Blog | Bundled Payment

CMS is curtailing voluntary participation in the Comprehensive Care for Joint Replacement bundled payment model

Blog | Bundled Payment

CMS is curtailing voluntary participation in the Comprehensive Care for Joint Replacement bundled payment model

  • Among various changes to the Comprehensive Care for Joint Replacement bundled payment model, CMS is removing the option to participate on a voluntary basis.
  • Participation will be restricted to hospitals that have been required to take part since the model’s inception.
  • The model is expanding to cover joint-replacement procedures performed in outpatient settings.

CMS has made updates to the Comprehensive Care for Joint Replacement (CJR) model, a bundled payment program for healthcare providers in designated markets.

One notable change represents an approach endorsed by some healthcare policymakers to limit voluntary participation in value-based payment (VBP) models. Hospitals that participated in CJR on a voluntary basis over the last three years will be excluded after Sept. 30, 2021, according to a new final rule.

That group includes:

  • Rural and low-volume hospitals in the 34 markets in which participation is mandatory for larger hospitals
  • Hospitals in 33 other markets in which participation originally was mandatory but became voluntary starting in 2018, the third year of the model

Some industry experts have argued that because of selection bias, allowing voluntary participation restricts the impact of VBP models. CMS echoed that point in the final rule, stating, “Hospitals that are ready and able to participate and keep episode spending under the target price would likely select to continue in the model while hospitals not able to keep episode spending under their target price would likely not participate.

“This conclusion is further supported given that, measured based on reconciliation payments, most opt-in hospitals financially benefited from participation in the CJR model in the first two performance years, which likely influenced their decision to continue participation in PY3 through PY5 of the model.”

The change would remove 139 hospitals from participation in CJR, leaving 330 to continue on a mandatory basis.

Of the hospitals that will be excluded, CMS wrote, 40 are enrolled in the voluntary Bundled Payments for Care Improvement Advanced model and subsequently can choose to participate in joint-replacement episodes within that model. However, no additional application periods for BPCI Advanced are currently planned.

“For hospitals who are unable to participate in either the CJR model or BPCI Advanced model, CMS is regularly reviewing opportunities for model development in the future and will alert hospitals of any opportunities that become available,” the agency wrote in the published rule.

Expanding to outpatient settings

Another key change to CJR is the inclusion of total hip arthroplasty and total knee arthroplasty performed in hospital outpatient departments. That modification stems from changes to the inpatient-only (IPO) procedure list, CMS stated.

In the 2021 rule for the Outpatient Prospective Payment System, CMS removed 300 primarily musculoskeletal-related services from the IPO list in anticipation of phasing out the list altogether by 2024.

If the pertinent hip and knee procedures had continued to be restricted to inpatient settings as part of the CJR model, CMS wrote, hospitals would have had a “financial incentive to perform a proportion of these procedures in a more expensive inpatient setting than would otherwise be medically necessary, thereby increasing costs to the Medicare program.” In addition, comparisons of CJR participants with nonparticipants would be skewed if only the former group had incentives to perform those procedures in the inpatient setting.

CMS will incorporate a risk-adjustment methodology in the CJR model to establish incentives for clinicians to appropriately choose between the inpatient and outpatient setting for applicable procedures.

Additional updates in store

To provide time to test the modifications, CMS has extended CJR for three years, through 2024, which will be the eighth year since the model was launched.

The update also includes various technical changes that primarily affect target-price calculations and the payment reconciliation process. The update “revises the episode definition, payment methodology and makes other modifications to the model to adapt the CJR model to changes in practice and fee-for-service payment occurring over the past several years,” CMS wrote.

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (nhut@hfma.org).

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