CCJR Mandatory Bundles Finalized by CMS What You Need to Know

November 2015

This week CMS released the final details of the mandatory bundle program known as the Comprehensive Care for Joint Replacement (CCJR) initiative.  The CCJR requires approximately 800 hospitals in 67 areas across the country to participate in bundle payments for knee and hip replacement (DRG 469 and 470).  The program will begin on April 1, 2016.  Here are the main points of the program:

  • Initially, it’s good to be expensive. CMS will set the initial spending target for your hospital based on your previous experience with CMS.  If your organization has been getting sub-optimal results, your spending target in year one may be higher than your peers.
  • This is a retrospective bundle. During the year all payments will be made as usual.  But at the end of the year your total spend per episode will be compared with the target spend per episode set by CMS.
  • Final targets set by competition. Over the course of this five year initiative, your target will shift from being based on your past performance to be being based on the average performance of providers in your MSA.
  • Gainsharing is encouraged. CCJR allows providers to share up to 50 percent of the reward or penalty that comes from CMS.  This is meant as a way of garnering greater cooperation with your partners; be they physicians, SNFs, or another group.

How to prepare for CCJR:

  • Benchmark your costs against your peers. Because you will ultimately be measured against the average of other providers in your MSA you need to understand how your costs compare to theirs.  This will give you a sense of how much work needs to be done to avoid penalties and gain payments.
  • Evaluate your Partners. The CCJR looks at your total cost for the procedure going out 90 days post-discharge.  That means where your patients go after they leave your care can have a dramatic impact on how much you get paid.  CMS star ratings may be helpful in some cases, but if you are in an area where there are no exceptional post-acute care providers, then look for one who is willing to work with you to get better. Those who aren’t willing to work with you shouldn’t be your partner.
  • Determine you Gainsharing Strategy. The more you depend on physicians and post-acute care partners to manage clinical and financial risk, the more you should employ a gainsharing strategy.  In order to determine your optimal allocation to each of your partners you need to understand how much each contributes to quality and cost.
  • Focus on Reducing Clinical Risk. Know your patient population and use risk-adjustment to identify true adverse outcomes. Understanding the interaction between length of stay (LOS), readmissions, and post-discharge deaths will help your clinicians make better site of service selections.

MPA Healthcare Solutions is supporting hospitals like yours who are participating in the CCJR.  If you would like assistance for your program—or just have a question—please give us a call.  We’re here to help.

Donald Fry

Donald E. Fry, M.D. is Executive Vice President for Clinical Outcomes Management at MPA Healthcare Solutions, Adjunct Professor of Surgery at Northwestern University, and Professor Emeritus of Surgery at the University of New Mexico School of Medicine. At MPA Healthcare Solutions, Dr. Fry provides clinical leadership in analyzing and evaluating clinical performance, guiding quality improvement, and creating incentives for coordinated, cost-effective care.

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