Hip and knee replacements are a very common surgery for Medicare beneficiaries. In 2013, Medicare paid more than $7 billion in hospitalization costs alone for more than 400,000 beneficiaries’ knee and hip replacements. While incentives for hospitals to avoid post-surgery readmissions or extended rehabilitation resulting from complications exist, the quality and cost of care for these hip and knee replacement surgeries still vary widely among providers.
To address this variability in cost and quality, Centers for Medicare & Medicaid Services (CMS) has proposed the ; the first mandatory bundled payment model in the U.S. The five-year program begins on January 1, 2016 and hospitals in 75 selected Metropolitan Statistical Areas (MSAs) are required to take responsibility for quality and total spending over a 90-day period for elective and urgent joint replacement procedures. CMS expects to save more than $175 million over the course of the five-year program.
The goal of this program is to encourage hospitals, physicians, and post-acute care providers to work together to achieve the Institute for Healthcare Improvement (: better quality, decreased cost, and improved patient satisfaction across an episode of care. While the CCJR model is similar to the current CMMI Bundled Payments for Care Improvement (BPCI) demonstration, there are key differences in the proposed CMS rule.
First, the proposed CCJR Model will hold participant hospitals financially accountable for the quality and cost of a CCJR episode of care for Medicare beneficiaries. Second, a target price will be set for each hospital prior to the start of each performance period. Depending on the participant hospital’s quality and episode cost performance, the hospital may be financially rewarded or penalized by Medicare. Finally unlike the CMMI BPCI program, in which a hospital succeeds based on its ability to reduce the cost of an episode from historical levels, success under the CCJR program relies on a health system’s ability to become and remain an efficient provider of joint replacement episodes in a region.
To be prepared to succeed under the new CCJR model, organizations must undertake an evaluation of their current capabilities and practice patterns and identify the gaps they need to address to manage and coordinate care effectively across the targeted joint replacement episodes.
Truven Health experts suggest that CCJR participant hospitals evaluate their approach from three perspectives:
1. Quantitatively, by examining financial risk and opportunity
a. Analyze historical utilization and spending trends
b. Compare a hospital’s historical utilization against regional benchmarks
c. Trend forward historic results using current internal data
d. Forecast financial win-loss
2. Qualitatively, by examining clinical and operational capabilities
a. Orthopedic service line structure and leadership
b. Physician alignment
c. Care coordination and management capabilities
d. Post-acute provider network
e. Information and analytic capabilities
3. Comprehensively, by prioritizing the most critical activities and investments a hospital should undertake for both short and long-term success under the CCJR program
For more information about how Truven Health can help you prepare for your CCJR participation, please call 1.800.525., option 4 or email us at [email protected].
Senior Consulting Manager