80 FR 41198 - Medicare Program; Comprehensive Care for Joint Replacement Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint Replacement Services
DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services
Federal Register Volume 80, Issue 134 (July 14, 2015)
Page Range
41198-41316
FR Document
2015-17190
This proposed rule proposes to implement a new Medicare Part A and B payment model under section 1115A of the Social Security Act, called the Comprehensive Care for Joint Replacement (CCJR) model, in which acute care hospitals in certain selected geographic areas will receive retrospective bundled payments for episodes of care for lower extremity joint replacement or reattachment of a lower extremity. All related care within 90 days of hospital discharge from the joint replacement procedures will be included in the episode of care. We believe this model will further our goals in improving the efficiency and quality of care for Medicare beneficiaries for these common medical procedures.
Federal Register, Volume 80 Issue 134 (Tuesday, July 14, 2015)
[Federal Register Volume 80, Number 134 (Tuesday, July 14, 2015)]
[Proposed Rules]
[Pages 41198-41316]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-17190]
[[Page 41197]]
Vol. 80
Tuesday,
No. 134
July 14, 2015
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 510
Medicare Program; Comprehensive Care for Joint Replacement Payment
Model for Acute Care Hospitals Furnishing Lower Extremity Joint
Replacement Services; Proposed Rule
Federal Register / Vol. 80 , No. 134 / Tuesday, July 14, 2015 /
Proposed Rules
[[Page 41198]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 510
[CMS-5516-P]
RIN 0938-AS64
Medicare Program; Comprehensive Care for Joint Replacement
Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint
Replacement Services
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule proposes to implement a new Medicare Part A
and B payment model under section 1115A of the Social Security Act,
called the Comprehensive Care for Joint Replacement (CCJR) model, in
which acute care hospitals in certain selected geographic areas will
receive retrospective bundled payments for episodes of care for lower
extremity joint replacement or reattachment of a lower extremity. All
related care within 90 days of hospital discharge from the joint
replacement procedures will be included in the episode of care. We
believe this model will further our goals in improving the efficiency
and quality of care for Medicare beneficiaries for these common medical
procedures.
DATES: Comment period: To be assured consideration, comments on this
proposed rule must be received at one of the addresses provided in the
ADDRESSES section no later than 5 p.m. EDT on September 8, 2015.
ADDRESSES: In commenting, please refer to file code CMS-5516-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to http://www.regulations.gov.
Follow the instructions under the ``submit a comment'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-5516-P, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-5516-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Room 445-G, Hubert H. Humphrey Building, 200
Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal Government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call the telephone number (410) 786-7195 in advance to schedule
your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Claire Schreiber, [email protected], 410-786-8939
Gabriel Scott, [email protected], 410-786-3928
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection, generally beginning approximately 3 weeks after publication
of the rule, at the headquarters of the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Baltimore, MD 21244, on Monday
through Friday of each week from 8:30 a.m. to 4:00 p.m. EDT. To
schedule an appointment to view public comments, phone 1-800-743-3951.
Electronic Access
This Federal Register document is also available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the internet at http://www.thefederalregister.org/fdsys/.
Alphabetical List of Acronyms
Because of the many terms to which we refer by acronym,
abbreviation, or short form in this proposed rule, we are listing the
acronyms, abbreviations and short forms used and their corresponding
terms in alphabetical order.
[micro]SA Micropolitan Statistical Area
ACO Accountable Care Organization
ASPE Assistant Secretary for Planning and Evaluation
BPCI Bundled Payments for Care Improvement
CBSA Core-Based Statistical Area
CMS Centers for Medicare & Medicaid Services
CPT Current Procedural Terminology
CCJR Comprehensive Care for Joint Replacement
CSA Combined Statistical Area
DME Durable Medical Equipment
FFS Fee-for-service
HCAHPS Hospital Consumer Assessment of Healthcare Providers and
Systems
HHA Home health agency
HOPD Hospital outpatient department
HHPPS Home Health Prospective Payment System
HIQR Hospital Inpatient Quality Reporting
HRRP Hospital Readmissions Reductions Program
HRR Hospital Referral Region
HVBP Hospital Value Based Purchasing Program
ICD-9-CM International Classification of Diseases, 9th Revision,
Clinical Modification
IPPS Inpatient Prospective Payment System
IPF Inpatient psychiatric facility
IRF Inpatient rehabilitation facility
LEJR Lower extremity joint replacement
LOS Length of stay
LTCH Long term care hospital
LUPA Low Utilization Payment Adjustment
[[Page 41199]]
MAC Medicare Administrative Contractor
MCC Major complications or comorbidities
MSA Metropolitan Statistical Area
MS-DRG Medical Severity Diagnosis-Related Group
MP Malpractice
NPP Nonphysician Practitioner
NPRA Net Payment Reconciliation Amount
OPPS Outpatient Prospective Payment System
PAC Post-acute care
SNF Skilled nursing facility
THA Total hip arthroplasty
TKA Total knee arthroplasty
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
1. Model Overview: LEJR Episodes of Care
2. Model Scope
3. Payment
4. Similar Previous and Concurrent Models
5. Overlap With Ongoing CMS Efforts
6. Quality Measures and Reporting Requirements
7. Data Sharing Process
8. Beneficiary Protections
C. Summary of Economic Effects
II. Background
III. Provisions of the Proposed Rule
A. Proposed Definition of the Episode Initiator and Selected
Geographic Areas
1. Background
2. Proposed Definition of Episode Initiator
3. Financial Responsibility for the Episode of Care
4. Proposed Geographic Unit of Selection and Exclusion of
Selected Hospitals
a. Overview and Options for Geographic Area Selection
b. MSA Selection Methodology
(1) Exclusion of Certain MSAs
(2) Proposed Selection Strata
(a) MSA Average Wage-adjusted Historic LEJR Episode Payments
(b) MSA Population Size
(c) Analysis of Strata
(3) Factors Considered but Not Used in Creating Proposed Strata
(4) Sample Size Calculations and the Number of Selected MSAs
(5) Method of Selecting MSAs
B. Episode Definition for the Comprehensive Care for Joint
Replacement (CCJR) Model
1. Background
2. Clinical Dimension of Episodes of Care
a. Definition of the Clinical Conditions Included in the Episode
b. Definition of Related Services Included in the Episode
3. Duration of Episodes of Care
a. Beginning the Episode and Beneficiary Care Inclusion Criteria
b. Middle of the Episode
c. End of the Episode
C. Proposed Methodology for Setting Episode Prices and Paying
Model Participants Under the CCJR Model
1. Background
2. Performance Years, Retrospective Episode Payment, and Two-
Sided Risk Model
a. Performance Period
b. Proposed Retrospective Payment Methodology
c. Proposed Two-Sided Risk Model
3. Adjustments to Payments Included in Episode
a. Proposed Treatment of Special Payment Provisions Under
Existing Medicare Payment Systems
b. Proposed Treatment of Payment for Services That Extend Beyond
the Episode
c. Proposed Pricing Adjustment for High Payment Episodes
4. Proposed Episode Price Setting Methodology
a. Overview
b. Proposed Pricing Features
(1) Different Target Prices for Episodes Anchored by MS-DRG 469
vs. MS-DRG 470
(2) Three Years of Historical Data
(3) Proposed Trending of Historical Data to the Most Recent Year
of the Three
(4) Update Historical Episode Payments for Ongoing Payment
System Updates
(a) Proposed Inpatient Acute Services Update Factor
(b) Proposed Physician Services Update Factor
(c) Proposed IRF Services Update Factor
(d) Proposed SNF Services Update Factor
(e) Proposed HHA Services Update Factor
(f) Proposed Other Services Update Factor
(5) Blend Hospital-Specific and Regional Historical Data
(6) Define Regions as U.S. Census Divisions
(7) Normalize for Provider-Specific Wage Adjustment Variations
(8) Proposed Combination of CCJR Episodes Anchored by MS-DRGs
469 and 470
(9) Discount Factor
c. Proposed Approach To Combine Pricing Features
5. Proposed Use of Quality Performance in the Payment
Methodology
a. Background
b. Proposed Implementation of Quality Measures for
Reconciliation Payment Eligibility
(1) General Selection of Proposed Quality Measures
(2) Proposal To Adjust the Payment Methodology for Voluntary
Submission of Data for Patient-Reported Outcome Measure
(3) Measure Risk-Adjustment and Calculations
(4) Applicable Time Period
(5) Criteria for Applicable Hospitals and Performance Scoring
(a) Identification of Applicable Hospitals for the CCJR Model
(b) Methodology to Determine Performance on the Quality Measures
(c) Proposed Methodology To Link Quality and Payment
(i) Background
(ii) Alternatives Considered To Link Quality and Payment
(iii) Proposal To Link Quality and Payment through Thresholds
for Reconciliation Payment Eligibility
6. Proposed Process for Reconciliation
a. Net Payment Reconciliation Amount
b. Payment Reconciliation
7. Proposed Adjustments for Overlaps With Other Innovation
Center Models and CMS Programs
a. Overview
b. CCJR Beneficiary Overlap With BPCI Episodes
c. Accounting for CCJR Reconciliation Payments and Recoupments
in Other Models and Programs
d. Accounting for Per Beneficiary Per Month (PBPM) Payments in
the Episode Definition
e. Accounting for Overlap With Shared Savings Programs and Total
Cost of Care Models
8. Proposals To Limit or Adjust Hospital Financial
Responsibility
a. Overview
b. Proposed Limit on Raw NPRA Contribution to Repayment Amounts
and Reconciliation Payments
(1) Proposed Limit on Raw NPRA Contribution to Repayment Amounts
(2) Proposed Limit on Raw NPRA Contribution to Reconciliation
Payments
c. Proposed Policies for Certain Hospitals to Further Limit
Repayment Responsibility
d. Proposed Hospital Responsibility for Increased Post-Episode
Payments
9. Proposed Appeal Procedures for Reconciliation
a. Payment Processes
b. Calculation Error
c. Dispute Resolution
(1) Limitations on Review
(2) Matters Subject to Dispute Resolution.
(3) Dispute Resolution Process.
10. Proposed Financial Arrangements, Beneficiary Incentives, and
Proposed Program Rule Waivers and Amendments
a. Financial Arrangements and Beneficiary Incentives
(1) Financial Arrangements Permitted Under the CCJR Model
(a) CCJR Sharing Arrangement Requirements.
(b) Participation Agreements Requirements.
(c) Gainsharing Payment and Alignment Payment Conditions and
Restrictions.
