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Medicare’s mandatory Comprehensive Care for Joint Replacement (CJR) initiative has begun implementation in 67 Metropolitan Statistical Areas (MSA) around the country. This declarative shift to value-based care now places hospitals, surgeons, and practitioners at financial risk if health systems are unable to deliver good outcomes for patients with hip and knee joint replacement.
With the constant influx of policy updates in the hospital industry, it can be difficult to not only keep up to date with changes, but really have an in depth understanding of how CJR will impact healthcare providers.
The purpose of CJR will be to test if bundled payments to hospitals for lower extremity joint replacement (LEJR) surgeries will reduce Medicare expenses while simultaneously improving the coordination of care from surgery all the way to recovery.
"According to the CDC, hip and knee replacements constituted nearly 1 million procedures and more than $7 billion in hospitalizations alone, with the costs of the procedure varying greatly from region to region."
It is estimated that the CJR initiative will affect approximately 23% of all LEJR procedures and generate approximately $343 million in Medicare savings over 5 years.
To decipher the mandate, we’ve broken it into three key opportunities for surgeons and other healthcare clinicians: gainsharing, increased flexibility in the post-acute setting, and enhanced patient satisfaction.
Under CJR, hospitals, surgeons and practitioners have authority to enter into financial arrangements with CJR collaborators for the purpose of implementing care redesign developments and achieving financial alignment under the Medicare mandate. A CJR hospital, through sharing arrangements and execution of written collaborator agreements, may make gainsharing payments to collaborators. As such, healthcare providers have an opportunity to receive additional CJR payments from the hospital.
In principle, CJR aligns the incentives of the hospital, the clinicians, and the patients by driving for best and most timely outcomes at lowest cost. It also opens the doors for innovators to develop and deploy solutions that help automate, connect, and coordinate effective, efficient care.
In order to be considered a CJR collaborator, healthcare providers must either have met or agree to meet with the participant hospital’s quality selection criteria.
Limits and risks
Medicare has specified that the total gainsharing paid (includes reconciliation and internal costs savings) to a physician or PGP must not exceed a 50% cap of the sum of the total Medicare approved amounts under the MPFS. For example, if a physician furnishes services during a CJR patient episode in the amount of $4,000, the cap would be $2,000.
Collaborators should also keep in mind the limits placed on the reconciliation payment amounts set by Medicare, which places stop-gains and stop-limits on how much a hospital can lose or gain based upon their target price.
In performance year 1 for example, Medicare will not penalize hospitals for incurred costs that exceed the target price but will limit the max reconciliation amount to 5% of the target price. Both stop-gain and stop-loss limits will gradually increase to 20% by years 4 and 5.
2. Increased flexibility in the post-acute setting
Traditionally, Medicare has only paid for telehealth services in certain geographic areas and under specific requirements. One such requirement being that telehealth visits must occur at an “originating site” as dictated by Medicare. This excludes the patient’s home or place of residence. A facility fee would then be paid to the originating site and a separate payment would be made to the healthcare provider for the service.
Under CJR, with exception to face-to-face encounters for home health certification, Medicare will waive the geographic site requirement and allow patients from any region to receive telehealth services related to CJR. All other telehealth requirements set forth by Medicare must still be met.
By removing the geographical constraints for use of telehealth services, CJR allows clinicians and patients to connect however they find works for them to affordably improve outcomes. It’s a welcome and overdue nod to the value of telehealth solutions and appropriate deferral to the clinicians and patients to find what works best for them.
Furthermore, Medicare will waive the originating site constraint if the telehealth service furnished, originates in the patient’s home or place of residence. Physicians and approved non physician providers (NPP’s) will then be able to bill for in-home visits as long as they do so under one of nine CJR specific Healthcare Common Procedure Coding System (HCPCS) G-codes and comply with certain conditions. The G-codes and detailed telehealth requirements can be viewed in Medicare’s CR-9533.
Post-discharge home visits
A Medicare beneficiary must be considered “home bound” in order to qualify for home health services. Only then, can physicians and NPP’s furnish services to the beneficiary’s home or place of residence and receive payment from Medicare.
However, for the purpose of promoting care coordination and monitoring of a patient’s condition in CJR, Medicare is waiving the "incident to" direct physician supervision requirement.
Again, this waiving of specific process rules is welcome ‘permission’ being granted by CMS to treating clinicians to allow them to deliver best possible outcomes in the most efficient way available for each specific patient.
"Focusing more on costs and outcomes and less on mandated process elements has to happen if we are going to unleash the power of innovation in healthcare.”
Patient engagement incentives
Healthcare providers can also take advantage of the patient engagement incentive (PEI), which waives certain fraud and abuse laws in order to permit hospitals to provide certain services or technologies that promote patient engagement or management of the beneficiary’s care.
Under the conditions of the incentive, the item must be considered “in-kind” and not exceed $1000 if the item being provided involves technology. It must be used to either encourage preventative care, adherence to treatment, or advance other CJR clinical goals. Provisioning of cash or other cash equivalent items are not considered patient engagement incentives. For example, hospitals can provide technologies that remotely monitor a patient’s adherence to care or leverage telehealth if a patient is discharged directly home. It cannot, however, rewards patients with gift cards.
3. Enhanced patient satisfaction
The mean estimated Medicare payment is roughly $26,000 where approximately 55 percent of that spending comes from inpatient services, 25% from post acute care services, and 20% from physician and other outpatient spending.
CJR places the acute care hospital at the center, making them the episode initiator responsible for the outcomes and costs of care from admission through 90 days post discharge. By doing this, Medicare believes CJR will give the hospital incentive to explore new care models that will democratize the process of healthcare delivery for beneficiaries undergoing a joint replacement procedure.
CJR effectively uses reimbursement to incentivize new links between pre-op, in-hospital, and post-acute care. The patient has always had to traverse these separate steps, often with clumsy or inefficient transitions. With payments now linking these all together, there is new incentive to ease the transitions and enhance the efficiencies.
Leveraging digital health technology
Digital health technologies can serve as an attractive solution for healthcare providers and hospitals that seek to innovate the post acute care continuum. Technologies that leverage remote monitoring and telehealth have potential to extend the provider’s reach beyond the in-clinic setting and into the patient’s home.
Digital health technologies offer enormous potential to bridge the gaps and smooth the transitions. By automating, connecting, and coordinating care across different settings, we can avoid the frictional losses, logistical challenges, and patient frustrations of multiple transitions.
These technologies can also enhance patient engagement and promote patient adherence to care programs at home, which are crucial to an effective joint replacement recovery. Clinicians can also utilize these technologies to safely determine which patients will be in most need of their care.
A recent study in the Journal of Telemedicine and Telecare showed that clinical outcomes for postoperative tele-rehabilitation was equivalent to traditional care and demonstrated lower outpatient utilization following total knee arthroplasty (TKA) patients.
It is a clear signal of an accelerated transition from volume to value, with Medicare creating greater incentive for hospitals to integrate both acute and post acute care services.
CJR as an alternative payment model speaks to a changing philosophy—one that links payments to outcomes and rightfully leaves the process details of achieving those outcomes to the at-risk providers. Attendant with this change is the need for providers to welcome, if not frankly encourage, innovation that exploits the efficiency of moving data more than moving patients—innovation that democratizes, decentralizes and demystifies healthcare as much as possible. Its is no longer about process and billing codes as much as it will be about best outcomes at lowest possible cost.
by Joseph Smith, MD, CEO