CMS rolls back joint replacement program, jettisons Obama-era episode payment programs

by Laura Evans, CPC on Aug 16, 2017
CMS is preparing to cancel four mandatory episode payment models for common cardiac and orthopedic conditions that were due to begin in January, according to a proposed rule issued Aug. 15.
Within the same proposal, the agency also revealed plans to dramatically dial back the comprehensive care of joint replacement (CJR) program that has been in effect since April 2016.
The deleted payment models include:
  • An episodic payment model for surgical treatment of hip and femur fractures,
  • Two separate episodic payment models for coronary artery bypass grafts and care of patients with acute myocardial infarction, and
  • An incentive payment program for cardiac rehab services.
For CJR, the agency proposed to reduce the number of geographic areas where hospitals are required to participate from 67 to 34. Low-volume and rural hospitals would no longer be required to participate in CJR in all of the geographic areas. Participation in CJR would be voluntary in the 33 geographic areas where it is no longer required.
The agency also proposed some tweaks to the CJR program, such as adding facility practice expense relative value units (RVUs) to CJR telehealth codes, and providing a means for CJR-participating clinicians to be considered qualifying participants in advanced alternate payment models under Medicare’s Quality Payment Program.
CMS postponed the start of the new episode payment models in January, March and May as the agency grappled with how to proceed with the programs given HHS Secretary Tom Price’s open ambivalence to them.
The Trump administration appears to take exception to the mandatory nature of the bundled payment programs, which require hospitals to assume a certain amount of risk for a given episode of care, such as a joint replacement.
Noting that a number of providers are participating in voluntary initiatives, CMS said in the proposed rule that it expects to continue to offer more such programs for hospitals and clinicians to participate in if they wish, including episode payment models.
However, “we are concerned that engaging in large mandatory episode payment model efforts at this time may impede our ability to engage providers, such as hospitals, in future voluntary efforts,” the agency said.
CJR requires hospitals and participating physicians to accept a set payment amount for hip and knee replacements. While the providers are reimbursed in the usual fashion for the services they provide during and after the surgeries, Medicare reconciles those payments against the target episode payments for their metropolitan statistical area. The payment includes all expenses related to the surgeries, including post-acute care and care of complications.
Wage-adjusted CJR payments range from $22,604 in Portland, Ore. to $33,072 in Miami, Fla., according to the proposed rule. If the providers can deliver the care for less than the target amount, they receive an incentive payment.
The mandatory payment models had been developed by the Medicare Innovation Center under the Obama administration. The head of that center, Patrick Conway M.D., recently left CMS to helm Blue Cross Blue Shield of North Carolina.
The 34 areas where CJR will continue to be required, which include Akron and Cincinnati, Ohio, Harrisburg and Pittsburgh, Pa. and seven Florida localities among others, had higher spending on average for the procedures. “In general, we note that hospitals located in higher cost areas have a greater potential to demonstrate significant decreases in episode spending,” CMS states in the proposed rule. – Laura Evans, CPC (
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