CJR Model- Medicare’s First Mandatory Bundle: SNF Therapy Impact

“We are embarking on one of the most important steps we will take to improve the quality and value of care for hundreds of thousands of Americans who have hip and knee replacements through Medicare every year. By focusing on episodes of care, rather than a piecemeal system, we provide hospitals and physicians an incentive to work together to deliver the best care possible to patients.”

Highlights from the Rule:

• Designed as a 5-year test, the CJR model begins April 1, 2016, and ends December 31, 2020. Participating hospitals bear the financial risk {or reward} of the episode of care, which include the procedure, inpatient stay, hospital care, post-acute care, and provider services for 90 days.
• The CJR model is available to those with Traditional Medicare Part A only – not Managed Medicare.
• Beneficiaries can pick their provider, though can’t opt out of inclusion if a provider is in the model
• Patients discharged from the hospital under these DRG’s qulaify:
  • MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complications or comorbidities or
  • MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complications or comorbidities
• Providers and suppliers will be paid for services under existing systems. {ie: SNF will be paid by RUGS, OP by Fee Schedule} At the end of the model performance year, Medicare will compare a hospital’s total episode spending (including postacute care and provider services) against its “target prices” for that hospital. Reward payments will be issued to the hospital if below “budget” and Repayments to Medicare if over “budget.”
• In order to receive a “Reward payment” the hospital has to meet set Quality Measure requirements for complication rates, consumer survey results and submission of additional reporting.
  • Hospital-level Risk Standardized Complication Rate Following Elective Primary Total Hip Arthroplasty and /or Total Knee Arthroplasty(NQF #1550)
  • Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure (NQF #0166)
  • Additional voluntary reporting
• Hospitals are permitted to partner with third-party providers and suppliers such as skilled nursing facilities, home health agencies, and outpatient therapy providers AND can share any “rewards” from Medicare, as well as the responsibility to “repay” Medicare for overspending.
• Hospitals and other providers already participating in CMS’s voluntary Bundled Payments for Care Improvement (BCPI) initiative programs 1, 2, or 4 are not required to participate in the CCJR. Read more.
• CMS will waive certain rules in order to test the CJR model, specifically:
  • Waiver of the 3 day inpatient hospital stay requirement for eligibility for a covered SNF stay (ie. SNF 3 day rule) ONLY if the SNF is rated 3 stars or higher on Nursing Home Compare (after year 1)
  • Waiver of the “incident to” rule for physician services to allow clinical staff of a physician to furnish home visits for non-HHA covered patients
  • Waiver of current law limitations on payment for telehealth services that will allow telehealth services to be furnished in the beneficiary’s home or place of residence. These waivers will not permit coverage and payment for telehealth services, such as physical therapy, that are not currently covered.

Impact on Therapy Provision in the SNF

Since participant hospitals will be financially accountable for the quality and cost of a CJR episode of care, as will any potential “partners” including SNF’s, therapy may feel the squeeze. The increased coordination of care among providers and the resulting financial relationships with SNF’s to support these efforts to improve quality and reduce costs will shift the care delivery as we now know it {and this was the point!}. Therapy services in the SNF setting are the primary reason for Medicare Part A coverage, and controlling therapy – controls cost. For example, the cost of providing RU level therapy services under the current system provides welcomed reimbursement to the SNF via the current PPS RUG system, though the cost of these services under CJR will be adding up on the hospital’s tab – and may potentially count against the hospital and SNF at some point down the road, depending on financial arrangements made.

Therapists across the country have voiced the desire to see a reimbursement system that was not centered around the total number of therapy minutes provided on the MDS {720 sound familiar?}. Value over volume has been the mantra…and now we may have a new mantra…less is more. Hopefully not a complete 180 degree turn in process! Medicare’s goal is carefully managed and coordinated services to achieve good outcomes. Let’s hope this is true… as therapists should be the only ones controlling the amount of therapy. The last thing therapists want is to transition from a system that rewards more therapy to a system that rewards less therapy. In the new system, less therapy would equal less money spent on care, which would then result in a potential “reward” to the hospital for being “under budget.” This has to be balanced with positive resident outcomes – which typically do not occur magically, thus requiring therapy intervention.

 “This model is about improving patient care. Patients want high quality, coordinated care — not just for a day, but for an entire episode of care. Hospitals, physicians, and other providers who work together can be successful and improve care for patients in this model, and CMS will help providers succeed,” said Patrick Conway, M.D., CMS’ principal deputy administrator and chief medical officer.

 In Summary