(d) Documentation and Maintenance of Records
(2) Beneficiary Incentives Permitted Under the CCJR Model
(3) Compliance with Fraud and Abuse Laws
11. Proposed Waivers of Medicare Program Rules
a. Overview
b. Post-Discharge Home Visits
c. Billing and Payment for Telehealth Services
d. SNF 3-Day Rule
e. Waivers of Medicare Program Rules To Allow Reconciliation
Payment or Recoupment Actions Resulting From the Net Payment
Reconciliation Amount12. Proposed Enforcement Mechanisms
D. Quality Measures and Display of Quality Metrics Used in the
CCJR Model
1. Background
a. Purpose of Quality Measures in the CCJR Model
b. Public Display of Quality Measures in the CCJR Model
2. Proposed Quality Measures for Performance Year 1 (CY 2016)
and Subsequent Years
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a. Hospital-Level Risk-Standardized Complication Rate (RSCR)
Following Elective Primary Total Hip Arthroplasty (THA) and/or Total
Knee Arthroplasty (TKA) (NQF #1550)
(1) Background
(2) Data Sources
(3) Cohort
(4) Inclusion and Exclusion Criteria
(5) Risk-Adjustment
(6) Calculating the Risk-Standardized Complication Rate and
Performance Period
b. Hospital-Level 30-day, All-Cause Risk-Standardized
Readmission Rate (RSRR) Following Elective Primary Total Hip
Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1551)
(1) Background
(2) Data Sources
(3) Cohort
(4) Inclusion and Exclusion Criteria
(5) Risk-Adjustment
(6) Calculating the Risk-Standardized Readmission Rate and
Performance Period
c. Hospital Consumer Assessment of Healthcare Providers and
Systems (HCAHPS) Survey
(1) Background
(2) Data Sources
(3) Cohort
(4) Inclusion and Exclusion Criteria
(5) Case-Mix-Adjustment
(6) HCAHPS Scoring
(7) Performance period
d. Applicable Time Period
3. Possible New Outcomes for Future Measures
a. Hospital-Level Performance Measure(s) of Patient-Reported
Outcomes Following Elective Primary Total Hip and/or Total Knee
Arthroplasty
(1) Background
(2) Data Sources
(3) Cohort
(4) Inclusion and Exclusion Criteria
(5) Outcome
(6) Risk-Adjustment (if Applicable)
(7) Calculating the Risk-Standardized Rate
(8) Performance Period
(9) Requirements for Successful Submission of THA/TKA Voluntary
Data
b. Measure that Captures Shared Decision-Making Related to
Elective Primary Total Hip and/or Total Knee Arthroplasty
c. Future Measures Around Care Planning
d. Future Considerations for Use of Electronic Health Records
4. Form, Manner and Timing of Quality Measure Data Submission
5. Proposed Display of Quality Measures and Availability of
Information for the Public From the CCJR Model
E. Data Sharing
1. Overview
2. Beneficiary Claims Data
3. Aggregate Regional Data
4. Timing and Period of Baseline Data
5. Frequency and Period of Claims Data Updates for Sharing
Beneficiary-Identifiable Claims Data During the Performance Period
6. Legal Permission to Share Beneficiary-Identifiable Data
F. Monitoring and Beneficiary Protection
1. Introduction and Summary
2. Beneficiary Choice and Beneficiary Notification
3. Monitoring for Access to Care
4. Monitoring for Quality of Care
5. Monitoring for Delayed Care
G. Coordination With Other Agencies
IV. Evaluation Approach
A. Background
B. Design and Evaluation Methods
C. Data Collection Methods
D. Key Evaluation Research Questions
E. Evaluation Period and Anticipated Reports
V. Collection of Information Requirements
VI. Response to Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
1. Overall Magnitude of the Model and its Effects on the Market
2. Effects on the Medicare Program
a. Assumptions and Uncertainties
b. Analyses
c. Further Consideration
3. Effects on Beneficiaries
4. Effects on Small Entities
5. Effects on Small Rural Hospitals
6. Unfunded Mandates
D. Alternatives
E. Accounting Statement
F. Conclusion
Regulations Text
I. Executive Summary
A. Purpose
The purpose of this proposed rule is to propose the creation and
testing of a new payment model called the Comprehensive Care for Joint
Replacement (CCJR) Model under the authority of the Center for Medicare
and Medicaid Innovation (Innovation Center or CMMI). Section 1115A of
the Social Security Act (the Act) authorizes the Innovation Center to
test innovative payment and service delivery models to reduce program
expenditures while preserving or enhancing the quality of care
furnished to Medicare, Medicaid, and Children's Health Insurance
Program beneficiaries. The intent of the CCJR model is to promote
quality and financial accountability for episodes of care surrounding a
lower-extremity joint replacement (LEJR) or reattachment of a lower
extremity procedure.\1\ CCJR will test whether bundled payments to
acute care hospitals for LEJR episodes of care will reduce Medicare
expenditures while preserving or enhancing the quality of care for
Medicare beneficiaries. We anticipate the CCJR model being proposed
would benefit Medicare beneficiaries by improving the coordination and
transition of care, improving the coordination of items and services
paid for through Medicare Fee-For-Service (FFS), encouraging more
provider investment in infrastructure and redesigned care processes for
higher quality and more efficient service delivery, and incentivizing
higher value care across the inpatient and post-acute care spectrum
spanning the episode of care. We propose to test CCJR for a 5 year
performance period, beginning January 1, 2016, and ending December 31,
2020. Under FFS, Medicare makes separate payments to providers and
suppliers for the items and services furnished to a beneficiary over
the course of treatment (an episode of care). With the amount of
payments dependent on the volume of services delivered, providers may
not have incentives to invest in quality improvement and care
coordination activities. As a result, care may be fragmented,
unnecessary, or duplicative.
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\1\ In this proposed rule, we use the term LEJR to refer to all
procedures within the Medicare Severity-Diagnosis Related Groups
(MS-DRGs) we propose to select for the model, including reattachment
of a lower extremity, as described in section III.B. of this
proposed rule.
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We have previously used our statutory authority under section 1115A
of the Act to test bundled payment models such as the Bundled Payments
for Care Improvement (BPCI) initiative. Bundled payments for multiple
services in an episode of care hold participating organizations
financially accountable for an episode of care. They also allow
participants to receive payment in part based on the reduction in
expenditures for Medicare arising from their care redesign efforts.
We believe the CCJR model being proposed would further the mission
of the Innovation Center and the Secretary's goal of increasingly
paying for value and outcomes, rather than for volume,\2\ because it
would promote the alignment of financial and other incentives for all
health care providers caring for a beneficiary during an LEJR episode.
In the proposed CCJR model, the acute care hospital that is the site of
surgery would be held accountable for spending during the episode of
care. Participant hospitals would be afforded the opportunity to earn
performance-based payments by appropriately reducing expenditures and
meeting certain quality metrics. They would also gain access to data
and educational resources to better understand post-acute care and
associated spending. Payment approaches that reward providers that
assume financial and performance accountability for a particular
episode of care create
[[Page 41201]]
incentives for the implementation and coordination of care redesign
between hospitals and other providers.
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\2\ Sylvia Mathews Burwell, HHS Secretary, Progress Towards
Achieving Better Care, Smarter Spending, Healthier People, http://www.hhs.gov/blog/2015/01/26/progress-towards-better-care-smarter-spending-healthier-people.html (Jan 26, 2015).
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The proposed model would require the participation of hospitals in
multiple geographic areas that might not otherwise participate in the
testing of bundled payments for episodes of care for LEJR procedures.
Other episode-based, bundled payment models being tested by Centers for
Medicare & Medicaid Services (CMS), such as the BPCI initiative, are
voluntary in nature. Interested participants must apply to such models
to participate. To date, we have not tested an episode payment model
with bundled payments in which providers are required to participate.
We recognize that realizing the full potential of new payment models
will require the engagement of an even broader set of providers than
have participated to date, providers who may only be reached when new
payment models are applied to an entire class of providers of a
service. As such, we are interested in testing and evaluating the
impact of a bundled payment approach for LEJR procedures in a variety
of circumstances, especially among those hospitals that may not
otherwise participate in such a test.
This proposed model would allow CMS to gain experience with making
bundled payments to hospitals who have a variety of historic
utilization patterns; different roles within their local markets;
various volumes of services; different levels of access to financial,
community, or other resources; and various levels of population and
health provider density including local variations in the availability
and use of different categories of post-acute care providers. We
believe that by requiring the participation of a large number of
hospitals with diverse characteristics, the proposed model would result
in a robust data set for evaluation of this bundled payment approach,
and would stimulate the rapid development of new evidence-based
knowledge. Testing the model in this manner would also allow us to
learn more about patterns of inefficient utilization of health care
services and how to incentivize the improvement of quality for common
LEJR procedure episodes. This learning potentially could inform future
Medicare payment policy.
Within this proposed rule we propose a model focused on episodes of
care for LEJR procedures. We chose LEJR episodes for the proposed model
because as discussed in depth in section III.C. of this proposed rule,
these are high-expenditure, high utilization procedures commonly
furnished to Medicare beneficiaries,\3\ where significant variation in
spending for procedures is currently observed. The high volume of
episodes and variation in spending for LEJR procedures create a
significant opportunity to test and evaluate the proposed model that
specifically focuses on a defined set of procedures. Moreover, there is
substantial regional variation in post-acute care referral patterns and
the intensity of post-acute care provided for LEJR patients, thus
resulting in significant variation in post-acute care expenditures
across LEJR episodes initiated at different hospitals. The proposed
model would enable hospitals to consider the most appropriate post-
acute care for their LEJR patients. The proposed model additionally
would offer hospitals the opportunity to better understand their own
processes with regard to LEJR, as well as the processes of post-acute
providers. Finally, while many LEJR procedures are planned, the
proposed model would provide a useful opportunity to identify
efficiencies both for when providers can plan for LEJR procedures and
for when the procedure must be performed urgently.
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\3\ For example, Total Hip Arthroplasty and Total Knee
Arthroplasty procedures are very high volume LEJR procedures that
together represent the largest payments for procedures under
Medicare. Suter L, Grady JL, Lin Z et al.: 2013 Measure Updates and
Specifications: Elective Primary Total Hip Arthroplasty (THA) And/Or
Total Knee Arthroplasty (TKA) All-Cause Unplanned 30-Day Risk-
Standardized Readmission Measure (Version 2.0). 2013. http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html; Bozic KJ,
Rubash HE, Sculco TP, Berry DJ., An analysis of Medicare payment
policy for total joint arthroplasty. J Arthroplasty. Sep 2008; 23(6
Suppl 1):133-138.
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We note that we seek public comment on the proposals contained in
this proposed rule, and also on any alternatives considered as well.
B. Summary of the Major Provisions
1. Model Overview: LEJR Episodes of Care
LEJR procedures are currently paid under the Inpatient Prospective
Payment System (IPPS) through one of two Medicare Severity-Diagnosis
Related Groups (MS-DRGs): MS-DRG 469 (Major joint replacement or
reattachment of lower extremity with Major Complications or
Comorbidities (MCC)) or MS-DRG 470 (Major joint replacement or
reattachment of lower extremity without MCC). Under the proposed model,
as described further in section III.B of this proposed rule, episodes
would begin with admission to an acute care hospital for an LEJR
procedure that is assigned to MS-DRG 469 or 470 upon beneficiary
discharge and paid under the IPPS and would end 90 days after the date
of discharge from the acute care hospital. This episode of care
definition offers operational simplicity for providers and CMS. The
episode would include the LEJR procedure, inpatient stay, and all
related care covered under Medicare Parts A and B within the 90 days
after discharge, including hospital care, post-acute care, and
physician services.
2. Model Scope
We propose that participant hospitals would be the episode
initiators and bear financial risk under the proposed CCJR model. In
comparison to other health care facilities, hospitals are more likely
to have resources that would allow them to appropriately coordinate and
manage care throughout the episode, and hospital staff members are
already involved in hospital discharge planning and post-acute care
recommendations for recovery, key dimensions of high quality and
efficient care for the episode. We propose to require all hospitals
paid under the IPPS and physically located in selected geographic areas
to participate in the CCJR model, with limited exceptions. Eligible
beneficiaries who receive care at these hospitals will automatically be
included in the model. We propose to select geographic areas through a
stratified random sampling methodology within strata based on the
following criteria: Historical wage adjusted episode payments and
population size. Our proposed geographic area selection process is
detailed further in section III.A of this proposed rule.
