On April 29, 2021, the Centers for Medicare & Medicaid Services (CMS) posted the final rule Comprehensive Care for Joint Replacement Model Three-Year Extension and Changes to Episode Definition and Pricing to the inspection desk of the Federal Register (link). This final rule extends the Comprehensive Care for Joint Replacement (CJR) model through December 31, 2024 and modifies certain aspects of the model, including:

• Updates the episode of care definition to include outpatient hip and knee replacements;
• Changes the basis of target prices to episode baseline data from the most recent year;
• Removes anchor factor and weights and updates to the target prices as a result of prospective payment system changes.
• Reduces the number of reconciliation periods from two to one;
• Implements risk adjustment to more accurately set and adjust target prices;
• Changes the high episode spending cap calculation used during reconciliation from two standard deviations to the 99^th percentile of costs;
• Adopts market trend factor of mean cost for episodes in PY / base year;
• Reduces the 3 percentage point discount factor based on performance;
• Amends beneficiary notice so that prior to discharge from the anchor hospitalization or the anchor procedure, the participant hospital must provide the CJR beneficiary notice;
• Requires participant hospitals to provide CJR beneficiary with written notice of any potential financial liability associated with non-covered services as part of discharge planning;
• Revises the appeals process to be an on-the-record review, not an in-person review;
• Excludes hospitals in the 33 voluntary and 34 mandatory MSAs that are low-volume/rural;[1]
• Seeks feedback on potentially including Ambulatory Surgical Centers;
• Permanently adjusts the current model’s fifth performance year (PY) to end September 30, 2021 and finalizes that sixth PY will be 15 months (October 1, 2021 to December 31, 2022);
• Permanently adopts COVID-19 flexibilities for current model’s fifth performance year; and
• Permanently adopts two recently created MS-DRGs 521 and 522 for certain hip replacements into the CJR episode definition.[2]

CMS states that evaluations of the first three years of the existing model demonstrate that it is reducing costs with no negative impact on quality. As part of its extension, the Agency is updating the model to address recent policy changes[3] and improve the model’s ability to demonstrate savings. The final rule is scheduled to be published in the Federal Register on May 3, 2021 and unless otherwise specified, the effective date of provisions in this final rule is July 2, 2021.

Background

The aim of the CJR model is to support better and more efficient care for Medicare beneficiaries undergoing the most common inpatient surgeries: hip and knee replacements.  In 2014, before the model started, there were more than 400,000 of these procedures, and their cost was both high ($7 billion for the hospitalizations alone) and highly variable.[4] The current iteration of the model started on April 1, 2016 and was expected to end September 30, 2021.[5] As of the beginning of 2021, approximately 432 IPPS hospitals in 67 different MSAs participate in the CJR model.

The CJR model holds participant hospitals financially accountable for the quality and cost of a CJR episode of care and incentivizes increased coordination of care among hospitals, physicians, and post-acute care providers. The episode of care begins with an admission to a participant hospital of a beneficiary who is ultimately discharged under MS-DRG 469 (Major joint replacement or reattachment of lower extremity with major complications or comorbidities) or MS-DRG 470 (Major joint replacement or reattachment of lower extremity without major complications or comorbidities) and ends 90 days post-discharge.[6] The episode includes all related items and services paid under Medicare Part A and Part B with the exception of certain exclusions.

 

[1] MSA – Metropolitan Statistical Area

[2] For more on CJR model pricing, performance, and evaluations, refer to: https://innovation.cms.gov/innovation-models/cjr

[3] Specifically, in response to the change in the CY 2018 OPPS rule (65 FR 18455), which removed the Total Knee Arthroplasty (TKA) procedure code from the Inpatient-Only (IPO) list, and the change in the CY 2020 OPPS rule (84 FR 61353), which removed the Total Hip Arthroplasty (THA) procedure code from the IPO list.

[4] https://pubmed.ncbi.nlm.nih.gov/22878562/

[5] Extension to September 30, 2021 was added by Interim Final Rule published November 6, 2020 (85 FR 71142)

[6] In an Interim Final Rule published November 6, 2020 (85 FR 71142), CMS also added MS-DRGs 521 and 522 in the CJR episode definition, retroactive to inpatient discharges beginning on or after October 1, 2020, to ensure that the model continued to include the same procedures and account for adoption of new DRGs to describe these procedures.