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Will CJR Quality Changes Cost You?

DATE: October 18, 2017

CMS’ new EPM final rule includes changes to the CJR program—changes that impact the composite quality score for CJR and demand attention now.

While the changes will begin with the performance year 2 (PY2) reconciliation, performance year 1 (PY1) will be re-reconciled as well, affecting episodes from both years. There are a few points to keep in mind:

    1. More CJR Hospitals are eligible for quality improvement points.
      • A change in the definition of quality improvement as an increase of 2 deciles instead of 3 will increase the number of CJR hospitals eligible for quality improvement points. A total of 1.8 points is possible: 1.0 total hip arthroplasty (THA)/total knee arthroplasty (TKA) Complications) and 0.8 Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey.
    2. There’s been an increase in composite quality score thresholds.
      • This change affects the discount factor used in the target calculation; Figure 1 reflects previous thresholds, while Figure 2 reflects the updated ones.
      • Higher thresholds will make it more challenging for participants to achieve a lower discount factor. It’s important to know that, with the new thresholds, there’s a risk that some participants may be ineligible for reconciliation payments. For example, if a participant currently only receives points for ranking in the 30th decile in HCAHPS, they will no longer meet the “Acceptable” score.
    3. The Pain Management survey has been removed from the HCAHPS total Linear Mean Roll-up score.
      • While this effect is minimal, it may move a participant up or down in the HCAHPS deciles, if they were on the border of a decile.
    4. The cap total composite quality score is now 20.


These changes are planned to be implemented with the initial reconciliation of PY2, and the subsequent reconciliation of PY1. For PY1 re-reconciliation, some participants may see a larger difference in payment between reconciliations that is not attributed to claim run-out.

As with most changes, there are pros and cons. For example, a participant may move into a higher quality category, making them eligible for a lower discount factor in turn receiving a lager reconciliation payment. But, should a participant move into a lower quality category, not only could they lose their eligibility for reconciliation payment in PY1—they would also have to pay CMS back everything they received in PY1 initial reconciliation, or make up the difference between reconciliation payments.

There’s a good chance most participants will be fine: CMS stated that 90% of participants will be in the Acceptable quality category or above, using the new methodology. Participants should review their quality scores under the first reconciliation of PY1 to be prepared for the potential changes to their financial performance moving forward.

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