3. Payment
We propose to test the CCJR model for 5 performance years. During
these performance years we propose to continue paying hospitals and
other providers according to the usual Medicare FFS payment systems.
However, after the completion of a performance year, the Medicare
claims payments for services furnished to the beneficiary during the
episode, based on claims data, would be combined to calculate an actual
episode payment. The actual episode payment is defined as the sum of
related Medicare claims payments for items and services furnished to a
beneficiary during a CCJR episode. The actual episode payment would
then be reconciled against an established CCJR target price, with
consideration of additional payment adjustments based on quality
performance and post-episode spending. The amount of this calculation,
if
[[Page 41202]]
positive, would be paid to the participant hospital. This payment would
be called a reconciliation payment. If negative, we would require
repayment from the participant hospital. We propose Medicare would
require repayment of the difference between the actual episode payments
and the CCJR target price from a participant hospital if the CCJR
target price is exceeded.
We propose to make reconciliation payments to participant hospitals
that achieve quality outcomes and cost efficiencies relative to the
established CCJR target prices in all performance years of the model.
We also propose to phase in the requirement that participant hospitals
whose actual episode payments exceed the applicable CCJR target price
pay the difference back to Medicare beginning in performance year 2.
Under this proposal, Medicare would not require repayment from
hospitals for performance year 1 for actual episode payments that
exceed their target price in performance year 1.
We also propose to limit how much a hospital can gain or lose based
on its actual episode payments relative to target prices. We also
propose additional policies to further limit the risk of high payment
cases for all participant hospitals and for special categories of
participant hospitals as described in section III.C. of this proposed
rule.
4. Similar Previous and Concurrent Models
This proposed model is informed by other models and demonstrations
currently and previously conducted by CMS and would explore additional
ways to enhance coordination of care and improve the quality of
services through bundled payments.
We recently announced the Oncology Care Model (OCM), a new
voluntary payment model for physician practices administering
chemotherapy. Under OCM, practices will enter into payment arrangements
that include financial and performance accountability for episodes of
care surrounding chemotherapy administration to cancer patients. We
plan to coordinate with other payers to align with OCM in order to
facilitate enhanced services and care at participating practices. More
information on the OCM can be found on the Innovation Center's Web site
at: http://innovation.cms.gov/initiatives/Oncology-Care/.
Medicare tested innovative approaches to paying for orthopedic
services in the Medicare Acute Care Episode (ACE) demonstration, a
prior demonstration, and is currently testing additional approaches
under BPCI. Both of these models have also informed the design of the
CCJR model.
Under the authority of section 1866C of the Act, we conducted a 3-
year demonstration, the Medicare Acute Care Episode (ACE)
Demonstration. The demonstration used a prospective global payment for
a single episode of care as an alternative approach to payment for
service delivery under traditional Medicare FFS. The episode of care
was defined as a combination of Part A and Part B services furnished to
Medicare FFS beneficiaries during an inpatient hospital stay for any
one of a specified set of cardiac and orthopedic MS-DRGs. The MS-DRGs
tested included 469 and 470, those proposed for inclusion in the CCJR
model. The discounted bundled payments generated an average gross
savings to Medicare of $585 per episode for a total of $7.3 million
across all episodes (12,501 episodes) or 3.1 percent of the total
expected costs for these episodes. After accounting for increased post-
acute care costs that were observed at two sites, Medicare saved
approximately $4 million, or 1.72 percent of the total expected
Medicare spending. More information on the ACE Demonstration can be
found on the Innovation Center's Web site at: http://innovation.cms.gov/initiatives/ACE/.
We are currently testing the BPCI initiative. The BPCI initiative
is comprised of four related payment models, which link payments for
multiple services that Medicare beneficiaries receive during an episode
of care into a bundled payment. Under the initiative, entities enter
into payment arrangements with CMS that include financial and
performance accountability for episodes of care. Episodes of care under
the BPCI initiative begin with either--(1) an inpatient hospital stay
or (2) post-acute care services following a qualifying inpatient
hospital stay. The BPCI initiative is evaluating the effects of
episode-based payment approaches on patient experience of care,
outcomes, and cost of care for Medicare FFS beneficiaries. Each of the
four models tests LEJR episodes of care. While final evaluation results
for the models within the BPCI initiative are not yet available, we
believe that CMS' experiences with BPCI support the design of the CCJR
model. Under section 1115A(c) of the Act, the Secretary may, taking
into consideration an evaluation conducted under section 1115A(b)(4) of
the Act, ``through rulemaking, expand (including implementation on a
nationwide basis) the duration and the scope of a model that is being
tested under'' the Innovation Center's authority. CCJR is not an
expansion of BPCI, and BPCI may be expanded in the future. CMS
published a discussion item soliciting public comment on a potential
future expansion of one or more of the models within BPCI in the CY2016
IPPS rule, 80 FR 24414 through 24418. CCJR would not be not an
expansion or modification of BPCI; nor does it reflect comments
received in response to the NPRM for the 2016 IPPS Rule. CCJR is a
unique model that tests a broader, different group of hospitals than
BPCI. It is necessary to provide CMS with information about testing
bundled payments to hospitals that are required to participate in an
alternative payment model. For a discussion of why we are requiring
hospitals to participate in the CCJR model, see section III.A of this
proposed rule.
The CCJR model's design was informed to a large degree by our
experience with BPCI Model 2. BPCI's Model 2 is a voluntary episode
payment model in which a qualifying acute care hospitalization
initiates a 30, 60 or 90 day episode of care. The episode of care
includes the inpatient stay in an acute care hospital and all related
services covered under Medicare Parts A and B during the episode,
including post-acute care services. More information on BPCI Model 2
can be found on the Innovation Center's Web site at: http://innovation.cms.gov/initiatives/BPCI-Model-2/.
Further information of why elements of the OCM, the ACE
Demonstration, and BPCI Model 2 were incorporated into the design of
the CCJR model is discussed later in this proposed rule.
5. Overlap With Ongoing CMS Efforts
We propose to exclude from participation in CCJR certain hospitals
participating in the risk-bearing phase of BPCI Models 2 and 4 for LEJR
episodes, as well as acute care hospitals participating in BPCI Model
1. We propose not to exclude beneficiaries in CCJR model episodes from
being included in other Innovation Center models or CMS programs, such
as the Medicare Shared Savings Program, as detailed later in this
proposed rule. We propose to account for overlap, that is, where CCJR
beneficiaries are also included in other models and programs to ensure
the financial policies of CCJR are maintained and results and spending
reductions are attributed to the correct model or program.
6. Quality Measures and Reporting Requirements
We are proposing to adopt three hospital-level quality of care
measures for the CCJR model. Those measures
[[Page 41203]]
include a complication measure, readmission measure, and a patient
experience survey measure. We propose to use these measures to test the
success of the model in achieving its goals under section 1115A of the
Act and to monitor for beneficiary safety. We intend to publicly report
this information on the Hospital Compare Web site. Additionally, we are
proposing and requesting public feedback on possible voluntary
submission of data to support the development of a hospital-level
measure of patient-reported outcomes following an elective Primary
Total Hip (THA) or Total Knee Arthroplasty (TKA).
7. Data Sharing Process
We propose to share data with participant hospitals upon request
throughout the performance period of the CCJR model to the extent
permitted by the HIPAA Privacy Rule and other applicable law. We
propose to share upon request both raw claims-level data and claims
summary data by service line with participants. This approach would
allow participant hospitals without prior experience analyzing claims
to use summary data to receive useful information, while allowing those
participant hospitals who prefer raw claims-level data the opportunity
to analyze claims. We propose to provide hospitals with up to 3 years
of retrospective claims data upon request that will be used to develop
their target price, as described in section III.C of this proposed
rule. In accordance with the HIPAA Privacy Rule, we would limit the
content of this data set to the minimum data necessary for the
participant hospital to conduct quality assessment and improvement
activities and effectively coordinate care of its patient population.
8. Beneficiary Protections
Under the CCJR model, beneficiaries retain the right to obtain
health services from any individual or organization qualified to
participate in the Medicare program. Under the CCJR model, eligible
beneficiaries who receive services from a participant hospital would
not have the option to opt out of inclusion in the model. We propose to
require participant hospitals to supply beneficiaries with written
information regarding the design and implications of this model as well
as their rights under Medicare, including their right to use their
provider of choice. We will also make a robust effort to reach out to
beneficiaries and their advocates to help them understand the CCJR
model.
We also propose to use our existing authority, if necessary, to
audit participant hospitals if claims analysis indicates an
inappropriate change in delivered services. Beneficiary protections are
discussed in greater depth in section III.E. of this proposed rule.
9. Financial Arrangements and Program Policy Waivers
We propose to hold participant hospitals financially responsible
for CCJR LEJR episodes as participants in the model as discussed in
section III.C.10.a. of this proposed rule. Specifically, only these
hospital participants would be directly subject to the requirements of
this proposed rule for the CCJR model. Participant hospitals would be
responsible for ensuring that other providers and suppliers
collaborating with the hospital on LEJR episode care redesign are in
compliance with the terms and conditions of the model.
Several of the proposed Medicare program policy waivers outline the
conditions under which skilled nursing facilities (SNFs) and physicians
could furnish and bill for certain services furnished to CCJR
beneficiaries where current Medicare programs rules would not permit
such billing. We draw the attention of SNFs and physicians to these
proposals that are included in section III.C.10.b.(5). of this proposed
rule.
C. Summary of Economic Effects
As shown in our impact analysis, we expect the proposed model to
result in savings to Medicare of $153 million over the 5 years of the
model. More specifically, in performance year 1 of the model, we
estimate a Medicare cost of approximately $23 million, as we have
proposed that hospitals will not be subject to downside risk in the
first year of the model. As we introduce downside risk beginning in
performance year 2 of the model, we estimate Medicare savings of
approximately $29 million. In performance year 3 of the model, we
estimate Medicare savings of $43 million. In performance years 4 and 5
of the model, as we have proposed to move from target episode pricing
that is based on a hospital's experience to target pricing based on
regional experience, we estimate Medicare savings of $50 million and
$53 million, respectively.
Additionally, hospitals must meet or exceed specific thresholds on
performance on certain quality of care measures in order to be eligible
for a reconciliation payment and as the performance threshold increases
in performance years 4 through 5, we estimate additional savings. As a
result, we estimate the net savings to Medicare to be $153 million over
the 5 years of the model. We anticipate there would be a broader focus
on care coordination and quality improvement for LEJR episodes among
hospitals and other providers within the Medicare program that would
lead to both increased efficiency in the provision of care and improved
quality of the care provided to beneficiaries.
We note that under section 1115A(b)(3)(B) of the Act, the Secretary
is required to terminate or modify a model unless certain findings can
be made with respect to savings and quality after the model has begun.
If during the course of testing the model it is determined that
termination or modification is necessary, such actions would be
undertaken through rulemaking.
