Changes to CJR Bundles Finalized and Episodic Payment Models Cancelled

Members | December 06, 2017 | by Nicole Fallon

On November 30, 2017, CMS finalized its plan (final rule) to make changes to the Comprehensive Care for Joint Replacement (CJR) bundled payment model and permanently cancel the implementation of its Episodic Payment Models (EPMs) and Cardiac Rehabilitation Incentive Payment Model that were scheduled to begin January 1, 2018.

On November 30, 2017, CMS finalized its plan (final rule) to make changes to the Comprehensive Care for Joint Replacement (CJR) bundled payment model and permanently cancel the implementation of its Episodic Payment Models (EPMs) and Cardiac Rehabilitation Incentive Payment Model that were scheduled to begin January 1, 2018.

The CJR program previously required all IPPS hospitals in 67-designated metropolitan statistical areas (MSAs) around the country to participate. Beginning February 1, 2018, the CJR program will remain mandatory for currently participating hospitals in half of the MSAs. (The 34 mandatory MSAs are listed in Table 1 on page 46 of the final rule)   CMS chose to continue mandated participation by hospitals in those MSAs with the highest average wage-adjusted historic episodic cost for lower extremity joint replacements. One of their key assumptions in these areas have the greatest potential to reduce costs even though not all hospitals in these MSAs are high cost. Hospitals in the remaining 33 MSAs and all low volume and rural hospitals will have an option to voluntarily continue their participation through a one-time election. Those hospitals in a voluntary MSA, as well as low-volume and rural hospitals in all 67 MSAs, must submit a voluntary participation election letter between January 1 – 31, 2018 in order to continue to participate in the CJR program.

Anecdotal evidence suggests that the CJR model had already begun impacting post-acute care referral and care delivery patterns in the affected MSAs, where some hospitals had sought cost reductions by bypassing skilled nursing facilities or insisting on shorter lengths of stay in SNFs.

By finalizing these rules, CMS is reinforcing its intent to move away from testing mandatory models and toward more voluntary participation by providers. There is still much speculation that the Center for Medicare and Medicaid Innovation will release a new voluntary bundled payment program by the end of 2017 or beginning of 2018 similar to the Bundled Payment for Care Improvement program. It is anticipated that the new program will present new opportunities for post-acute care providers to lead bundles.  In the final rule, CMS stated that "At this time, we believe that focusing on the development of different bundled payment models and engaging more providers in these models is the best way to drive health system change while minimizing provider burden and maintaining patient access to care."  The current voluntary Bundled Payment for Care Improvement initiative ends September 2018.  The report on the third year results for the Model 3 - which bundles care for Post Acute Care was published in October 2017.