Health Reform WK-EDGE 2016’s CJR model achieved significant savings, no quality loss
Tuesday, September 18, 2018

2016’s CJR model achieved significant savings, no quality loss

By Kathryn S. Beard, J.D.

In the first year that the Comprehensive Care for Joint Replacement (CJR) model was implemented, it achieved statistically significant reductions in total episode payments across different types of episodes, while the quality of care was maintained. The Lewin Group completed an evaluation report for performance year 1—2016—of the CJR model, an alternative payment model (APM) offered through the CMS Innovation Center. At the same time, there was no evidence that healthier patients were selected by participating hospitals (CMS Comprehensive Care for Joint Replacement Model: Performance Year 1 Evaluation Report, Prepared for CMS by The Lewin Group, August 2018).

The CJR model tests bundled payment and quality for lower extremity joint replacements based on each episode of care from initial hospitalization through recovery. In 2016, the program was mandatory for all acute-care hospitals paid under Medicare’s inpatient prospective payment system (IPPS) in certain markets. According to the report, participating hospitals responded to the model with advance planning, increased patient education regarding post-acute care settings, and coordination with other providers. As a result, total payments for lower extremity joint replacements across the entire episode of care decreased by $910 or more on average, without losing quality of care. The majority of the savings were driven by changes in use of post-acute care and corresponding reductions in institutional post-acute care payments. In addition to patient education, participating hospitals encouraged the use of less expensive settings for post-acute care, and used earlier discharge planning to set the patients’ expectations. These results, the report cautioned, do not account for reconciliation payments, and therefore are not total savings to the Medicare program.

The CJR model was the first episode-of-care payment model with mandatory hospital participation created by the Innovation Center, itself created by section 3021 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The model encouraged coordinated care between hospitals, physicians, home health agencies, skilled nursing facilities, and other providers with the goal of saving the Medicare program money while maintaining quality of care provided to patients. Participating hospitals had a financial stake in the outcome; performance-based payments were available to hospitals that reduced expenditures while meeting quality metrics, while those incurring high costs or lacking quality faced penalties (see Mandatory joint replacement payment model will hold hospitals accountable, November 24, 2015). Since the first year of the program, CMS has made a number of changes to the model, including making participatory voluntary (see Out with the old models, CJR model gets revamped, August 16, 2017; CMS cancels two bundled payment methods, makes CJR model voluntary for some hospitals, December 1, 2017) and giving hospitals in areas affected by hurricanes, wildfires, and other natural disasters the ability to decline to participate (see Flexibility in emergency events finalized for Comprehensive Joint Replacement participating hospitals, June 8, 2018).

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