II. Background
This proposed rule proposes the implementation of a new innovative
health care payment model under the authority of section 1115A of the
Act. Under the model, called the CCJR model, acute care hospitals in
certain selected geographic areas will receive bundled payments for
episodes of care where the diagnosis at discharge includes a lower
extremity joint replacement or reattachment of a lower extremity that
was furnished by the hospital. We are proposing that the bundled
payment will be paid retrospectively through a reconciliation process;
hospitals and other providers and suppliers will continue to submit
claims and receive payment via the usual Medicare FFS payment systems.
All related care covered under Medicare Part A and Part B within 90
days after the date of hospital discharge from the joint replacement
procedure will be included in the episode of care. We believe this
model will further our goals of improving the efficiency and quality of
care for Medicare beneficiaries for these common medical procedures.
III. Provisions of the Proposed Rule
A. Proposed Definition of the Episode Initiator and Selected Geographic
Areas
1. Background
The CCJR model is different from BPCI because it would require
participation of all hospitals (with limited exceptions) throughout
selected geographic areas, which would result in a model that includes
varying hospital types. However, a discussion of BPCI is relevant
because its design informs and supports the proposed CCJR model. The
BPCI model is voluntary, and under that model we pay a bundled payment
for an episode of care only to entities that have
[[Page 41204]]
elected to participate in the model. We are interested in testing and
evaluating the impact of an episode payment approach for LEJRs in a
variety of other circumstances, including among those hospitals that
have not chosen to voluntarily participate because we have not tested
bundled payments for these hospitals previously. This would allow CMS
and participants to gain experience testing and evaluating episode-
based payment for LEJR procedures furnished by hospitals with a variety
of historic utilization patterns; roles within their local markets;
volume of services provided; access to financial, community, or other
resources; and population and health care provider density. Most
importantly, participation of hospitals in selected geographic areas
will allow CMS to test bundled payments without introducing selection
bias such as the selection bias inherent in the BPCI model due to self-
selected participation.
2. Proposed Definition of Episode Initiator
In BPCI Model 2, LEJR episode initiators are either acute care
hospitals where the LEJR procedure is performed or physician group
practices whose physician members are the admitting or operating
physician for the hospital stay. Thus, under BPCI, it is possible that
only some Medicare cases that could potentially be included in an LEJR
episode at a specific hospital are actually being tested in BPCI. For
example, if the hospital itself is not participating as an episode
initiator under BPCI, yet some physicians who admit patients to the
hospital are members of physician group practices participating in
BPCI, not all of the hospital's possible LEJR episodes are tested and
paid under BPCI.
Under the proposed CCJR model, as described further in section
III.B of this proposed rule, episodes would begin with admission to an
acute care hospital for an LEJR procedure that is paid under the IPPS
through Medical Severity Diagnosis-Related Group (MS-DRG) 469 (Major
joint replacement or reattachment of lower extremity with MCC) or 470
(Major joint replacement or reattachment of lower extremity without
MCC) and end 90 days after the date of discharge from the hospital. For
the CCJR model, we propose that hospitals would be the only episode
initiators. For purposes of CCJR, the term ``hospital'' means a
hospital as defined in section 1886(d)(1)(B) of the Act. This statutory
definition of hospital includes only acute care hospitals paid under
the IPPS. Under this proposal, all acute care hospitals in Maryland
would be excluded from CCJR. The state of Maryland entered into an
agreement with CMS, effective January 1, 2014, to participate in CMS'
new Maryland All-Payer Model. In order to implement the Maryland All-
Payer Model, CMS waived certain requirements of the Act, and the
corresponding implementing regulations, as set forth in the agreement
between CMS and Maryland. Specifically, under the Maryland All-Payer
Model, Maryland acute care hospitals are not paid under the IPPS or
OPPS but rather are paid under rates set by the state. Following the
model's performance period, Maryland will transition to a new model
that incorporates the full spectrum of care, not just hospital
services. As such, with respect to Maryland hospitals, CMS intends to
test and develop new payment and delivery approaches that can
incorporate non-hospital services in a manner that accounts for
Maryland's unique hospital rate setting system and permit Maryland to
develop its own strategy to incentivize higher quality and more
efficient care across clinical situations within and beyond hospitals,
including but not limited to LEJR episodes of care. We are proposing
that payments to Maryland hospitals would be excluded in the regional
pricing calculations as described in section III.C.4 of this proposed
rule. We seek comment on this proposal and whether there are potential
approaches for including Maryland acute care hospitals in CCJR. In
addition, we seek comment on whether Maryland hospitals should be
included in CCJR in the future upon any termination of the Maryland
All-Payer Model.
We propose to designate IPPS hospitals as the episode initiators to
ensure that all Medicare FFS LEJR services furnished by participant
hospitals in selected geographic areas to beneficiaries who do not meet
the exclusion criteria specified in section III.B.3 of this proposed
rule and are not BPCI episodes that we are proposing to exclude as
outlined in this section and also in section III.C.7 of this proposed
rule are included in the CCJR model. We are proposing certain
exceptions to the inclusion of hospitals in the CCJR Model, as
discussed in section III.C. of this proposed rule. Given that our
proposal to initiate the LEJR episode begins with an admission to a
hospital paid under the IPPS that results in a discharge assigned to
MS-DRG 469 or 470, we believe that utilizing the hospital as the
episode initiator is a straightforward approach for this model because
the hospital furnishes the LEJR procedure. In addition, we are
interested in testing a broad model in a number of hospitals under the
CCJR model in order to examine results from a more generalized payment
model. Thus, we believe it is important that, in a model where hospital
participation is not voluntary, all Medicare FFS LEJR episodes that
begin at the participant hospital in a selected geographic area are
included in the model for beneficiaries that do not meet the exclusion
criteria specified in section III.B.3 of this proposed rule and are not
BPCI episodes that we are proposing to exclude as outlined in this
section and also in section III.C.7 of this proposed rule. This is best
achieved if the hospital is the episode initiator. Finally, as
described in the following sections that present our proposed approach
to geographic area selection, this geographic area selection approach
relies upon our definition of hospitals as the entities that initiate
episodes. We seek comment on our proposal to define the episode
initiator as the hospital under CCJR.
3. Financial Responsibility for the Episode of Care
BPCI Model 2 participants that have entered into agreements with
CMS to bear financial responsibility for an episode of care include
acute care hospitals paid under the IPPS, health systems, physician-
hospital organizations, physician group practices, and non-provider
business entities that act as conveners by coordinating multiple health
care providers' participation in the model. Thus, our evaluation of
BPCI Model 2 will yield information about how results for LEJR episodes
may differ based on differences in which party bears financial
responsibility for the episode of care.
For the CCJR model, we propose to make hospitals financially
responsible for the episode of care for several reasons. We recognize
that ideally all of the providers involved in the continuum of care for
Medicare beneficiaries in a 90-day post-discharge LEJR episode would
work together to determine the best structure for managing the LEJR
episode, develop an efficient process that leads to high quality care,
track information across the episode about quality and Medicare
expenditures, and align financial incentives using a variety of
approaches, including gainsharing. However, because the proposed CCJR
model is testing a more generalizable model by including hospitals that
might not participate in a voluntary model and includes episodes
initiated at a wide variety of hospitals, we believe it is
[[Page 41205]]
most appropriate to identify a single type of provider to bear
financial responsibility for making repayment to CMS under the model.
Hospitals play a central role in coordinating episode-related care
and ensuring smooth transitions for beneficiaries undergoing LEJR
procedures. Moreover, the episode always begins with an acute care
hospital stay, IPPS payments for LEJRs comprise about 50 percent of
Medicare payments for a 90-day episode, and the beneficiary's recovery
from surgery begins during the hospital stay. Most hospitals already
have some infrastructure related to health information technology,
patient and family education, and care management and discharge
planning. This includes post-acute care (PAC) coordination
infrastructure and resources such as case managers, which hospitals can
build upon to achieve efficiencies under this episode payment model.
Many hospitals also have recently heightened their focus on aligning
their efforts with those of community providers to provide an improved
continuum of care due to the incentives under other CMS models and
programs, including Accountable Care Organization (ACO) initiatives
such as the Medicare Shared Savings Program (MSSP), and the Hospital
Readmissions Reduction Program (HRRP), establishing a base for
augmenting these efforts under the CCJR model.
In view of our proposal that hospitals be the episode initiators
under this model, we believe that hospitals are more likely than other
providers to have an adequate number of episode cases to justify an
investment in episode management for this model. We also believe that
hospitals are most likely to have access to resources that would allow
them to appropriately manage and coordinate care throughout the LEJR
episode. Finally, the hospital staff is already involved in discharge
planning and placement recommendations for Medicare beneficiaries, and
more efficient PAC service delivery provides substantial opportunities
for improving quality and reducing costs under CCJR.
We considered requiring treating physicians (orthopedic surgeons or
others) or their associated physician group practices, if applicable,
to be financially responsible for the episode of care under the CCJR
Model. We expect that every Medicare beneficiary discharged with a
diagnosis grouped under MS-DRG 469 or 470 would have an operating
physician and an admitting physician for the hospital stay. However,
the services of providers other than the hospital where the acute care
hospital stay for the LEJR procedure (hereinafter ``the anchor
hospitalization'') occurs would not necessarily be furnished in every
LEJR episode. For example, that physicians of different specialties
play varying roles in managing patients during an acute care
hospitalization for a surgical procedure and during the recovery
period, depending on the hospital and community practice patterns and
the clinical condition of the beneficiary and could not be assumed to
be included in every LEJR episode. This variability would make
requiring a particular physician or physician group practice to be
financially responsible for a given episode very challenging.
If we were to assign financial responsibility to the operating
physician, it is likely that there would be significant variation in
the number of relevant episodes that could be assigned to an individual
person. Where the physician was included in a physician group practice,
episodes could be aggregated to this group level but this would not be
possible for all cases and would likely still have low volume concerns.
We believe that the small sample sizes accruing to individual physician
and physician group practices would make systematic care redesign
inefficient and more burdensome, given that we are proposing to test
all episodes occurring at hospitals selected for participation for
beneficiaries that do not meet the exclusion criteria specified in
section III.B.3 of this proposed rule and are not BPCI episodes that we
are proposing to exclude as outlined in this section and also in
section III.C.7 of this proposed rule.
Finally, we note that although the BPCI initiative includes the
possibility of a physician group practice as a type of initiating
participant, the physician groups electing to participate in BPCI have
done so because their practice structure supports care redesign and
other infrastructure necessary to bear financial responsibility for
episodes and is not necessarily representative of the typical group
practice. In addition, most of the physician group practices in BPCI
are not bearing financial responsibility, but are participating in BPCI
as partners with convener organizations (discussed later in this
section), which enter into agreements with CMS, on behalf of health
care providers such as physician group practices, through which they
accept financial responsibility for the episode of care. The
infrastructure necessary to accept financial responsibility for
episodes is not present across all physician group practices, and thus
we do not believe it would be appropriate to designate physician group
practices to bear the financial responsibility for making repayments to
CMS under the proposed CCJR model. We seek comment on our proposal to
require the hospital to bear the financial responsibility for the
episodes of care under CCJR.
We are proposing that hospitals will bear the financial
responsibility for LEJR episodes of care under CCJR. However, because
there are LEJR episodes currently being tested in BPCI Model 1, 2, 3 or
4, we believe that participation in CCJR should not be required if it
would disrupt testing of LEJR episodes already underway in BPCI models.
