On July 9, 2015, CMS released a proposed rule to revise how it pays for joint replacement procedures like hip and knee replacements, also known as lower extremity joint replacements (LEJR).  This payment structure, called the Comprehensive Care for Joint Replacement (CCJR) Model, encourages providers to improve the quality and coordination of care from LEJR surgery through recovery.  According to CMS, the new proposed CCJR bundled payment and quality measurement model is designed to address what CMS says is a large variation in the quality and cost of care, and to streamline the care experience for LEJR patients.  Hospitals in 75 geographic regions (performing at least 400 eligible LEJR cases between July 2013 and June 2014) would be required to participate in the proposed five-year model.  Comments on the proposal are due September 8, 2015. 

Under the CCJR Model, the hospital performing the LEJR would be accountable for the “episode” of care, which would begin at the time of surgery and end 90 days later.  Every year during the five performance years of the CCJR Model, Medicare episode prices would be set for LEJR procedures at each participating hospital.  While the normal Medicare payment rules and procedures would apply for episode services throughout the year, under the CCJR Model, a hospital would earn a payment bonus or incur a payment reduction depending on the hospital’s quality and cost performance during an LEJR episode.  Participant hospitals that achieve LEJR episode spending below the target price during a model performance year and also meet quality thresholds would be eligible to earn a payment from Medicare for the difference between the target price and actual episode spending, up to a specified cap.  However, hospitals with LEJR episode spending that exceeds the target price would be responsible for the repayment of the difference to Medicare (to be phased-in during performance year two of the model).

Under the proposal, the three quality performance measures that hospitals must meet to receive reconciliation payments are:

  1. Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1550);
  2. Hospital-Level 30-day, All-Cause Risk-Standardized Readmission Rate (RSRR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1551); and
  3. Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) (NQF #0166) Survey. 

Further, quality performance requirements for reconciliation payment eligibility would increase over the lifetime of the model, and the model would incentivize hospitals to avoid events such as complications and readmissions.

The proposal is set for publication in the July 14, 2015 Federal Register.  For the full CMS Fact Sheet, click here.