Industry advisors suggest differing approaches for hospitals to optimize their CJR performance, depending on the efforts they have put into the bundled payment model thus far.

Aug. 22—Newly released Medicare data may not provide much help to the 800 hospitals subject to the first mandatory payment bundle, industry watchers say. But that doesn’t mean those hospitals should be sitting still.

The Centers for Medicare & Medicaid Services (CMS) in mid-August issued its first round of data for the roughly 800 hospitals subject to the Comprehensive Care for Joint Replacement (CJR) model, which started in April.

However, the data on Medicare joint replacement patients subject to the bundled payment may have disappointed some hospitals because it did not cover a full three months, according to industry advisers. That time frame is important because the model places hospitals at risk for all Medicare spending associated with hip and knee replacements and any charges within 90 days of discharge.

“It’s hard to draw hard and fast conclusions from this first data set because it is incomplete,” Jim Reilly, senior vice president of advisory services for Vizient, said in an interview.

However, the data for April, May, and part of June likely included some information covering full episodes that hospitals could examine.

“When you are talking about joints, there are plenty of episodes where all—or the overwhelming majority—of their care is finished in the first month after discharge,” Kelly Price, vice president and chief of healthcare data analytics at DataGen, a subsidiary of the Healthcare Association of New York State, said in an interview. “For the majority of episodes that originated in April, you got a pretty full picture.”

The early data show some positive cost-reduction signs among Vizient’s hospital clients, including slight reductions in post-acute facility utilization. The slow changes reflect the consultancy’s experience with other payment reform initiatives, where care redesign efforts generally take six to nine months to gain traction, Reilly said.

Hospitals face no penalties during the first year of the five-year pilot program, but poor performance would hurt their ability to obtain bonus payments of up to 5 percent of their target price for the care episode. As many as 60 percent of the hospitals in the CJR model could face penalties in later years, according to a March analysis.

Data Uses

Price said hospitals can use the limited data released so far—the next release is not expected until October or November—to ensure they are identifying every patient whose care is included the mandatory bundle and to confirm those patients were moved into cost-effective “care coordination pathways.”

The claims also identify the initial discharge destination of CJR patients. That information can help hospitals determine whether their post-discharge plans are working as intended, Price said. For example, hospitals could examine whether the percentage being discharged home with just home healthcare services matches the hospital’s target share.

“That’s where all of the savings are when you are comparing to target,” Price said, referring to the importance of post-acute care (PAC) under the CJR bundle.

The CJR model was expected to focus hospitals on evaluating their relationships with PAC facilities, noted a report from Leavitt Partners. Hospitals were expected to potentially consider partnerships, mergers, or a reduction of their PAC network.

Reilly is recommending that hospitals create preferred PAC networks, which generally means reducing the number of available facilities. Such networks also increase the likelihood that hospitals will get the needed “buy-in” from PAC providers to improve care.

Expanding and integrating high-value PAC networks to support the transition to population health management was cited as a key area of focus over the next three years by 95 percent of executives from 82 hospitals and health systems in a recent survey by Premier.

In subsequent CJR data feeds, hospitals will be able to start measuring their financial performance, including larger trends. But to undertake those future analyses, hospitals need to decide now whether the results will reflect chance or a strategy they actively put in place, Price said.

Some hospitals have been building joint replacement protocols unique to CJR in an effort to drive a reproducible cost and quality outcome, said Deirdre Baggot, PhD, principal at ECG.

Baggot, a former CMS expert reviewer for the Bundled Payments for Care Improvement Initiative, noted some hospitals have established PAC managers to better manage the hand-off from hospital to home.

“Hospitals and doctors are laser focused right now on avoiding SNF [skilled nursing facility] utilization as much as possible, as the feedback from doctors is that once you send a patient to SNF it’s almost like jail—it is very difficult to get them out of the SNF before the benefits have expired,” Baggot said in emailed comments. “Typical SNF average length of stay nationally appears more related to their benefit allowance (20-plus days) than it does to the degree of care a joint replacement patient needs.”

Another tool hospitals have used in CJR is a provider-level dashboard.

Baggot noted that many physicians have no idea about the cost of the post-acute care they prescribe.

“Once physicians see the cost of what they are ordering, they can determine whether the cost justifies the relative value provided,” Baggot said. “In most cases it doesn’t, and that’s where we see physicians looking for alternatives to high-cost drugs, supplies, and post-acute providers.”

Overall Response

Price described hospitals’ response to CJR so far as “a very mixed bag.” Some hospitals have successfully engaged with their senior leadership to develop a CJR strategy, establish a PAC network, and establish discharge and follow-up plans.

“There are others who are just trying to get their arms around the program and may not even have the attention of their senior leadership yet,” Price said. “You could use this safe period to show them why they should be paying attention and giving you those resources while you are not yet financially at risk.”

Hospitals not highly engaged in the CJR pilot should at least be using the CMS data to ensure they are identifying CJR patients and providing them with a required beneficiary notification, Price said.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C. office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Monday, August 22, 2016