Three more years of CJR: What participating hospitals need to know

On April 29, CMS issued a final rule to extend the Comprehensive Care for Joint Replacement model by an additional three performance years. A number of modifications effective in the extension period aim to improve the model and reflect Medicare policy changes over the last several years. CMS anticipates that CJR will save the Medicare program an additional $217 million over the extension period. The following summarizes the most notable model changes:

• Three new performance years have been added: PY 6 will include episodes that end between Oct. 1, 2021 and Dec. 31, 2022; PY 7 will include episodes that end between Jan. 1, 2023 and Dec. 31, 2023; and PY 8 will include episodes that end between Jan. 1, 2024 and Dec. 31, 2024.
• Episode definitions under the model have been expanded to include total hip arthroplasty and total knee arthroplasty procedures performed in the hospital outpatient setting. The episode categories under the extension are site-neutral and are defined as:
• MS-DRG 470: TKA and THA without fracture – inpatient and outpatient episodes
• MS-DRG 522: THA with fracture – inpatient and outpatient episodes
• MS-DRG 469: TKA, THA without fracture, total ankle replacement – inpatient episodes only
• MS-DRG 521: THA with fracture – inpatient episodes only
• The baseline period used to calculate regional target prices will be reduced from a three-year period to the most recently available one year of data. Calendar year 2020 will not be used as a baseline year due to impacts of the COVID-19 public health emergency. Adjustment for Medicare fee-for-service payment system changes and market trends in utilization will now be accomplished through a retrospective market trend adjustment. Additional episode-level risk adjustment will be implemented based on beneficiary dual eligibility status, age and count of hierarchal conditional categories.
• CMS will perform a single reconciliation for each new performance year, beginning six months after the performance year ends. Compared to previous years of the model, hospitals will have greater opportunity to reduce the 3% discount factor that sets the episode target price based on composite quality score performance.
• Good quality performance – 1% reduction in PYs 1-5; 1.5% reduction in PYs 6-8
• Excellent quality performance – 1.5% reduction in PYs 1-5; 3% reduction in PYs 6-8
• It is significant to note that the reduction of the discount factor by three percentage points for hospitals with the highest quality performance effectively removes the discount factor in entirety and alleviates some “race to the bottom” concerns for target prices.
• One hundred and thirty-nine hospitals participating in the CJR model under voluntary status will be excluded from PYs 6-8. This exclusion applies to any remaining participant hospitals in the 33 voluntary Metropolitan Statistical Areas and hospitals with rural or low-volume status in the 34 mandatory MSAs.

Hospitals that remain under mandatory participation in the CJR model will have PY 6 episodes initiated by an anchor procedure furnished on or after July 4, 2021, and subsequently ending on or after Oct. 1, 2021. To get ready for the three-year extension period, hospitals should take several steps:

• educate the joint replacement care team on the CJR model’s extension;
• evaluate outpatient episode experience and opportunities;
• re-engage and set goals with post-acute care partners; and
• estimate potential performance under the new target prices.