Tuesday, 08 March 2016 20:37

Frequently Asked Questions about Comprehensive Care for Joint Replacement

Written by David Glaser, Esq.


On Nov. 24, 2015 the Centers for Medicare & Medicaid Services (CMS) published a final rule changing the reimbursement for certain lower-extremity joint replacement (LEJR) procedures. While the proposed rule referred to “CCJR,” for “comprehensive care for joint replacement,” CMS has elected to drop one “C,” instead referring to the program as “CJR.” Effective April 1, 2016, the rule changes the way almost all prospective payment hospitals in 67 metropolitan statistical areas are compensated for patients admitted with DRG 469 or 470. Under the program, Medicare will establish a target price for an episode of care that begins when the patient is admitted to the hospital and ends 90 days following the patient’s discharge. The hospital will be responsible for managing costs to meet the target price. If the costs exceed the target, the hospital must repay Medicare. If the costs are lower than the target, the hospital receives a payment from Medicare. The calculation of payments to and from the hospital is complicated, and there are caps on both the amount that the hospital can receive and the amount it can be required to repay.

The “episode of care” covers a wide range of services that are provided by other Medicare providers and suppliers, including physicians, therapists, skilled nursing facilities (SNFs), and more. This means that the hospitals will be at financial risk for the services provided by these other organizations (the rule refers to the other organizations as “collaborators.”) Hospitals are permitted, but not required, to negotiate contracts with other care providers (collaborators) so they share in the payments to and/or from Medicare. Direct Medicare payments to all providers and suppliers other than hospitals will be unchanged. For example, physicians will continue to receive fee-for-service payment under the Medicare fee schedule.     

A wide range of services are considered part of each episode. Specifically, the following types of services are included in the episode:

  1. Physicians’ services
  2. Inpatient hospital services (including hospital readmissions)
  3. Inpatient psychiatric facility services
  4. Long-term care hospital services
  5. Inpatient rehabilitation facility services
  6. SNF services
  7. Home health agency services
  8. Hospital outpatient services
  9. Outpatient therapy services
  10. Clinical laboratory services
  11. Durable medical equipment (DME)
  12. Part B drugs and biologicals
  13. Hospice services
  14. Per-beneficiary, per-month payments

Note that services in the list will be included in the episode even if they might seem unrelated to the joint replacement procedure. For example, mental health and chemical dependency services are included in the episode. When CMS calculates the target price, it will be using historical data that includes the same bundle of services. However, it is still true that when determining whether a hospital meets the target price, it will examine the patient’s costs for services listed above, even if such services would strike most people as entirely unrelated to joint replacement.

Prev Next »

Last modified on Tuesday, 08 March 2016 21:45