In February, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule to revamp the Comprehensive Care for Joint Replacement (CJR) model. This proposal would mandate the inclusion in the model of ambulatory total knee arthroplasty (TKA) and total hip arthroplasty (THA) performed at a hospital outpatient department.
In an interim final rule published Oct. 28, CMS added an additional nine months to the current CJR Performance Year and restated its commitment to extending CJR an additional three years.
While the extension of the model has not been finalized, CMS has recommitted to mandatory bundled payment models. In a recent announcement by Brad Smith, Director of the Centers for Medicare and Medicaid Innovation, he indicated that new mandatory models will be introduced at the conclusion of BPCI Advanced. This recommitment to mandatory bundles illustrates the strategic imperative for hospitals to thrive in compulsory models.
For those hospitals in mandatory Metropolitan Statistical Areas (MSAs), this means strategizing to prepare for the expansion of CJR.
To understand where CJR hospitals are going, it’s important to understand where they have been.
During the first five years of the model, CJR hospitals that worked with Premier’s Bundled Payment Collaborative have experienced significant success:
- More than 75 percent of Premier CJR hospitals earned excellent or good quality scores and thus a 1.5 percent or 2 percent discount rate, respectively, as compared to the standard 3 percent discount rate.
- In Performance Year 3, the most recent national, publicly reported outcome information available, Premier CJR hospitals earned 71 percent more in net payment reconciliation amounts (NPRA) than other hospitals participating in CJR.
- Premier CJR hospitals continue to see success in Performance Year 4, with NPRA increasing by 45 percent compared to the prior performance year.
How have these participants led such successful CJR efforts? They’ve all adopted one or more of the following these tactics:
Pre-Admission Optimization: Many CJR hospitals have discovered that the key to managing patients’ post-acute needs is to address them before the surgery even occurs. To anticipate needs proactively, Premier members have used concepts such as coordinating post-acute care (PAC) prior to admission, identifying potential social barriers to recovery and optimizing chronic conditions prior to clearance for surgery.
Appropriate Post-Acute Care Utilization: A major driver for decreased cost and improved quality in bundled payment models is the reduction in unnecessary PAC utilization. Premier CJR hospitals have been able to successfully identify circumstances in which beneficiaries could be appropriately placed in a lower cost setting without impacting quality. This was accomplished by using tactics like educating patients and surgeons about appropriate PAC settings and providing earlier physical therapy evaluation and intervention during the acute stay.
Preferred Provider Networks: For those beneficiaries requiring a high level of PAC, many CJR hospitals established preferred provider networks. These networks consist of high-quality, low-cost PAC sites that work closely with the CJR hospital to coordinate the transitions of care from hospital to PAC and from PAC to home.
Post-Acute Follow Up: CJR hospitals have also assigned care coordination staff who follow up with patients throughout their PAC stay and when the patient returns home. The follow up ranges from coordinating post-surgery office visits to identifying and addressing gaps in care.
Preparing for the Future of CJR
The proposed three-year extension of CJR involves the second major bifurcation in the model, with the first being the decision to split the model into mandatory and voluntary MSAs. In 2021, mandatory CJR hospitals will continue to participate in the model, whereas voluntary hospitals will exit participation. Due to this change, voluntary and mandatory hospitals will need to take different approaches to build on their successes under the first five years of CJR.
Mandatory MSA Hospitals
With the proposed extension, sustaining the strategies previously discussed will be key. Furthermore, mandatory MSA hospitals will need to excel and expand their capabilities in other areas in order to be successful in the three-year extension period, including:
- Data Analytics: Both electronic health record-based and claims-based data are essential to driving success under bundled payment models. CJR hospitals will need to leverage this data to compare current outpatient TKA to inpatient rates in the region. As outpatient TKA can significantly impact target prices, keeping pace with the region will be important.
Additionally, CJR hospitals will need to use this data to assess and address post-acute challenges with outpatient TKA, such as avoidable readmissions, emergency room visits and observation stays. Tools that assist CJR hospitals with evaluating not just their historical performance, but also how they compare to national and regional benchmarks, are critical.
- Shared Learning: Robust data alone is often not enough to elicit change in a system – there must also be a strategic framework based on national best practices. Premier CJR hospitals have accomplished this through shared learning with their peers in the Bundled Payment Collaborative. Through regular peer-to-peer networking and education, Premier CJR hospitals share lessons learned, best practices and successful strategies among their cohort.
- Multi-Payer Strategies: Many bundled payment participants recognize that success means a significant investment in time and resources. There is also an increasing recognition that successful bundled payment models have a halo effect that improves care for Medicare Advantage payers. CJR hospitals may leverage their investment, existing care infrastructure and expertise in joint replacement innovation to negotiate bundled payment models with Medicare Advantage payers, which run concurrent with the CJR extension.
Voluntary MSA Hospitals
In order to simplify the administration of the model, CMS has stated CJR hospitals in voluntary MSAs will not have the option to continue to participate in CJR. However, there may be alternatives for those that wish to maintain their momentum under CJR.
- Shadow Bundles: CJR hospitals that also participate in an accountable care organization (ACO) could consider implementing a shadow bundle to continue running joint replacement bundles without taking on additional risk. Under a shadow bundle, ACOs may duplicate CJR episode construction based on their aligned beneficiary population.
- Medicare Advantage Bundles: CJR hospitals may also use their experience in CJR to develop favorable bundled payment arrangements with Medicare Advantage payers. CJR hospitals will have years of data with national and regional comparison information and a robust operational infrastructure that they can leverage to negotiate bundled payment models with Medicare Advantage payers.
CMS’s actions this fall indicate that the agency is doubling down on a future that includes episode payment models.
Providers in mandatory or voluntary CJR models should take the time to carefully consider which aspects of their programs are working well and how they can continue to build upon their successes. Mandatory hospitals should build upon their historical strategies, such as post-acute network development, while using claims and electronic health record data to identify future opportunities in Year 6 of the model. Voluntary hospitals will want to concentrate on expanding their CJR activities into new models.
Our experts are helping healthcare providers successfully transition to value-based care models. Premier’s collaborative members have performed up to twice as well as providers in other bundled payment programs.
Learn more about how our Bundled Payment Collaborative is reducing costs, increasing savings and improving outcomes for our members.