CMS Proposes Changes to the Comprehensive Care for Joint Replacement Model

    The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule to the Federal Register that would provide a 3-year extension and make other pricing and reconciliation changes to the Comprehensive Care for Joint Replacement (CJR) model for elective total hip arthroplasty (THA) and total knee arthroplasty (TKA) procedures in Medicare patients.

    The CJR model launched on April 1, 2016, and is currently scheduled to end on December 31, 2020. The aim of CJR, according to CMS, is to reduce expenditures while preserving or enhancing quality of care by supporting better and more efficient care for beneficiaries undergoing THA and TKA.

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    The proposed rule would change certain aspects of the CJR model:

    Extend the CJR model for 3 additional performance years: performance year 6 (2021) through performance year 8 (2023)

    Change the definition of a CJR episode to include outpatient THA and TKA to address changes to the inpatient-only (IPO) list that now allow these procedures to be done in the outpatient setting

    Change the CJR target price calculation

    • Change the basis for the target price from 3 years of claims data to the most recent 1 year of claims data
    • Remove the national update factor and the twice-yearly update to the target prices that accounts for prospective payment system and fee schedule updates
    • Remove anchor factors and weights
    • Incorporate additional risk adjustment to the target pricing
    • Change the high episode spending cap calculation methodology

    Change the CJR reconciliation process

    • Move from 2 reconciliation periods (conducted 2 and 14 months after the close of each performance year) to 1 reconciliation period that would be conducted 6 months after the close of each performance year
    • Add an episode-level risk adjustment beyond fracture status, such that target prices will be further adjusted at the episode level based on the individual beneficiary’s age and HCC condition count
    • Change the high episode spending cap calculation methodology used at reconciliation
    • Add a retrospective trend adjustment factor that will better capture changes in Medicare program payment updates and care delivery patterns
    • Change the quality (effective or applicable) discount factors applicable at reconciliation to participants with excellent and good quality scores to better recognize high-quality care

    The proposed rule also makes conforming changes to the beneficiary notification, gainsharing caps, appeals process, and waiver sections to align with the proposed model extension as well as the proposed changes modifications to episode definition.

    The American Association of Orthopaedic Surgeons (AAOS) has indicated that it will send CMS formal comments on the changes by the April 24 deadline. In the meantime, the association released the following statement from Council on Advocacy Chair Wilford K. Gibson, MD, FAAOS:

    “The AAOS is encouraged by the new opportunities proposed which recognize the role and stewardship of practitioners in lower extremity joint replacement (LEJR) care. Welcome changes include the incorporation of hip and knee replacements in the outpatient setting, as well as a new risk adjustment methodology to account for patient health complexity. It is interesting too that CMS is considering a similar model for ambulatory surgical centers.

    “We are still opposed, however, to the mandatory nature of CJR. In addition, CMS’ desire to readjust the target price using only the most recent year of claims data — as opposed to 3 years’ worth — is likely to hamper financial performance of model participants and have other unintended consequences. We are also concerned with the agency’s decision to continue with hospital leadership as opposed to physician leadership and exclude voluntary participants, many of whom have invested significant time, energy, and resources promoting value-based care.

    “AAOS hopes that CMS will address these concerns in striving to create a future payment arrangement for procedures across the care continuum. We look forward to submitting formal comments and continuing to work with the agency on developing patient safety and appropriate site of care guidelines for LEJR procedures.”

    The CMS fact sheet on the proposed rule can be found here.