Guest Post: Get Ready for Medicare’s CJR Model

OrthoBuzz occasionally receives posts from guest bloggers. This “guest post” comes from Richard S. Yoon, MD and Alexander McLawhorn, MD, MBA.

Starting on April 1, 2016, Medicare will implement its Comprehensive Care for Joint Replacement (CJR) model in about 800 hospitals in 67 metropolitan areas around the United States. Finalized in November 2015, the CJR initiative is intended to enhance value for patients undergoing lower extremity joint replacement (LEJR) by motivating institutions to achieve quality improvement via cost control. (For a complete discussion of “value” in orthopaedics, see “Measuring Value in Orthopaedic Surgery” in JBJS Reviews.)

Medicare hopes CJR will promote standardized, coordinated care that takes each LEJR patient seamlessly through an “episode of care” that maximizes outcomes at a reduced cost.  Episodes are triggered by hospital admission and are limited to admissions resulting in a discharge paid under MS-DRG 469 or 470. For CJR purposes, episodes last for 90 days following discharge.

Initially, episode target prices will be based on historical hospital-specific reimbursements, but over time, the target prices will increasingly reflect regional averages. If a hospital’s average LEJR episode cost is below the target price, it can receive a “bonus” from CMS. If its average cost is above the target price, it will owe CMS the difference. CMS has designed a gradual rollout plan to mitigate downside risk in the first year and provide current and future participants adequate time to implement evidence-based, cost-effective care and other quality programs in their institutions.

Richard Iorio, MD, chief of adult reconstruction at NYU-Langone Medical Center’s Department of Orthopaedic Surgery, says, “There will be definite winners and losers in CJR. Once geographic pricing becomes the dominant metric for target prices, there will be intense price competition in geographic areas and potential access problems for high risk patients.” At the moment, CJR stratifies risk based only on MS-DRG code and whether a patient has a hip fracture. Unless a more robust risk stratification method is implemented, “cherry-picking” patients may become a significant issue. (See related OrthoBuzz post “Tool for Pre-TJA Risk Stratification.”)

If you are an orthopaedic surgeon who performs LEJR, ask your department head or health system about CJR, because strategies that minimize cost and maximize quality may vary from hospital to hospital. Alignment of hospitals and surgeons is probably the most critical success factor  with CJR. To that end, gainsharing— a key component of well-functioning hospital-surgeon partnerships within any bundled-payment environment —for individual orthopaedic surgeons is specifically allowed within the CJR final rule.

Click here for more information, including FAQs and a list of participating areas.

Richard S Yoon, MD is executive chief resident at the NYU Hospital for Joint Diseases.

Alexander McLawhorn, MD, MBA is an arthroplasty fellow at the Hospital for Special Surgery.

 

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One response to “Guest Post: Get Ready for Medicare’s CJR Model”

  1. Mark Sanders MD FACS says :

    At this year’s AAOS meeting, I encountered several old friends and colleagues, whose principal hospital had gone bankrupt. Not long ago, the entire Orthopaedic surgery department at Wayne State University in Detroit was fired without just cause. None of the faculty members received what was owed them.
    While I have no doubt that Medicare will send a considerable check to the hospitals, what guarantees are there that the physicians, either employed or in office-based practice will ever receive the funds? In short, I think this utopian system is ripe for corruption as the greedy hospital administrators run for the hills just prior to filing bankruptcy.

    Like

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