Therefore, we are proposing that IPPS hospitals located in an area
selected for the model that are active Model 1 BPCI participant
hospitals as of July 1, 2015 or episode initiators for LEJR episodes in
the risk-bearing phase of Model 2 or 4 of BPCI as of July 1, 2015,
would be excluded from participating in CCJR during the time that their
qualifying episodes are included in one of the BPCI models. Likewise,
we are proposing that if the participant hospital is not an episode
initiator for LEJR episodes under BPCI Model 2, then LEJR episodes
initiated by other providers or suppliers under BPCI Model 2 or 3
(where the surgery takes place at the participant hospital) would be
excluded from CCJR. Otherwise qualifying LEJR episodes (that is, those
that are not part of a Model 3 BPCI LEJR episode or a Model 2 physician
group practice-initiated LEJR episode) at the participant hospital
would be included in CCJR.
While we propose that the participant hospital be financially
responsible for the episode of care under CCJR, we also believe that
effective care redesign for LEJR episodes requires meaningful
collaboration among acute care hospitals, PAC providers, physicians,
and other providers and suppliers within communities to achieve the
highest value care for Medicare beneficiaries. We believe it may be
essential for key providers to be aligned and engaged, financially and
otherwise, with the hospitals, with the potential to share financial
responsibility with those hospitals. We note that all relationships
between and among providers and suppliers must comply with all relevant
laws and regulations, including the fraud and abuse laws and all
Medicare payment and coverage requirements unless otherwise specified
further later in this section and in section III.C.10 of this proposed
rule. Depending on a hospital's current degree of clinical integration,
new and different contractual relationships among hospitals and other
health care
[[Page 41206]]
providers may be important, although not necessarily required, for CCJR
model success in a community. We acknowledge that financial incentives
for other providers may be important aspects of the model in order for
hospitals to partner with these providers and incentivize certain
strategies to improve episode efficiency.
In the BPCI initiative, participants have entered a variety of
relationships with entities above the hospital level. Some of these
relationships are ones where the financial risk is borne by the entity
other than the hospital, such as a parent organization (known as
awardee conveners) and others have managerial or other responsibility
relationships with other organizations (known as facilitator conveners)
but financial responsibility remains with the episode initiator . We
acknowledge the important role that conveners play in the BPCI
initiative with regard to providing infrastructure support to hospitals
and other entities initiating episodes in BPCI. The convener
relationship (where another entity assumes financial responsibility)
may take numerous forms, including contractual (such as a separate for-
profit company that agrees to take on a hospital's financial risk in
the hopes of achieving financial gain through better management of the
episodes) and through ownership (such as when risk is borne at a
corporate level within a hospital chain).
However, we are proposing that for the CCJR model, we would hold
only the participant hospitals financially responsible for the episode
of care. This is consistent with the goal of evaluating the impact of
bundled payment and care redesign across a broad spectrum of hospitals
with varying levels of infrastructure and experience in entering into
risk-based reimbursement arrangements. If conveners were included as
participants in CCJR, we may not gain the knowledge of how a variety of
hospitals can succeed in relationship with CMS in which they bear
financial risk for the episode of care. We acknowledge that CCJR
hospitals may wish to enter into relationships with other entities in
order to manage the episode of care or distribute risk. We do not
intend to restrict the ability of hospitals to enter into
administrative or risk sharing arrangements related to this model. We
refer readers to section III.C.10 of this proposed rule for further
discussion of model design elements that may outline financial
arrangements between participant hospitals and other providers and
suppliers.
4. Proposed Geographic Unit of Selection and Exclusion of Selected
Hospitals
In determining which hospitals to include in the CCJR model, we
considered whether the model should be limited to hospitals where a
high volume of LEJRs are performed, which would result in a more narrow
test on the effects of an episode-based payment, or whether to include
all hospitals in particular geographic areas, which would result in
testing the effects of an episode-based payment approach more broadly
across an accountable care community seeking to coordinate care
longitudinally across settings. Selecting certain hospitals where a
high volume of LEJRs are performed may allow for fewer hospitals to be
selected as model participants, but still result in a sufficient number
of CCJR episodes to evaluate the success of the model. However, there
would be more potential for behavioral changes that could include
patient shifting and steering between hospitals in a given geographic
area that could impact the test. Additionally, this approach would
provide less information on testing episode payments for LEJR
procedures across a wide variety of hospitals with different
characteristics. Selecting geographic areas and including all IPPS
hospitals in those areas not otherwise excluded due to BPCI overlap as
previously described and in section III.C.7 of this proposed rule as
model participants would help to minimize the risk of participant
hospitals shifting higher cost cases out of the CCJR model. Moreover,
in selecting geographic areas we could choose certain characteristics,
stratify geographic areas according to these characteristics, and
randomly select geographic areas from within each stratum. Such a
stratified random sampling method based on geographic area would allow
us to observe the experiences of hospitals with various
characteristics, such as variations in size, profit status, and episode
utilization patterns, and examine whether these characteristics impact
the effect of the model on patient outcomes and Medicare expenditures
within episodes of care. Stratification would also substantially reduce
the extent to which the selected hospitals will differ from non-
selected hospitals on the characteristics used for stratification,
which would improve the statistical power of the subsequent model
evaluation, improving our ability to reach conclusions about the
model's effects on episode costs and the quality of patient care.
Therefore, given the authority in section 1115A(a)(5) of the Act, which
allows the Secretary to elect to limit testing of a model to certain
geographic areas, we propose to use a stratified random sampling method
to select geographic areas and require all hospitals paid under the
IPPS in those areas to participate in the CCJR model and be financially
responsible for the cost of the episode, with certain exceptions as
previously discussed and in sections III.B.3 and III.C.7 of this
proposed rule.
a. Overview and Options for Geographic Area Selection
In determining the geographic unit for the geographic area
selection for this model, we considered using a stratified random
sampling methodology to select (1) certain counties based on their
Core-Based Statistical Area (CBSA) status, (2) certain zip codes based
on their Hospital Referral Regions (HRR) status or (3) certain states.
We address each geographic unit in turn.
We considered selecting certain counties based on their CBSA
status. The general concept of a CBSA is that of a core area containing
a substantial population nucleus, together with adjacent communities
having a high degree of economic and social integration within that
core. Counties are designated as part of a CBSA when the county or
counties or equivalent entities are associated with at least one core
(urbanized area or urban cluster) of at least 10,000 in population,
plus adjacent counties having a high degree of social and economic
integration with the core as measured through commuting ties with the
counties associated with the core. There are 929 CBSAs currently used
for geographic wage adjustment purposes across Medicare payment
systems.\4\ The 929 CBSAs include 388 Metropolitan Statistical Areas
(MSAs), which have an urban core population of at least 50,000, and the
541 Micropolitan Statistical Areas ([micro]SA), which have an urban
core population of at least 10,000 but less than 50,000. CBSAs may be
further combined into a Combined Statistical Area (CSA) which consists
of two or more adjacent CBSAs (MSAs or [micro]SAs or both) with
substantial employment interchange. Counties not classified as a CBSA
are typically categorized and examined at a state level.
---------------------------------------------------------------------------
\4\ As stated in the FY 2014 IPPS/LTCH PPS proposed rule (78 FR
27552) and final rule (78 FR 50586), on February 28, 2013, OMB
issued OMB Bulletin No. 13-01, which established revised
delineations for MSAs, [micro]SAs, and CSAs, and provided guidance
on the use of the delineations of these statistical areas. A copy of
this bulletin may be obtained at http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
---------------------------------------------------------------------------
[[Page 41207]]
The choice of a geographical unit based on CBSA status could mean
selection of a CBSA, an MSA, or a CSA. We propose basing the selection
on an MSA, which we will discuss later in this section.
In determining which geographic areas will be potentially subject
to selection, we focused on MSAs, which is a subcategory within CBSA
characterized by counties associated with an urban core population of
at least 50,000. It is our intention at this time that counties not in
an MSA would not be subject to the selection process. These counties
not subject to selection would include the [micro]SA counties and the
counties without a core urban area of at least 10,000. These areas are
largely rural areas and have a limited number of qualifying LEJR cases.
Relatively few of these areas would be able to qualify for inclusion
based on the minimum number of LEJR episodes in year requirement
discussed later in this section.
We considered, but ultimately decided against, using CSA
designation instead of MSAs as a potential unit of selection. Under
this scenario, we would look at how OMB classifies counties. We would
first assess whether a county has been identified as belonging to a
CSA, a unit which consists of adjacent MSAs or [micro]SAs or both. If
the county was not in a CSA, we would determine if it was in an MSA
that is not part of a larger CSA. Counties not associated with a CSA or
an MSA would be unclassified and excluded from selection. These
unclassified areas would include the counties in a state that were
either not a CBSA (no core area of at least 10,000) or associated with
a [micro]SA (core area of between 10,000 and 50,000) but unaffiliated
with a CSA.
Whether to select on the basis of CSA/MSAs or just on MSAs was
influenced by a number of factors including an assessment with respect
to the anticipated degree to which LEJR patients would be willing to
travel for their initial hospitalization, the extent to which surgeons
are expected to have admitting privileges in multiple hospitals located
in different MSAs and considerations related to the degree to which we
desire to include hospitals within [micro]SAs that are part of a larger
CSA. It was believed that the anticipated risk for patient shifting and
steering between MSAs within a CSA was not severe enough to warrant
selecting CSAs. However, for these same reasons, we believe that
selecting complete MSAs is preferable to selecting metropolitan
divisions of MSAs for inclusion in the CCJR model. We use the
metropolitan divisions to set wage indices for its prospective payment
systems. Of the 388 MSAs, there are 11 MSAs that contain multiple
metropolitan divisions. For example, the Boston-Cambridge-Newton, MA-NH
MSA is divided into the following metropolitan divisions:
Boston, MA.
Cambridge-Newton-Framingham, MA.
Rockingham County-Strafford County, NH.
The Seattle-Tacoma-Bellevue, WA MSA is divided into the following
metropolitan divisions:
Seattle-Bellevue-Everett, WA.
Tacoma-Lakewood, WA.
We propose selecting entire MSAs rather than sub-divisions within
an MSA.
We next considered selecting hospital referral regions (HRRs). HRRs
represent regional health care markets for tertiary medical care. There
are 306 HRRs with at least one city where both major cardiovascular
surgical procedures and neurosurgery are performed. HRRs are defined by
determining where the majority of patients were referred for major
cardiovascular surgical procedures and for neurosurgery.\5\ Compared to
MSAs, HRRs are classified based on where the majority of beneficiaries
within a zip code receive their hospital services for selected tertiary
types of care. The resulting HRRs represent the degree to which people
travel for tertiary care that generally requires the services of a
major referral center and not the size of the referral network for more
routine services, such as knee and hip arthroplasty procedures. In
addition, because HRRs are defined based on referrals for
cardiovascular surgical procedures and neurosurgery, they may not
reflect referrals for orthopedic procedures. Therefore, we believe that
MSAs as a geographic unit are preferable over HRRs for this model.
---------------------------------------------------------------------------
\5\ The Dartmouth Atlas of Healthcare, http://www.dartmouthatlas.org/data/region/. Accessed on April 9, 2015.
