CJR, a joint replacement bundled payments model, saved hospitals and Medicare in its first two years without impacting quality of care, a new report finds.
Hospitals participating in a joint replacement bundled payments model through Medicare saved $997 per episode during the first two performance periods, according to a second annual report on the model conducted by the Lewin Group.
The model, the Comprehensive Care for Joint Replacement, launched in April 2016. Run by the CMS Innovation Center, CJR is a mandatory bundled payments model that incentivizes nearly all hospitals in 67 geographic regions to improve care quality and total costs of care for lower extremity joint replacements using a single payment for all the services during a 90-day episode
However, if hospitals failed to lower costs for the episode below their benchmarks, Medicare penalizes the facilities. And since 2017, the hospitals have had to repay Medicare for a percentage of financial losses.
The report examined the first two performance periods of the model, which included LEJR episodes initiated on or after April 1, 2016, and that ended by December 31, 2017. During that time, Medicare potentially saved $17.4 million, the report showed.
Researchers could not say for sure whether Medicare saved during the two years considering savings estimates ranged from losses of up to $41.2 million to savings of up to $75.9 million during the CJR performance years. However, they did say the results show the CJR model “continues to be a promising approach to reducing payments for an episode of care that begins with LEJR surgery.”
“This evaluation indicates that a range of hospitals, with varying resources and circumstances, can and do respond to the incentives under a mandatory episode-based payment approach for LEJR episodes to reduce per episode payments while maintaining quality,” they added.
CJR is one of Medicare’s only mandatory alternative payment model. CMS rarely requires compulsory demonstration participation for providers, who largely oppose mandatory alternative payment models. The agency even went so far as to cancel mandatory bundled payment models for cardiac care before the models launched in 2018.
However, CMS has not taken mandatory models off the table. HHS Secretary Alex Azar said in a November 2018 speech that the agency has plans to roll out a mandatory bundled payment model around cancer care. HHS anticipates building on the lessons and successes of CJR moving forward, he added.
Using CJR as a model for future mandatory demonstrations may be fruitful, the Lewin Group indicated in its report. The nearly $1,000 in savings per episode translated to a 3.7 percent decrease from CJR baseline payments, researchers reported.
The savings identified in the second annual evaluation report represented an improvement from the first evaluation report. In that report, Lewin Group found that hospitals reduced spending on LEJR episodes by 3.3 percent during the first performance period.
Decreases in LEJR episode spending stemmed from less intensive post-acute care use, the report showed.
Specifically, compared to hospitals outside the scope of the bundled payment model, CJR hospitals discharged a relatively smaller proportion of patients to an inpatient rehabilitation facility and a relatively larger proportion of patients to a home health agency.
CJR patients with a skilled nursing facility stay also spent relatively fewer days in provider care compared to patients cared for by providers outside of the model.
“These shifts in utilization resulted in statistically significant decreases in IRF and SNF payments, which drove the decrease in average episode payments,” the report stated.
Furthermore, the report showed no negative impact on quality of care as measured by unplanned readmission rate, emergency department visits, and mortality. In fact, CJR and comparison patients reported similar improvements in functional status and pain levels from pre-hospitalization to the end of the 90-day episode.
Lewin Group also found no evidence that CJR led to a boost in LEJR episode volume or that hospitals postponed services until after an episode concluded to maximize savings. Although, the report did show some evidence that CJR patients undergoing elective surgery and without major complications or comorbidities were healthier during the intervention period, suggesting patient selection or induced demand. Researchers plan to investigate the finding in future reports.
Researchers also intend to examine how recent changes to CJR will impact hospital and Medicare savings.
When canceling compulsory cardiac care bundled payment models, CMS also scaled back the mandatory nature of CJR, reducing the number of metropolitan statistical areas required to participate from 67 in 2017 to 34 in 2018. Hospitals in the remaining MSAs could voluntarily participate.
CJR is an experiment for Medicare not only in terms of whether bundled payments can lower costs and/or improve quality but also whether mandatory models work. The agency currently has data on the impact a mandatory joint replacement bundled payment model has on hospitals and savings, and the agency will soon have information on how making the model voluntary affects savings.
Date: July 09, 2019
Source: Rev Cycle Intelligence