HCAHPS survey measure (30% weight in composite score)

The other 10% of the composite quality score is based on completion of voluntary submission of THA/TKA patient-reported outcome measures.

APPENDIX D: CJR PAYMENT TIED TO QUALITY

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Individual scoring for quality measures:


Source: Department of Health and Human Services, CMS Federal Register, July 14, 2015

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Relationship of Composite Quality scores to Reconciliation Payments

Performance Year 1:



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Performance Year 2:



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Performance Years 3-5:



APPENDIX E: CJR PAYMENT ADJUSTMENTS

Adjustments to Payments Included in the Episode:• Special payment provisions under existing Medicare payment systems• Payment for services that straddle the end of the episode• High payment episodes • Other adjustments to account for overlaps with other Innovation Center models and CMS

programs• Not proposing to adjust hospital-specific or regional components of target prices for any Medicare

repayment or reconciliation payments under CJR model

• CMS proposes that the hospital performance and reconciliation payment or Medicare repayment related to CJR be independent of, and not affect, other special payment provisions. Other provisions should be excluded when calculating episode payments, target prices, and determining reconciliation.

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• Payment adjustment for high payment episodes:

• Payment ceiling is set at two standard deviations above the mean• Identify for each anchor MS-DRG in each region the episode payment amount that is two standard

deviations above the mean payment used in the historical data set.• Any such identified episode would have its payment capped at that value.

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• Payment adjustment for services that straddle the end of the episode:• For CAH, SNF, IRF, LTCH, IPF, HHA: payments are prorated based on the percentage of actual length of stay in days that falls

within the episode window• For IPPS hospital services (and readmissions included in the episode definition): separately prorate the IPPS claim amount

from episode target price and actual episode payment

Normal MS-DRG payment amount would be prorated based on the geometric mean length of stay, comparable to the IPPS Final Rules. First day for a subset of MS-DRGs would be double weighted to count as two days to account for likely higher costs incurred at beginning of admission.

If actual LOS is = or > than normal MS-DRG geometric mean, payment is fully allocated to episode. If less, payment allocated is based on the number of days that fall within the episode. In the case that the full amount is not allocated to the episode, the remained is allocated to the 30 day post-episode payment calculation.

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• EXAMPLE---Payment adjustment for services that straddle the end of the episode:

Ex. MS-DRG 493, readmission on 89th day. Discharged after 5 days.

Geometric mean for this DRG (IPPS Final Rule Table 5) is 4 days, and is indicated for double-weighting the first day for proration. 2 days fall within the CCJR episode, which is less than the geometric mean of 4.

Normal MS-DRG amount association with this readmission would be divided by 4 and multiplied by 3 (since first day counts as 2) and resulting amount is attributed to episode. Remainder fourth would be captured in post-episode spending calculation.

IF the readmission had occurred on the 85th day and LOS was 7 days, the normal MS-DRG payment would be included and not prorated in the episode payment because the LOS for the readmission that fell within the episode (6 days) is greater than or equal to the geometric mean for MS-DRG 493 of 4 days.

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