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Proposed Medicare Changes: Excluding Certain Procedures Could Derail CJR Success

DATE: July 20, 2017

On Friday, July 14, the Centers for Medicare and Medicaid Services (CMS) released the 2018 Outpatient Prospective Payment System (OPPS) proposed rule. While some of the contents aren’t surprising, there is a key issue at stake that could fundamentally alter the way the Comprehensive Care for Joint Replacement (CJR) bundled payment model functions.

The proposed OPPS rule removes outpatient knee replacement procedures from the inpatient-only list, allowing providers to perform knee replacements in an outpatient setting and, in turn, removing those patients from the CJR program. Generally speaking, the patients who will clinically qualify for an outpatient knee replacement will be the less intensive, less complicated patients; patients who will still require an inpatient stay are the more medically complex patients.

Why does this matter? CMS uses three years of historical data to set 90-day episode payment targets for each participant in the CJR program. The less complex, lower-cost patients were included when CMS established their historical baseline data. This means the targets CMS will use for the remaining more complex patients (i.e., more expensive 90-day bundle) will be based on a different mix of patients than the patients who will remain in the program. This new rule shifts the target away from CMS’ initial assessment, and means participants with a significant amount of knee replacement patients in their CJR program will be disadvantaged. And, while the current proposed rule only makes this change for knee replacements, CMS is also seeking comment on whether partial and total hip arthroplasty also should be removed from the inpatient-only list and added to the ambulatory surgery center-covered surgical procedure list.

The remedy for this proposed change will be difficult. Ideally, CMS should recalculate the target to reflect the patient mix that will exist after patients migrate to outpatient settings, but identifying those patients retroactively in the baseline data will be difficult. There aren’t universal, specific criteria applied by surgeons in selecting the setting for their surgeries.

This proposed rule could negatively affect participants who have worked hard to meet or exceed their performance goals. The fact that this change has been proposed several times before means that it is highly likely to move forward.

Recommendations

DataGen recommends that participants evaluate their data to understand the effect of this proposed rule and monitor any changes that CMS proposes to the target setting process moving forward. Providers who oppose this proposed rule should submit comment by September 11, 2017 on the negative impact to CMS and reach out to their professional associations.

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