CMS Finalizes Mandatory Joint Replacement Bundling and Makes Other Moves

By Brian Ellsworth, Director, Payment Transformation, Health Dimensions Group

November 19, 2015

The expression, “If you don’t like the weather…just wait five minutes, it will change,” has been widely attributed to Mark Twain talking about New England weather. He could have said the same thing about value-based purchasing, particularly bundling.

In what is light speed for Centers for Medicare & Medicaid Services (CMS), the July proposal for mandatory bundling of joint replacement episodes was finalized this week and will go into effect on April 1, 2016. In the last few weeks, CMS also finalized proposals for value-based purchasing for physicians and a nine-state mandatory demonstration for home health. CMS is continuing to put its money where its mouth is with respect to value-based payment transformation.

Joint replacement care was already undergoing an evolution as a result of the Bundled Payments for Care Improvement (BPCI) program, where it was by far the most popular diagnostic category selected by BPCI participants. This new mandatory joint replacement bundle will affect about a quarter of Medicare-funded joint replacements, turbocharging the pace and scale of change.

In its final rule, CMS retained many of the core aspects of the original joint replacement proposal: hospitals in selected regions are the mandatory risk-bearing entity, episodes are for 90 days, elective procedures and fractures are both included. CMS retained the same selection methodology for the mandatory regions, but ended up dropping eight regions because of updated data on participants in BPCI (no surprise to those of us dealing with BPCI data every day). So now there are 67 regions instead of 75. The program has the same name: “Comprehensive Care for Joint Replacement,” but has a new acronym: CJR.

In our white paper published last month, we noted many of the changes already being brought about by BPCI and expected to come about as a result of mandatory joint replacement bundling. Among them are a shift to outpatient care and home health as part of a greatly heightened sensitivity about where patients are going after hospital care and their outcomes once they get there. We also noted that some markets will reach a tipping point more quickly than others due to the interactive effect of these value-based programs.

Look for an update to our white paper about CJR and updated BPCI participation data in coming weeks. In the meantime, get ready for more value-based transformation!

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