On November 16, 2015, the Centers for Medicare & Medicaid Services ("CMS") issued a public inspection copy of the "Final Rule" related to the Comprehensive Care for Joint Replacement ("CJR") Model.  Also on November 16, CMS and the Office of the Inspector General ("OIG") jointly issued notice of waivers of certain fraud and abuse laws in connection with the CJR Model.   

This Health Law News article is intended to provide a high-level summary of the revisions set forth in the Final Rule related to the CJR Model.  The CJR Model is a retrospective bundled payment program limited to lower extremity joint replacement procedures that is designed to impose financial consequences and other requirements to force hospitals to engage in care redesign efforts with other health care providers involved in episodes of care for such procedures. 

The Final Rule contains significant changes from the Proposed Rule issued by CMS in July 2015 (click here to view a summary), including a delay in the effective and applicable dates for implementation of the CJR program.  The Final Rule will be effective January 15, 2016 but will not be applicable until April 1, 2016 when the first CJR performance period will begin.  Risk sharing under the Final Rule will not begin until January 1, 2017.  Under the Final Rule, the CJR program is still effective through December 31, 2020. 

Other notable revisions contained in the Final Rule include (but are certainly not limited to) the following: 

  • Elimination of eight Metropolitan Statistical Areas that would have been subject to CJR under the Proposed Rule1;
  • Revisions to episode historical payment and target pricing calculations, including consideration of historical payment and target pricing attributable to joint replacements for hip fractures;
  • Revisions to minimum quality protections generally applicable to CJR as well as revisions to quality thresholds that must be met before participant hospitals may receive gainsharing payments;
  • Application of composite quality scoring calculations, including consideration of patient-reported measures and hospital improvements in quality, that will be used to assign hospitals into acceptable, good and excellent quality categories for purposes of determining eligibility for gainsharing payments;
  • Elimination of hospital readmission rates as a separate quality measure;
  • Additional provisions and safeguards that must be included in CJR collaboration/sharing agreements;
  • Requirements for written agreements documenting any distributions of gainsharing payments from physician group practice collaborators to individual physicians, midlevel practitioners or others who ultimately receive proceeds of gainsharing payments (such individuals are referred to in the Final Rule as "practice collaboration agents");
  • Addition of grounds for remedial action against participant hospitals that fail to comply with CJR requirements.  Such grounds for remedial action include avoiding potentially high-cost patients, targeting potentially low-cost patients and failing to provide medically appropriate services or systematically engaging in over- or under-delivery of appropriate care;
  • Addition of remedial actions (including additional repayment obligations for participant hospitals that are subject to repayment requirements) available to CMS for participant hospitals that fail to comply with CJR program requirements;
  • Elimination of provisions allowing beneficiaries to opt out of data sharing; and
  • Increase of monetary value thresholds for incentives that may be provided to beneficiaries.

The fraud and abuse waivers, which in many respects mirror those applicable to prior bundled payment programs, include waivers applicable to the following:

  • Gainsharing and alignment payments under sharing agreements between participating hospitals and collaborators;
  • Distribution payments from a physician group practice to a practice collaboration agent; and
  • Patient engagement incentives provided by participant hospitals to Medicare beneficiaries in episodes.