---------------------------------------------------------------------------
We also considered selecting states for the CCJR model. However, we
concluded that MSAs as a geographic unit are preferable over states for
the CCJR model. As mentioned in section III.A.4.b of this proposed
rule, we anticipate that hospitals that would otherwise be required to
participate in the CCJR model would be excluded from the model because
their relevant LEJR episodes are already being tested in BPCI. If we
were to select states as the geographic unit, there is a potential that
an entire state would need to be excluded because a large proportion of
hospitals in that state are episode initiators of LEJR episodes in
BPCI. In contrast, if we excluded a specific MSA due to BPCI
participation, as discussed in the next section, we could still select
another MSA within that same state. Likewise, if we chose states as the
geographic unit, we would automatically include hospitals in all rural
areas within the state selected. If MSAs are selected for the
geographic unit, we anticipate that fewer small rural hospitals would
be included in the model. Using a unit of selection smaller than a
state would allow for a more deliberate choice about the extent of
inclusion of rural or small population areas. Selecting states rather
than MSAs would also greatly reduce the number of independent
geographic areas subject to selection under the model, which would
decrease the statistical power of the model evaluation. Finally, MSAs
straddle state lines where providers and Medicare beneficiaries can
easily cross these boundaries for health care. Choosing states as the
geographic unit would potentially divide a hospital market and set up a
greater potential for patient shifting and steering to different
hospitals under the model. The decision that the MSA-level analysis was
more analytically appropriate was based on the specifics of this model
and not meant to imply that other levels of selection would not be
appropriate in a different model such as the proposed Home Health Value
Based Purchasing (HHVBP) model.
For the reasons previously discussed, we propose to require
participation in the CCJR model of all hospitals, with limited
exceptions as previously discussed in section III.A.2.of this proposed
rule, paid under the IPPS that are physically located in a county in an
MSA selected through a stratified random sampling methodology, outlined
in section III.A.3.b in this proposed rule, to test and evaluate the
effects of an episode-based payment approach for an LEJR episodes. We
propose to determine that a hospital is located in an area selected if
the hospital is physically located within the boundary of any of the
counties in that MSA as of the date the selection is made. Although
MSAs are revised periodically, with additional counties added or
removed from certain MSAs, we propose to maintain the same cohort of
selected hospitals throughout the 5 year performance period of the
model with limited exceptions as described later in this section. Thus,
we propose not to add hospitals to the model if after the start of the
model new counties are added to one of the selected MSAs or
[[Page 41208]]
remove hospitals from the model if counties are removed from one of the
selected MSAs. We believe that this approach will best maintain the
consistency of the participants in the model, which is crucial for our
ability to evaluate the results of the model. However, we retain the
possibility of adding a hospital that is opened or incorporated within
one of the selected counties after the selection is made and during the
period of performance. (See section III.C.of this proposed rule for
discussion of how target prices will be determined for such hospitals.)
Although we considered including hospitals in a given MSA based on
whether the hospitals were classified into the MSA for IPPS wage index
purposes, this process would be more complicated, and we could not find
any compelling reasons favoring this approach. For example, we assign
hospitals to metro divisions of MSAs when those divisions exist. See
our previous discussion of this issue. In addition, there is the IPPS
process of geographic reclassification by which a hospital's wage index
value or standardized payment amount is based on a county other than
the one where the hospital is located. For the purpose of this model,
it is simpler and more straightforward to use the hospital's physical
location as the basis of assignment to a geographic unit. This decision
would have no impact on a hospital's payment under the IPPS. We seek
comment on our proposal to include participant hospitals for the CCJR
model based on the physical location of the hospital in one of the
counties included in a selected MSA.
b. MSA Selection Methodology
We propose to select the MSAs to include in the CCJR model by
stratifying all of the MSAs nationwide according to certain
characteristics.
(1) Exclusion of Certain MSAs
Prior to assigning an MSA to a selection stratum, we examined
whether the MSA met specific proposed exclusion criteria. MSAs were
evaluated sequentially using the following 4 exclusion criteria: First,
MSAs in which fewer than 400 LEJR episodes (determined as we propose to
determine episodes included in this model, as discussed in section
III.B.2) occurred from July 1, 2013 through June 30, 2014 were removed
from possible selection. The use of the 400 LEJR cases in a year was
based on a simple one-sided power calculation to assess the number of
episodes that would be needed to detect a 5 percent reduction in
episode expenditures. Accordingly, cases in hospitals paid under either
the critical access hospital (CAH) methodology or the Maryland All-
Payer Model are not included in the count of eligible episodes. This
criterion removed 156 MSAs from possible selection.
Second, MSAs were removed from possible selection if there were
fewer than 400 non-BPCI LEJR episodes in the MSA in the reference year.
For the purposes of this exclusion, the number of BPCI episodes was
estimated as the number of potentially eligible cases during the
reference year that occurred in acute care hospitals participating in
BPCI Model 1, or in phase 2 of BPCI Models 2 or 4 as of July 1, 2015
and the number of LEJRs in 2013 and 2014 associated with these
hospitals was examined. This criterion removed an additional 24 MSAs
from potential selection.
Third, MSAs were also excluded from possible selection if the MSA
was dominated by BPCI Models 1, 2, 3, or 4 episodes to such a degree
that it would impair the ability of participants in either the CCJR
model or the BPCI models to succeed in the objectives of the initiative
or impair the ability to set accurate and fair prices. We anticipate
that some degree of overlap in the two programs will be mutually
helpful for both models. There are two steps to this exclusion. First,
we looked at the number of LEJR episodes at BPCI Model 1, 2 or 4
initiating hospitals and second, the number of LEJR episodes among BPCI
Model 3 SNF and HHA episode initiators. We set the first cut off for
this exclusion if, within an MSA, more than 50 percent of otherwise
qualifying proposed CCJR episodes were in Phase 2 of BPCI Model 2 or 4
with hospital initiators. We set the second cut off for BPCI Model 3,
based on if either SNF or HHA BPCI Model 3 initiating providers
accounted for more than 50 percent of LEJR referrals to that provider
type, the MSA would be eliminated from the possibility of selection. As
a result of this third criterion, 4 additional MSAs were removed from
possible selection. No MSAs were excluded based on Skilled Nursing
Facility (SNF) or Health Home Agency (HHA) participation in Model 3.
Finally, MSAs were removed if, after applying the previous 3
criteria they remained eligible for selection, but more than 50 percent
of estimated eligible episodes during the reference year were not paid
under the IPPS system. Please refer to the appenda for this proposed
rule for the status of each MSA based on these exclusion criteria,
available at http://innovation.cms.gov/initiatives/ccjr/. After
applying these four exclusions, 196 MSAs remained to be stratified for
purposes of our proposed selection methodology.
(2) Proposed Selection Strata
Numerous variables were considered as potential strata for
classifying MSAs included in the model. However, our proposal is
intended to give priority to transparency and understandability of the
strata. We propose creating selection strata based on the following two
dimensions: MSA average wage-adjusted historic LEJR episode payments
and MSA population size.
(a) MSA Average Wage-adjusted Historic LEJR Episode Payments.
We were interested in being able to classify and divide MSAs
according to their typical patterns of care associated with LEJR
episodes. As a straightforward measure of LEJR patterns of care, we
selected the mean MSA episode payment, as defined in this proposed
rule. MSAs vary in their average episode payments. The average episode
payments in an area may vary for a variety of reasons including--1) in
response to the MS-DRG mix and thus the presence of complicating
conditions; 2) readmission rates; 3) practice patterns associated with
type of PAC provider(s) treating beneficiaries; 4) variations of
payments within those PAC providers, and 5) the presence of any outlier
payments.
The measure of both mean episode payments and median episode
payments within the MSA was considered. We propose to stratify by mean
because it would provide more information on the variation in episode
payments at the high end of the range of payments. We are interested in
the lower payment areas for the purpose of informing decisions about
potential future model expansion. However, the CCJR model is expected
to have the greatest impact in areas with higher average episode
payments.
The average episode payments used in this analysis were calculated
based on the proposed episode definition for CCJR using Medicare claims
accessed through the Chronic Conditions Warehouse for 3 years with
admission dates from July 1, 2011 through June 30, 2014. Episode
payments were wage-adjusted using the FY 2014 hospital wage index
contained in the FY 2014 IPPS Final Rule, downloaded at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY-2014-IPPS-Final-Rule-Home-Page-Items/FY-2014-IPPS-Final-Rule-CMS-1599-F-Data-Files.html. The adjusted payment was
calculated by dividing the unadjusted payment by a factor equal to the
sum of 0.3 plus the
[[Page 41209]]
multiplicative product of 0.7 and the wage index value of the hospital
where the LEJR was performed. Episodes in the database with IPPS
payments less than $4,000 for the DRG 469 or 470 case were deleted as
indicating that the hospital did not receive full payment for the LEJR
procedure. We also truncated the episode payment at the 99.9th
percentile of the distribution ($135,000) to limit the impact of
extreme outliers.
(b) MSA Population Size
The second dimension proposed for the CCJR selection strata is the
number of persons in the MSA. In deciding how best to incorporate the
dimensions of urban density and availability of medical resources, a
variety of measures were considered, including overall population in
the included counties, overall population in the core area of the MSA,
population over the age of 65 in the MSA, the number of hospital beds
and the number of Medicare FFS LEJR procedures in a year. The reason we
decided to include this dimension in the strata definition is that
these factors are believed to be associated with the availability of
resources and variations in practice and referral patterns by the size
of the healthcare market. When examined, these alternative measures
were all very highly correlated with one another, which allowed the use
of one of these measures to be able to substitute for the others in the
definition of the stratum. From these alternative approaches, we choose
to use MSA population.
In operationalizing this measure, MSAs were classified according to
their 2010 census population.
(c) Analysis of Strata
The two proposed domains, MSA population and MSA historic LEJR
episode spending, were examined using a K-Means factor analysis. The
purpose of this factor analysis was to inform the process of which cut
points most meaningfully classify MSAs. Factor analysis attempts to
identify and isolate the underlying factors that explain the data using
a matrix of associations. Factor analysis is an interdependence
technique. Essentially, variables are entered into the model and the
factors (or clusters) are identified based on how the input variables
correlate to one another. The resulting clusters of MSAs produced by
this methodology suggested natural cut points for average episode
payments at $25,000 and $28,500. While not intentional, these divisions
correspond roughly to the 25th and 75th percentiles of the MSA
distribution. Cut points based on these percentiles seemed reasonable
from statistical and face validity perspectives in the sense that they
created groups that included an adequate number of MSAs and a
meaningful range of costs.
As a result of this analysis, we propose to classify MSAs according
to their average LEJR episode payment into four categories based the on
the 25th, 50th and 75th percentiles of the distribution of the 196
potentially selectable MSAs. This approach ranks the MSAs relative to
one another and creates four equally sized groups of 49. The population
distribution was divided at the median point for the MSAs eligible for
potential selection. This resulted in MSAs being divided into two equal
groups of 98. The characteristics of the resulting strata are shown in
Table 1.
