CMS' new bundled payment program: 3 things to know

Hip and knee replacement surgeries cost CMS more than $7 billion in 2014, and more than 400,000 beneficiaries went under the knife. Still, there was little consistency in terms of the cost and quality associated with such procedures.

Thus, CMS launched the Comprehensive Care for Joint Replacement Model (CJR) in 2016, a program that is expected to last five years. An April 2016 blog post by Kevin Conway, MD, then-deputy administrator for innovation and quality and chief medical officer at CMS, described the program as a “major step toward transforming care delivery in Medicare.” In his post, Conway highlighted the fact that post-surgical infections or implant failures can be three times higher at some facilities than at others.

Across the country, 791 hospitals in 67 urban areas are taking part in the CJR program, which builds on the agency’s voluntary demonstration projects with bundled payment. These projects include the voluntary Acute Care Episodes (ACE), which ran from 2009 to 2013 and tested the use of global payment for an episode of care, and the Bundled Payments for Care Improvements (BPCI) Initiative, which launched in 2013 and is ongoing; this program is made up of four models of care, which link payments for the various services patients receive throughout an episode of care.

For joint replacement surgeries, CJR begins with a Medicare beneficiary’s admission to a participant hospital and ends 90 days after discharge. Included in those 90 days could be outpatient care, home health, physician services, readmissions, and post-acute facility services. CMS’ goal is to incentivize providers to coordinate care across treatment settings, while reducing unnecessary services and expanding initiatives that hasten patients’ recovery.

Next: Three things to know

Here are three of the biggest things participants and nonparticipants need to know about the program.

1.     How quality and financial measures work

The two quality measures captured in the CJR bundle include total hip arthroplasty and/or total knee arthroplasty complications measures, in addition to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure.

Haas

From a financial perspective, hospitals are being measured against a regional benchmark set by CMS. Derek Haas, chief executive officer of Avant-garde Health, which provides analytics to hospitals to determine the cost of care, notes that this benchmark is initially set based on a hospital’s historical performance, thus, accessing this information is very valuable. Further, since discharge disposition is the single largest lever to achieve savings as part of the CJR program, tracking this measurement over time is critical.

“The underlying claims data for patients is very helpful to know if a patient was readmitted at a different hospital in your area for a reason, so you can get a sense of which skilled nursing facilities in your area are more effective overall; not just in terms of minimizing the stay at the skilled nursing facility, but more generally making sure that patients are able to cost-effectively [receive] high-quality treatment over the full care episode,” says Haas.

2.     Biggest hurdles to prepare for        

Bozic

Building trust and sharing information among providers are the two biggest hurdles facing hospitals in the CJR program, says Kevin Bozic, MD, chair of the department of surgery and perioperative care and professor of orthopedic surgery at the Dell Medical School at the University of Texas at Austin. That’s because hospitals need to depend on the quality of care provided at skilled nursing facilities and home health providers that provide post-operative care for their patients.

Bozic recommends that providers focus on mapping out care plans from a patient perspective-everything from the patient education that occurs before the surgery to the care they receive after leaving the hospital. Providers must understand these steps and eliminate the steps that don’t add value, he says.

Facilities also must determine the costs and outcomes associated with each of the steps involved in a hip or knee replacement surgery. “While surgical approaches must rely on clinical decision-making, some steps are often duplicative and don’t add value. The goal is to eliminate the steps that don’t create value, while improving outcomes and reducing costs,” Bozic says.

Just as important is figuring out how much of the care cycle a facility has control over-for example, the surgery and the hospital stay-and the aspects of care that the facility can influence through partnership and collaboration, such as the care provided by a home health provider or at a skilled nursing facility.

Echoing that sentiment, Haas says that many hospitals and physician groups don’t have good insight into the full utilization of the care patients receive. “A critical first step is understanding the ‘as is’ situation for their patients today in terms of their spend over the whole care episode,” he says.

After that, providers need to develop a baseline to understand where they have opportunities for delivering care at the same or higher quality on a more cost-effective basis. Subsequently, providers need to track their performance, so that they can determine if they’re getting better or worse over time. With this data, providers will then be able to develop a prioritized game plan in order to be successful, says Haas.

Some hospitals that have been part of accountable care organizations (ACOs) have cost and outcome data, which is helpful, says Haas. Most of the CMS bundles are focusing on the post-hospitalization opportunities in the 90 days after their discharge from the hospital. That’s why the underlying claims data for those patients is very helpful in determining if a patient is readmitted to a different hospital in the area for any reason, he says.

This exercise also allows providers to get a sense as to which skilled nursing facilities in their area are most effective overall-not just in terms of minimizing a patient’s stay but more generally making sure that patients are receiving cost-effective, high-quality treatment over the full care episode, says Haas.

3.     Opportunities to consider

A big part of CJR is making sure patients are successfully prepared for the hip or knee surgery. That requires educating the patient and their family, in addition to assessing their post-hospitalization expectations, says Bozic. The primary goal is to ensure that they’re prepared to successfully go through each of the different steps of the care process.

Goldmann

With hip and knee surgeries, “volume does matter,” says Don Goldmann, MD, chief medical and scientific officer at the Institute for Healthcare Improvement, referring to the fact that the facilities that perform the highest number of these surgeries tend to have better outcomes. What that means is some providers might discover that performing hip and knee surgeries isn’t a sustainable model. “If I were the head of a hospital where I didn’t have the volume of [hip and knee surgeries] and I didn’t have a great plan, I would think of getting out of that business,” he says.

Hospital executives, in particular chief financial officers, should be really excited to take advantage of the opportunities associated with bundles, says Haas. “There’s tremendous potential to make even more money [with bundles] than with fee-for-service. There are more levers providers can deploy to optimize care delivery.”

Aine Cryts is a writer based in Boston.