The final bundled payment model for hip and knee replacement surgeries “takes several positive steps” to support hospitals’ efforts to improve patient care, the AHA said earlier this week.

The Centers for Medicare & Medicaid Services (CMS) Nov. 16 released a final rule for a new payment model that will bundle payment to acute care hospitals for hip and knee replacement surgery. The Comprehensive Care for Joint Replacement or CJR model will start April 1, 2016, instead of the Jan. 1 date that CMS had earlier proposed. The program will still conclude Dec. 31, 2020.

The agency finalized its proposal that the hospital in which the joint replacement takes place be held accountable for the quality and costs of the entire episode of care from the time of the surgery through 90 days after discharge.

In a Nov. 16 statement, AHA President and CEO Rick Pollack said the rule “takes several positive steps to provide the support hospitals need to be successful” as they redesign the way care is delivered to increase value and better serve patients.

Although the final rule itself does not include waivers of any fraud and abuse laws, CMS and the Department of Health and Human Services Office of Inspector General (OIG) issued a joint statement waiving the Anti-kickback, physician self-referral, and civil monetary penalty laws with respect to certain financial arrangements and beneficiary incentives under the CJR model.

In addition, CMS will waive the skilled nursing facility three-day rule in certain instances; the “incident to” rule, which would allow CJR beneficiaries to receive post-discharge visits in their home or residence any time during the episode; and geographic and originating site requirements that limit telehealth payments.

The AHA is pleased CMS and OIG “recognized the importance of assuring that participating hospitals can pursue the program’s goals without running afoul of fraud and abuse laws,” Pollack said. “These legal protections are critical to hospitals’ ability to coordinate care among all caregivers.”

CMS will use a retrospective payment methodology with one-sided risk in the first year of the program – meaning no hospital will be penalized in year one – and two-sided risk in subsequent years.

While the agency did not limit the program to elective joint replacements only as urged by the AHA, it will risk stratify based on a beneficiary’s hip fracture status. CMS will tie each hospital’s level of incentive or penalty to a composite quality score based on three measures – elective hip/knee arthroplasty complications within 90 days, the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, and a voluntarily submitted patient-reported outcome measure.

The composite quality score will take into account significant performance improvements in the complications and HCAHPS measures. The CJR model will be in 67 geographic areas and most hospitals in those regions will be required to participate.

AHA members Nov. 17 received a Special Bulletin with further details. 

In 2014, more than 400,000 Medicare beneficiaries received a hip or knee replacement