The recent announcement by CMS of its proposed Comprehensive Care for Joint Replacement (CCJR) program is raising more than a few eyebrows. This mandated orthopedic bundle program is scheduled to begin January 1, 2016 for hospitals in specified geographic areas. CMS expects to save $153M with CCJR as part of moving 50% of Medicare Fee-for-Service (FFS) to value-based care by 2018.
The recent announcement by CMS of its proposed Comprehensive Care for Joint Replacement (CCJR) program is raising more than a few eyebrows. This mandated orthopedic bundle program is scheduled to begin January 1, 2016 for hospitals in specified geographic areas. CMS expects to save $153M with CCJR as part of moving 50% of Medicare Fee-for-Service (FFS) to value-based care by 2018.
While the final rule has yet to be written (public comment is due by September 8, 2015), the outline of the program has been established. Spanning about 450 pages, there’s plenty to decode in the voluminous proposed rule. So here’s a quick “cheat sheet” to get you up to speed.
By the way, if your hospital is targeted for this program, you should begin work the moment you finish reading this as there’s no time to waste.
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A mandated program?
- The program is mandatory for hospitals in 75 markets (called MSAs). See http://innovation.cms.gov/initiatives/ccjr/ for a list of those MSAs.
- There’s no application process.
- CCJR is heavily based on the Bundled Payment for Care Improvement (BPCI) Model 2 program.
- Only hospitals can be episode initiators – other entities such as group practices or skilled nursing facilities are excluded.
- There are no conveners in this model.
- CCJR includes DRGs 469 and 470.
- The program begins Jan 1, 2016 and continues for 5 years.
- You are at risk beginning Jan 1, 2017 (there is only upside during 2016).
- You must meet quality measures to be eligible for gains.
- Gainsharing with other provides is allowed within program guidelines.
- Price targets are partially regional-based (100% regional-based in years 4 and 5) and updated annually.
But what else?
- Medicare takes 2% off the top of the TOTAL program.
- That means you need to drive total spend down by 2% to break even.
- Moreover, since the DRG portion is about 25% of the bundle spend, you need to drive post-acute spend down by 8% just to break even.
- CMS is proposing to grant these waivers:
- “Incident to” rule for home health allows post-discharge home visits where they were previously not allowed.
- Telehealth services are allowed in “all” geographies.
- SNF 3-day in years 2-5 of the program.
- But there are not waivers (yet) for issues such as anti-kickback, CMP, self-referral, etc. CMS is expecting that those will be address later by rulings from the OIG, for example.
Can you tell me more?
- The program only applies to Medicare FFS primary beneficiaries (with other minor exclusions).
- There are program exclusions such as unrelated readmissions and certain Part B services.
- Continue billing FFS with retrospective annual reconciliations to determine gains/losses.
- The initial target priced is based on claims performance from 1-1-12 thru 12-31-14 and remains the target price for the 1st 2 years. In subsequent years, the baseline of the target price is shifted forward by a year.
- The target has a component based on all hospitals in a defined census region while program selection is based on a different geographic definition – the MSA.
- For reference, CMS indicates that for CCJR, 55% of spend is inpatient, 25% is post-acute, and 20% is physician.
- Stop-loss and stop-gain limits protect you against big losses in exchange for limits on gains.
- CMS estimates that a small number of hospitals will be affected by the stop-loss and almost no hospitals will be affected by the stop-gains.
- You must meet specific quality measures to be eligible for gains:
- Those metrics are readmissions, complication rates, and HCAHPS (same as Hospital Compare).
- You will need to score above 30th percentile in years 1-3 and above the 40th percentile in years 4-5.
- Voluntary reporting of patient-reported outcomes (at least 80% of patients) results in lower % withheld. (i.e. more potential upside for you)
- Claims data is available on request (quarterly). Target prices will be provided as well as aggregate regional data and baseline data used to calculate target prices.
- Patients can opt out of sharing claims data.
- There are adjustments/accommodations if you’re in other CMS value-based programs.
What should I be doing NOW?
First, determine if you are in one the 75 MSAs. If you are, you’re in the program and need to begin work now – see the following items.
- Assess your organization’s readiness for this model. There’s a lot more to this than meets the eye.
- Evaluate where your opportunities are using data analytics and other sources (hint: almost everything’s in post-acute).
- Determine the effect of care process reengineering to address quality and spend (they go hand-in-hand).
- Establish necessary policies re: care transitions, evidence-based decision making, etc. that will drive savings in the post-acute timeframe.
Of course, there’s a lot to do and getting started is the key. Keep in mind that performance targets are based on how you compare to other hospitals in your area (unlike BPCI where you’re only compare to your own historical performance). If other hospitals in your region get out ahead of you, you’ll always be playing catch-up and might even find yourself in perpetual no-win (i.e., losing money in this service line) situation.
About the Author:
Sheldon Hamburger serves as a Principal of The Aristone Group, a Raleigh, NC based healthcare consulting group. With over 30 years of experience in developing and marketing healthcare technology products and services, Mr. Hamburger’s career includes various “firsts” in medical and pharmaceutical financial processing systems including electronic claims and payment applications. He earned a bachelor’s degree in Computer Engineering from the University of Michigan.
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