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Government Mandated Healthcare Payment Reform is Coming

TRiding the Storm Outhe Centers for Medicare & Medicaid Services (CMS) is effectively implementing  a strategy to shift Medicare Fee-for-Service (FFS) payments to alternative reimbursement models. CMS proposed the first mandatory bundled payment model, i.e. the Comprehensive Care for Joint Replacement Model (CCJR), in July as a 5-Year Program CY2016-2020.

CCJR covers Fee-for-Service Medicare beneficiaries discharged under MS-DRG 469 and 470 (Lower Extremity Joint Replacement (LEJR) procedures). The proposed bundle will cover all related Medicare Part A and Part B services across the episode of care, which CMS defines as beginning at inpatient admission through 90 days post-discharge.

As proposed, the CCJR model applies to hospitals in 75 designated Metropolitan Statistical Areas (MSAs). Only hospitals participating in Phase 2 of the Bundled Payments for Care Improvement (BPCI) initiative are exempt from the mandatory CCJR program. The Bundles are retrospective (Revenue Cycle not affected) and Hospitals may share risk with Physicians and Post-Acute Care (PAC) Providers. CCJR effectively moves all reimbursements to a bundled payment model for 25% of Total Joint Replacements beginning January 1, 2016.

Why Should You Pay Attention?

  • Significant financial consequences
  • Mandates minimum acceptable performance on three pre-determined quality measures Opportunity for Orthopedic alignment
  • Major impact to PAC Providers CCJR will likely expand to many more DRGs
  • Claims data is very complex
  • More than 70% of Hospital organizations report no experience with episodic payments (as proposed).
  • >90% of all Patient Readmissions occur Post-Discharge
  • Patient Retention & Referrals: 88% of Patients engaged in follow-up Post-Discharge rate their care in the 90th percentile; conversely, Patients without contact are 74% likely to rate their care in the 30% percentile
  • Significant variation in each MSA will affect network implementation How Are You Responding?

Benefits to Hospitals and Physician Groups

  • Alignment of Orthopedic and Spine Services
  • Care Coordination from Pre-Surgical through 90 days Post-Acute Care
  • Patient Engagement and improved HCAHPS
  • Reduced Readmissions from actionable alerting
  • Monetizing Patient Reported Outcomes (PRO), i.e. quantifying qualitative metrics tied to implants, surgeons, and systems to drive effective Surgeon Preference Sourcing, Resourcing, and Asset Allocation decisions
  • Simplification, vastly improved patient engagement, and transparency of the entire patient episode

Making It Work Under Payment Reform

  • Call-to-Action: how will you make this mandatory payment model work?
  • Capability: Are you equipped to effectively manage bundled payments?
  • Enabling Technologies: do you have the toolsets that enable high-integrity care coordination and patient engagement?
  • Actionable Reporting & Analytics: do you have the robust data and analytics tools to performance measure & manage your care tracks?
  • Network & Partnerships: do you maintain a network of preferred partners established and essential resources identified to effectively manage the risks and opportunities to be successful within this new reimbursement structure?

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