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Prepare for new 2016 Medicare joint replacement bundled payment policy

Medicare will press ahead with a new bundled payment policy for lower extremity joint replacements next year, CMS announced in a final rule issued Nov. 16.
The Comprehensive Care for Joint Replacement (dubbed CJR by CMS), will be structured slightly differently than the agency proposed in July. Hospitals and providers in 67 geographic areas will be affected – not 75, as proposed – and “nearly all” hospitals in those areas will be required to participate.
Also, while CJR will take effect Jan. 15, 2016, the first of the program’s five experimental “model performance periods” won’t start until April 1.
During each of those periods, for the affected hospitals, physicians and post-acute providers, “all related care within 90 days of hospital discharge from the joint replacement procedure will be included in [a payment for] the episode of care,” CMS explained in the rule.
Hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries – in 2014, the program paid more than $7 billion for hospital fees for more than 400,000 lower extremity joint replacements, CMS stated.
The cost of individual surgeries ranges from $16,500 to twice that amount, depending on the geographic area. In addition, the quality of care also varies greatly from hospital to hospital, according to the agency.
The purpose of CJR is to standardize both cost and quality by incentivizing hospitals and physicians to better coordinate patient care.
Look for more details about its impact in an upcoming issue of Part B News.
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