Table 1--Summary Population and Episode Payment Statistics by MSA Group
----------------------------------------------------------------------------------------------------------------
Payment in
Payment in Payment in 2nd Payment in 3rd highest Total
lowest quarter lowest quarter lowest quarter quarter eligilble
----------------------------------------------------------------------------------------------------------------
MSAs with population less than
median:
Number of Eligible MSAs..... 33 19 22 24 98
Average of Population....... 251,899 238,562 268,331 254,154 253,554
Minimum MSA Population...... 96,275 55,274 106,331 96,024 55,274
Maximum MSA Population...... 425,790 416,257 424,858 428,185 428,185
Average Episode Payments ($) $22,994 $25,723 $27,725 $30,444 $26,410
Minimum Episode Payments.... $18,440 $24,898 $26,764 $29,091 $18,440
Maximum Episode Payments.... $24,846 $26,505 $28,679 $32,544 $32,544
MSAs with population more than
median:
Number of Eligible MSAs..... 16 30 27 25 98
Average of Population....... 1,530,083 1,597,870 1,732,525 2,883,966 1,951,987
Minimum MSA Population...... 464,036 436,712 434,972 439,811 434,972
Maximum MSA Population...... 4,335,391 5,286,728 12,828,837 19,567,410 19,567,410
Average Episode Payments ($) $23,192 $25,933 $27,694 $30,291 $27,082
Minimum Episode Payments.... $16,504 $25,091 $26,880 $28,724 $16,504
Maximum Episode Payments.... $24,819 $26,754 $28,659 $33,072 $33,072
-------------------------------------------------------------------------------
Total Eligible MSAs..... 49 49 49 49 ..............
----------------------------------------------------------------------------------------------------------------
Note: Population and episode payment means are un-weighted averages of the MSA values within each of the eight
MSA groups.
Please refer to the addenda for this proposed rule for information
on the non-excluded MSAs, their wage adjusted average LEJR episode
spending, their population and their resultant group assignment at:
http://innovation.cms.gov/initiatives/ccjr/.
(3) Factors Considered but Not Used in Creating Proposed Strata
In addition to the two dimensions we are proposing to use for the
selection groups previously discussed, a variety of possible
alternative measures and dimensions were considered. Many of these
variables are considered to be important but it was believed that it
was important to have a fairly straightforward and easily
understandable stratum definition. Simplicity, by definition, required
that only the most important variables would be used. If a market
characteristic under consideration was correlated with one of the
chosen dimensions or it was believed that variations in the
characteristic could be adequately captured by random selection within
the strata, is was not prioritized for inclusion.
Some of the factors considered that we are not proposing as
dimensions are--
Measures associated with variation in practice patterns
associated with LEJR episodes. In considering how to operationalize
this measure, a number of alternatives were considered including total
PAC LEJR payments in
[[Page 41210]]
an MSA, percent of LEJR episodes with a SNF claim in an MSA, percent of
LEJR episodes with an initial discharge to HHA, percent of LEJR
episodes with an IRF claim, and percent of LEJR episodes with claims
for two or more types of PAC providers;
Measures associated with relative market share of
providers with respect to LEJR episodes;
Healthcare supply measures of providers in the MSA
including counts of IRF beds, SNF beds, hospital beds, and number of
orthopedic surgeons;
MSA level demographic measures such as; average income,
distributions of population by age, gender or race, percent dually
eligible, percent of population with specific health conditions or
other demographic composition measures; and
Measures associated with the degree to which a market
might be more capable or ready to implement care redesign activities.
Examples of market level characteristics that might be associated with
anticipated ease of implementation include the MSA-level EHR meaningful
use levels, managed care penetration, ACO penetration and experience
with other bundling efforts.
It should be noted that, while these measures are proposed to be
part of the selection stratus, we acknowledge that these and other
market-level factors may be important to the proper understanding of
the evaluation of the impact of CCJR. It is the intention that these
and other measures will be considered in determining which MSAs are
appropriate comparison markets for the evaluation as well as considered
for possible subgroup analysis or risk adjustment purposes. The
evaluation will include beneficiary, provider, and market level
characteristics in how it examines the performance of this proposed
model.
(4) Sample Size Calculations and the Number of Selected MSAs
Analyses of the necessary sample size led us to conclude that we
need to select 75 MSAs of the 384 MSAs with eligible LEJR episodes to
participate in CCJR. The number and method of selection of these 75
MSAs from the 8 proposed groups is addressed in the following section.
In coming to the decision to target 75 MSAs, we are proposing a
conservative approach. Going below this threshold would jeopardize our
ability to be confident in our results and to be able to generalize
from the model to the larger national context. We discuss the
assumptions and modeling that went into our proposal to test the model
in 75 MSAs later in this section.
In calculating the necessary size of the model, a key consideration
was to have sufficient power to be able to detect the desired size
impact. The larger the anticipated size of the impact, the fewer MSAs
we would have to sample in order to observe it. However, a model sized
to be able to only detect large impacts runs the risk of not being able
to draw conclusions if the size of the change is less than anticipated.
The measure of interest used in estimating sample size requirements for
the CCJR model was wage-adjusted total episode spending. The data used
for the wage-adjusted total episode spending is the 3 year data pull
previously described that covers LEJR episodes with admission dates
from July 1, 2011 through June 30, 2014. For the purposes of the sample
size calculation the impact estimate assumed we wanted to be able to
detect a 2 percent reduction in wage adjusted episode spending after 1
year of experience. This amount was chosen because it is the
anticipated amount of the discount we propose to apply to target prices
in CCJR.
The next consideration in calculating the necessary sample size is
the degree of certainty we will need for the statistical tests that
will be performed. In selecting the right sample size, there are two
types of errors that need to be considered ``false negatives'' and
``false positives''. A false positive occurs if a statistical test
concludes that the model was successful (the model saved money) when it
was, in fact, not. A false negative occurs if a statistical test fails
to find statistically significant evidence that the model was
successful, but it was, in fact, successful. In considering the minimum
sample size needs of a model, a standard guideline in the statistical
literature suggests calibrating statistical tests to generate no more
than a 5 percent chance of a false positive and selecting the sample
size to ensure no more than a 20 percent chance of a false negative. In
contrast, the proposed sample size for this project was based on a 20
percent chance of a false positive and a 30 percent chance of a false
negative in order to be as conservative as was practicable.
A third consideration in the sample size calculation was the
appropriate unit of selection and whether it is necessary to base the
calculation on the number of MSAs, the number of hospitals, or the
number of episodes. As discussed later in this section, we are
proposing to base the sample size calculation at the MSA level.
The CCJR model is a nested comparative study, which has two key
features. First, the unit of assignment (to treatment and comparison
groups) is an identifiable group; such groups are not formed at random,
but rather through some physical, social, geographic, or other
connection among their members. Second, the units of observation are
members of those groups. In such designs, the major analytic problem is
that there is an expectation for a positive correlation (intra-class
correlation (ICC)) among observations of members of the same group
(MSA). That ICC reflects an extra component of variance attributable to
the group above and beyond the variance attributable to its members.
This extra variation will increase the variance of any aggregate
statistic beyond what would be expected with random assignment of
beneficiaries or hospitals to the treatment group.
In determining the necessary sample size, we need to take into
consideration the degrees of freedom. As part of this process, we
examined the number of beneficiaries, the number of hospitals, and the
number of MSAs and the level of correlation in episode payments between
each level. For example, while each beneficiary has their own episode
expenditure level, there are commonalities between those expenditure
amounts at the hospital level, based on hospital-specific practice and
referral patterns. The number of degrees of freedom needed for any
aggregate statistic is related to the number of groups (MSAs or
hospitals), not the number of observations (beneficiary episodes). If
we were to base the determination of the size of the model on
beneficiary episodes where correlation exists, we would have an
inflated false positive error rate and would overstate the impact of
the model. We empirically examined the level of correlation between
beneficiaries and hospitals and between hospitals and MSAs and
determined that the correlation was high enough to be of concern and
necessitate a MSA level unit of selection.
Using the aforementioned assumptions, a power calculation was run
which indicated we would need between 50 and 150 treatment MSAs to be
able to reliably detect a 2 percent reduction in payments after 1 year.
The lower end of this range assumes the ability of evaluation models to
substantially reduce variation through risk adjustment and modeling. We
anticipate that we will be able to use the conservative end of this
range, but assuming that evaluation modeling can achieve ``best''
results poses a real risk to our ability to draw conclusions. We want
to allow for some degree of flexibility and are thus proposing
proceeding with 75 MSAs. The 75 MSA
[[Page 41211]]
number is at the 25th percentile between the 50 and 150 treatment MSA
range. We narrowed the acceptable range to between 50 and 100, based on
the assumption that we will be able substantial improve our estimates
through modeling, and then chose a number in the middle of this reduced
range.
(5) Method of Selecting MSAs
As previously discussed, we are seeking to choose 75 MSAs from our
proposed 8 selection groups. We examined and considered a number of
possible approaches including equal selection in each of the eight
groups, equal selection in the four payment groups, selection
proportionate to the number of MSAs in each group, and a number of
approaches that differentially weighted the payment categories.
After consideration, it was decided that a methodology that
proportionally under-weighted more efficient MSAs and over-weighted
more expensive MSAs was the most appropriate approach to fulfilling the
overall priorities of this model to increase efficiencies and savings
for LEJR cases while maintaining or improving the overall quality of
care. This approach would make it less likely for the MSAs in the
lowest spending category to be selected for inclusion. We thought this
appropriate because the MSAs in the lowest expenditure areas have the
least room for possible improvement and are already performing
relatively efficiently compared to other geographic areas, which means
that experience with the model in these areas may be relatively less
valuable for evaluation purposes. At the same time, we believed it was
important to include some MSAs in this group in order to assess the
performance of this model in this type of circumstance. We also believe
it is appropriate for higher payment areas to be disproportionately
included because they are most likely to have significant room for
improvement in creating efficiencies. We expect more variation in
practice patterns among the more expensive areas. There are multiple
ways an MSA can be more relatively expensive, including through outlier
cases, higher readmission rates, greater utilization of physician
services, or through PAC referral patterns. A larger sample of MSAs
within the higher payment areas will allow for us to observe the impact
of the CCJR model on areas with these various practice patterns in the
baseline period.
The proposed method of disproportionate selection between the
strata is to choose 30 percent of the MSAs in the two groups in the
bottom quarter percentile of the payment distribution, 35 percent of
the MSAs in the two groups in the second lowest quartile, 40 percent in
the third quartile, and 45 percent in the highest episode payment
quartile. This proportion works out to an average of 38 percent
overall, which corresponds to 75 selected MSAs out of the 196 eligible.
The number of MSAs to be chosen in the eight selection groups is shown
in Table 2.
Table 2--Number of MSAs To Be Chosen From the Eight Selection Groups
----------------------------------------------------------------------------------------------------------------
Payment in
Payment in Payment in 2nd Payment in 3rd highest Total eligible
lowest quarter lowest quarter lowest quarter quarter MSAs
----------------------------------------------------------------------------------------------------------------
Selection Proportion............ 30% 35% 40% 45% ..............
Less Than Median Population (1) (2) (3) (4) ..............
(Group #)......................
Number Eligible MSAs........ 33 19 22 24 98
Proportion x Number......... 9.9 6.65 8.8 10.8 ..............
Number to be selected from 10 7 9 11 37
group......................
More Than Median Population (5) (6) (7) (8) ..............
(Group #)......................
Number Eligible MSAs........ 16 30 27 25 98
Proportion x Number......... 4.8 10.5 10.8 11.25 ..............
Number to be selected from 5 11 11 11 38
group......................
