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The recent announcement by CMS of its Comprehensive Care for Joint Replacement (CJR no longer “CCJR”) program is raising more than a few eyebrows.  This mandated orthopedic bundle program will begin April 1, 2016 for hospitals in specified geographic areas.  CMS expects to save $153M with CJR as part of moving 50% of Medicare Fee-for-Service (FFS) to value-based care by 2018.

While the final rule spans hundreds of pages (check for yourself here: http://innovation.cms.gov/initiatives/CJR/), there’s no need for you to spend endless days trying to decipher the program language.  Here’s a quick “cheat sheet” to get you up to speed.

By the way, if your hospital is in the CJR program, you should already be working on planning and implementation.  April 1st is sooner thank you think (no foolin’).

A mandated program?

  • The program is mandatory for hospitals in 67 markets (called MSAs). There’s no application process – you’re in or you’re not.
  • CJR 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.
  • CJR includes DRGs 469 and 470.
  • The program begins April 1, 2016 and continues for 5 “years” – the first “year” (2016) is 9 months long.
  • You are at risk beginning Jan 1, 2017 (there is only upside during 2016).
  • Gainsharing with other providers is allowed within program guidelines.
  • Price targets become 100% regional-based by year 4 (phased in over time).

But what else?

  • Medicare takes 3% of the top of the TOTAL program.
  • That means you need to drive total spend down by 3% to break even.
  • Moreover, if the post-acute portion is about 50% of the bundle, you need to drive post-acute spend down by 6% just to break even.
  • CMS will 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.
  • OIG has issued a ruling (see CJR URL above) addressing safe harbor for issues such as anti-kickback, CMP, self-referral, etc.

Can you tell me more?

  • The program only applies to Medicare FFS beneficiaries.
  • There are program exclusions such as unrelated readmissions and certain Part B services (see CJR URL above).
  • All providers will continue billing FFS meaning your revenue cycle model will not change. Gains/losses are calculated on a retrospective basis annually.
  • The initial target price 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 2 years.
  • The target is based on the performance of all hospitals in a defined geography called a “region” (This is not the MSA; it is much larger than an MSA.)
  • 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 performance measures to be eligible for the savings you generate.
    • Those metrics are RSCR for THA/TKA, HCAHPS, a new voluntary reporting of patient-reported outcomes.
    • A score compared to national averages will determine your eligibility to share in savings as well as possible bonus payments (“Quality Incentive Payment”).
  • Claims data is available on request. It is unclear whether it will be available on a monthly or quarterly basis.  The process for requesting data has not yet been determined.

Xactly what should I be doing now?

  • If you’re in the program, you need to begin work now.
  • If you’re not in the program, you may want to consider preparing as it is expected that this program will be expanded in the future.
  • Here are the “top 3” to-do’s for you:
    • PLANNING – Get experienced help for your project. These people are getting hired by other hospitals so the longer you wait, the less chance you’ll have of nabbing the help you’ll need.  This includes getting an analytics partner.
    • GAINSHARING – Identify your surgeon partners. Begin negotiating contract terms to have contracts in place by April 1, 2016.  This deadline is required for surgeons to share in gains for 2016.
    • POST-ACUTE NETWORK – Hint: your key partners will be SNF and HHA. Establish a formal selection/integration process and associated performance criteria.  This network should be in place by April 1, 2016 to maximize your revenue potential.

Y start now?

Keep in mind that target prices 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.

Zis can’t be for real?

It is.  Get to work….now.

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.