CMS aims to reduce costs of total joint replacement episodes of care through CJR

Aligning hospitals, surgeons and medical device companies may help reduce surgical costs

Issue: December 2016

Implemented on April 1, the Comprehensive Care for Joint Replacement model was established by CMS as a way to reduce costs of episodes of care, while preserving or enhancing the quality of care, related to lower extremity joint replacement.

“The [Comprehensive Care for Joint Replacement] CJR model aims to support better and more efficient care for beneficiaries undergoing [lower extremity joint replacement] LEJR procedures. The most common inpatient surgeries for Medicare beneficiaries,” a CMS spokesperson told Orthopedics Today. “This model tests bundled payment and quality measurement for an episode of care associated with hip and knee replacements to encourage hospitals, physicians and post-acute care providers to work together to improve the quality and coordination of care from the initial hospitalization through recovery.”

CJR model

According to CMS, the CJR model will be tested for five performance periods from April 2016 to December 2020 among approximately 800 hospitals in 67 geographic areas. A report by the American Health Care Association noted participating hospitals will be responsible for payments incurred during the hospital stay as well as during the 90-day post hospital discharge for LEJRs, which includes hip and knee replacements, in Medicare fee-for-service beneficiaries.

Christine Maroulis, lead of health policy and reimbursement for the Johnson & Johnson Medical Device Sector, told Orthopedics Today that CMS has established prices for procedures both with and without major complications or comorbidities for hospitals and medical device companies to manage. At the end of the year, Maroulis noted hospitals that remain under the target costs of care for patients, which CMS noted includes payment adjustments based on quality performance, post-episode spending and policies to limit hospital financial responsibilities, will receive a reconciliation payment. However, if the total payment is over the established price amount, the hospital will be required to pay back the difference beginning in the second performance year, according to the American Health Care Association report.

“Reconciliation payments rewarding higher quality and greater efficiency incentivize providers to redesign care and offer services to beneficiaries that would lead to a better and faster recovery,” a CMS spokesperson said. “Similar to other Innovation Center models, hospitals receive other tools to help improve care coordination, such as potential waivers of payment policies (3-day [skilled nursing facility] SNF stay, telehealth originating site, “incident to” home visits), relevant claims data to study trends in utilization and participation in a robust learning system, where hospitals can share best practices and effective strategies for improving quality and lowering costs.”

Importance of CJR

Among Medicare beneficiaries, hip and knee replacements are some of the most common inpatient surgery, according to CMS, which require lengthy recovery and rehabilitation periods.

“In 2013, there were over 400,000 inpatient primary procedures costing more than $7 billion for hospitalization alone,” a CMS spokesperson said. “While some incentives exist for hospitals to avoid post-surgery complications that can result in pain, readmissions to the hospital or protracted rehabilitative care [and] the quality and cost of care for these hip and knee replacement surgeries still varies greatly.”

Through the CJR model, CMS is asking hospitals, surgeons, post-acute providers and everyone involved in the care of a patient to work together to help decrease the cost of services while also improving patient care, Maroulis noted.

“The CJR model is meant to address fragmentation of care and its consequences by focusing on coordinated, patient-centered care,” a CMS spokesperson said. “This model aims to improve the care experience for the many and growing numbers of Medicare beneficiaries who receive joint replacements and places the patient’s successful surgery and recovery as the top priority of the health care system.” – by Casey Tingle

References:
Comprehensive Care for Joint Replacement final rule summary. Available at: https://www.ahcancal.org/facility_operations/medicare/Documents/AHCA%20Summary%20of%20CJR%20Final%20Rule.pdf. Accessed Sept. 14, 2016.
Comprehensive Care for Joint Replacement model. Available at: https://innovation.cms.gov/initiatives/CJR. Accessed Sept. 14, 2016.

For more information:
Christine Maroulis can be reached at DePuy Synthes Companies, 325 Paramount Dr., Raynham, MA 02767; email: cmarouli@its.jnj.com.

Disclosure: Maroulis reports she is an employee of Johnson & Johnson.