Beginning April 1, approximately 800 hospitals in 67 geographic areas will begin participating in the first mandatory Medicare bundled payment initiative.
The Comprehensive Care for Joint Replacement payment model holds hospitals financially accountable for the cost and quality of care delivered to Medicare fee-for-service beneficiaries for hip and knee replacements from surgery through recovery.
All hospitals in the selected geographic areas that are paid under the Inpatient Prospective Payment System are required to participate and will bear risk for the costs of hip and knee replacement surgery from the time of surgery through 90 days after discharge. Hospitals that are already participating in Models 1, 2, or 4 of the Bundled Payments for Care Improvement initiative are exempt from the program.
The five-year program begins with admissions on or after April 1, 2016. CMS originally proposed starting the program Jan. 1, 2016, but postponed the beginning of the first performance period after feedback from the healthcare stakeholders. It cut the number of geographic areas included in the pilot from 75 to 67.
Hospitals will continue to be paid under Medicare’s fee-for-service system. Beginning at the end of the second year, hospitals may receive an additional payment or have to repay Medicare for a portion of the Medicare spending for hip and knee replacements. The bonus or penalty will be based on the hospital’s success in meeting a target episode price for each DRG and performance on two quality measures in the Hospital Inpatient Quality Reporting Program — Surgical Complications, Total Knee and Total Hip Arthroplasty, and the patient experience measure on the Hospital Consumer Assessment of Healthcare Providers and Services (HCAHPS).
In a news release announcing the final rules for the program, CMS pointed out that the rate of complications such as infections and implant failures after joint replacement surgery is more than three times higher at some facilities than at others with the average Medicare expenditures for surgery, hospitalization, and recovery ranging from $16,500 to $33,000.
“The Comprehensive Care for Joint Replacement (CJR) model addresses low quality and high costs that come from fragmentation by promoting coordinated, patient-centered care. When approaching care without seeing the big picture, there is a risk of missing crucial information or not coordinating across different care settings. This approach leads to more complications after surgery, higher readmission rates, protracted rehabilitative care, and variable costs. These are not the health outcomes patients want,” the release said.
For more information on all of CMS’ bundled payment initiatives and details on one hospital’s joint replacement bundled payment program, see the September 2015 issue of Hospital Case Management.
