As part of the new Alternative Payment Model (APM) intended to improve the patient experience, increase the population’s health, and reduce per capita costs for certain medical procedures, Medicare has launched the Comprehensive Care for Joint Replacement (CJR) Bundled Payment Model. The program went into effect in April 2016 and will continue for the next 5 years.
The CJR is a bundled payment program that focuses on hospitals where joint replacement procedure patients discharged under MS DRG 469 or MS DRG 470 have taken place. The initiative will take place individually in what are called “episodes of care” that begin once a patient is admitted to the hospital and continue until 90 days after the surgery. The broad inclusion of MS DRG 469 and MS DRG 470 means that most “major joint replacements or re-attachments of the lower extremity” are included in the program.
Medicare will calculate the payments for each type of procedure covered based on the preexisting average regional cost for a particular procedure. Additionally, prices for MS DRG 469 and MS DRG 470 cases will vary due to the complications associated with a MS DRG 469 discharge. Target prices for procedures will be set for each hospital and for each type of surgery twice a year (January 1st and October 1st). The target price also includes the cost of inpatient stay and all related care covered under Medicare Parts A & B, with some important exclusions.
Unlike other bundled payment programs, the CJR model pays all the providers separately under Medicare’s “usual fee-for-service systems.” However, at the end of each year, the cost of an episode of care will be weighed against the Medicare target price set for that episode. If the target price is breached, the hospital may be required to reimburse Medicare (through a repayment) for a certain percentage of the cost of care. Additionally, if the total cost of an episode of care is less than the target price AND if the hospital meets certain quality requirements, it may be provided a reconciliatory payment (bonus).
The overall goal of the CJR model is to force better coordination amongst the healthcare providers involved in providing care for MS DRG 469 and MS DRG 470 cases and to help bridge the disparities in the quality and cost of care across hospitals in the United States. Medicare believes that if surgeons, hospitals, and post-surgery care providers have better coordination, the quality of care will increase while significantly decreasing the cost of care.