Total Eligible MSAs............. 49 49 49 49 196
Number to be selected....... 15 18 20 22 75
----------------------------------------------------------------------------------------------------------------
We selected the proposed MSAs for the CCJR model through random
selection. In the proposed method of selection, each MSA was assigned
to one of the eight selection groups previously identified. Based on
this sampling methodology, SAS Enterprise Guide 7.1 software was used
to run a computer algorithm designed to randomly select MSAs from each
strata. SAS Enterprise Guide 7.1 and the computer algorithm used to
conduct selection represents an industry-standard for generating
advanced analytics and provides a rigorous, standardized tool by which
to satisfy the requirements of randomized selection. The key SAS
commands employed include a ``PROC SURVEYSELECT'' statement coupled
with the ``METHOD=SRS'' option used to specify simple random sampling
as the sample selection method. A random number seed was generated for
each of the eight strata by using eight number seeds corresponding to
birthdates and anniversary dates of parties present in the room. The
random seeds for stratum one through eight were as follows: 907, 414,
525, 621, 1223, 827, 428, 524. Note that no additional stratification
was used in any of the eight groupings so as to produce an equal
probability of selection within each of the eight groups. For more
information on this procedure and the underlying statistical
methodology, please reference SAS support documentation at: http://support.sas.com/documentation/cdl/en/statug/63033/HTML/default/viewer.htm#statug_surveyselect_sect003.htm/. We also considered a
potential alternative approach to this random selection in which we
would generate a starting number within SAS and then choose every third
MSA within a group starting at this point until the relevant number of
MSAs were chosen. We opted to not utilize this feature for simplicity's
sake and alignment with other randomization methodologies used for CMS
models.
The selection of an MSA means that all hospitals that are
physically located anywhere within the counties that make up the MSA
are included. By definition, the entire county is included in an MSA
and hospitals that are in the relevant counties will be impacted even
if they are not part of the core urban area.
The MSAs selected may change if the methodology changes in response
to comments on the proposed methodology. Should the methodology we
propose in this rule change as a result of comments received during the
rulemaking process, it could result in different areas being selected
for the model. In such an event, we would
[[Page 41212]]
apply the final methodology and announce the selected MSAs in the final
rule. Therefore we seek comment from all interested parties in every
MSA on the randomized selection methodology proposed in this section.
In accordance with section 1115A of the Act, we are proposing to
codify these proposals in regulation in the new proposed part 510 of
the Code of Federal Regulations.
Table 3--Proposed MSAS Included in the CCJR Model
------------------------------------------------------------------------
MSA MSA Name
------------------------------------------------------------------------
10420............................. Akron, OH.
10740............................. Albuquerque, NM.
11700............................. Asheville, NC.
12020............................. Athens-Clarke County, GA.
12420............................. Austin-Round Rock, TX.
13140............................. Beaumont-Port Arthur, TX.
13900............................. Bismarck, ND.
14500............................. Boulder, CO.
15380............................. Buffalo-Cheektowaga-Niagara Falls,
NY.
16020............................. Cape Girardeau, MO-IL.
16180............................. Carson City, NV.
16740............................. Charlotte-Concord-Gastonia, NC-SC.
17140............................. Cincinnati, OH-KY-IN.
17820............................. Colorado Springs, CO.
17860............................. Columbia, MO.
18580............................. Corpus Christi, TX.
19500............................. Decatur, IL.
19740............................. Denver-Aurora-Lakewood, CO.
20020............................. Dothan, AL.
20500............................. Durham-Chapel Hill, NC.
21780............................. Evansville, IN-KY.
22420............................. Flint, MI.
22500............................. Florence, SC.
22660............................. Fort Collins, CO.
23540............................. Gainesville, FL.
23580............................. Gainesville, GA.
24780............................. Greenville, NC.
25420............................. Harrisburg-Carlisle, PA.
26300............................. Hot Springs, AR.
26900............................. Indianapolis-Carmel-Anderson, IN.
28140............................. Kansas City, MO-KS.
28660............................. Killeen-Temple, TX.
29820............................. Las Vegas-Henderson-Paradise, NV.
30700............................. Lincoln, NE.
31080............................. Los Angeles-Long Beach-Anaheim, CA.
31180............................. Lubbock, TX.
31540............................. Madison, WI.
32780............................. Medford, OR.
32820............................. Memphis, TN-MS-AR.
33100............................. Miami-Fort Lauderdale-West Palm
Beach, FL.
33340............................. Milwaukee-Waukesha-West Allis, WI.
33700............................. Modesto, CA.
33740............................. Monroe, LA.
33860............................. Montgomery, AL.
34940............................. Naples-Immokalee-Marco Island, FL.
34980............................. Nashville-Davidson--Murfreesboro--
Franklin, TN.
35300............................. New Haven-Milford, CT.
35380............................. New Orleans-Metairie, LA.
35620............................. New York-Newark-Jersey City, NY-NJ-
PA.
35980............................. Norwich-New London, CT.
36260............................. Ogden-Clearfield, UT.
36420............................. Oklahoma City, OK.
36740............................. Orlando-Kissimmee-Sanford, FL.
37860............................. Pensacola-Ferry Pass-Brent, FL.
38300............................. Pittsburgh, PA.
38940............................. Port St. Lucie, FL.
38900............................. Portland-Vancouver-Hillsboro, OR-WA.
39340............................. Provo-Orem, UT.
39740............................. Reading, PA.
40060............................. Richmond, VA.
40420............................. Rockford, IL.
40980............................. Saginaw, MI.
41860............................. San Francisco-Oakland-Hayward, CA.
42660............................. Seattle-Tacoma-Bellevue, WA.
42680............................. Sebastian-Vero Beach, FL.
43780............................. South Bend-Mishawaka, IN-MI.
41180............................. St. Louis, MO-IL.
44420............................. Staunton-Waynesboro, VA.
45300............................. Tampa-St. Petersburg-Clearwater, FL.
45780............................. Toledo, OH.
45820............................. Topeka, KS.
46220............................. Tuscaloosa, AL.
46340............................. Tyler, TX.
47260............................. Virginia Beach-Norfolk-Newport News,
VA-NC.
48620............................. Wichita, KS.
------------------------------------------------------------------------
B. Episode Definition for the Comprehensive Care for Joint Replacement
(CCJR) Model
1. Background
Coordinated Quality Care-Joint Replacement is an episode payment
model, focused on incentivizing health care providers to improve the
efficiency and quality of care for an episode of care as experienced by
a Medicare beneficiary by bundling payment for services furnished to
the beneficiary for an episode of care for a specific clinical
condition over a defined period of time. Key policies of such a model
include the definition of episodes of care. Episodes of care have two
significant dimensions--(1) a clinical dimension that describes what
clinical conditions and associated services comprise the episode; and
(2) a time dimension that describes the beginning, middle, and end of
an episode. We present our proposals for these two dimensions of CCJR
episodes in this section.
2. Clinical Dimension of Episodes of Care
a. Definition of the Clinical Conditions Included in the Episode
As discussed previously in section I.A. of this proposed rule, we
have identified LEJR episodes, primarily hip and knee replacements, as
the focus of this model. We believe that a straightforward approach for
hospitals and other providers to identify Medicare beneficiaries in
this payment model is important for the care redesign that is required
for model success, as well as to operationalize the proposed payment
and other model policies.
The vast majority of lower extremity joint replacements (LEJRs) are
furnished in the inpatient hospital setting, with a small fraction of
partial knee replacements occurring in the hospital outpatient
department (HOPD) setting. Most of the Current Procedural Terminology
(CPT) codes that physicians report for LEJR are on the hospital
Outpatient Prospective Payment System (OPPS) inpatient only list. The
CY 2015 OPPS inpatient only list is Addendum E of the CY 2015 Hospital
Outpatient Prospective Payment-Final Rule with Comment Period, which is
available on the CMS Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices-Items/CMS-1613-FC.html. Thus, under current FFS payment policy, Medicare pays
hospitals for the facility services required for LEJR only when those
procedures are furnished in the inpatient hospital setting. Therefore,
we believe an episode payment model most appropriately focuses around
an inpatient hospitalization for these major surgical procedures, as
there is little opportunity for shifting the procedures under this
model to the outpatient setting.
We note further that LEJRs are paid for under the IPPS through the
following two Medicare Severity-Diagnosis Related Groups (MS-DRGs):
MS-DRG 469 (Major joint replacement or reattachment of
lower extremity with Major Complications or Comorbidities (MCC)).
MS-DRG 470 (Major joint replacement or reattachment of
lower extremity without MCC).
Multiple ICD-9-CM procedure codes that describe LEJR procedures and
other less common lower extremity procedures group to these MS-DRGs,
with their percentage distribution within the IPPS MS-DRGs 469 and 470
for the past 4 years outlined in Table 4.
[[Page 41213]]
Table 4--Distribution of Hospital Claims for Procedure Codes Mapping to MS-DRGS 469 and 470
----------------------------------------------------------------------------------------------------------------
ICD-9-CM procedure code Code descriptor FY 2014 % FY 2013 % FY 2012 % FY 2011 %
----------------------------------------------------------------------------------------------------------------
81.54........................... Total knee replacement............ 57 58 58 58
81.51........................... Total hip replacement............. 30 29 29 28
81.52........................... Partial hip replacement........... 12 13 13 14
81.56........................... Total ankle replacement........... 0 0 0 0
00.85........................... Resurfacing hip, total, acetabulum 0 0 0 0
and femoral head.
00.86........................... Resurfacing hip, partial, femoral 0 0 0 0
head.
00.87........................... Resurfacing hip, partial, 0 0 0 0
acetabulum.
84.27........................... Lower leg or ankle reattachment... 0 N/A N/A N/A
84.28........................... Thigh reattachment................ N/A N/A N/A 0
----------------------------------------------------------------------------------------------------------------
Note: Percentages or claim counts with ``N/A'' had no claims. percentages of 0% represent less than 0.5% of
total claims.
Additionally, we note that there are various types of claims-based
information available to CMS, hospitals, and other providers, that
could be used to identify beneficiaries in the model who receive LEJRs,
including the MS-DRGs for the acute care hospitalization for the
procedure, the ICD-9-CM procedure code on the hospital claim, or the
CPT code(s) reported by the orthopedic surgeon who furnishes the
surgical procedure. While we could utilize ICD-9-CM procedure codes or
CPT codes to identify beneficiaries included in the model, over 85
percent of procedures that group to MS-DRGs 469 and 470 are hip or knee
replacements. Additionally, the hospitals that would be participating
in this model receive payment under the IPPS, which is not determined
by CPT codes and is based on clinical conditions and procedures that
group to MS-DRGs. Finally, our review of the other low volume
procedures that group to these same MS-DRGs, aside from total or
partial hip and knee replacements, does not suggest that there is
significant clinical or financial heterogeneity within these two MS-
DRGs such that we would need to define care for included beneficiaries
by ICD-9-CM procedure codes.
Therefore, we propose that an episode of care in the CCJR model is
triggered by an admission to an acute care hospital stay (hereinafter
``the anchor hospitalization'') paid under MS-DRG 469 or 470 under the
IPPS during the model performance period. This approach offers
operational simplicity for providers and CMS, and is consistent with
the approach taken by the BPCI initiative to identify beneficiaries
whose care is included in the LEJR episode for that model. We seek
public comments on this proposal to define the clinical conditions that
are the target of CCJR.
b. Definition of Related Services Included in the Episode
For purposes of this model, as in BPCI, given the frequent
comorbidities experienced by Medicare beneficiaries and the generally
elective nature of LEJR, we are interested in testing inclusive
episodes to incentivize comprehensive, coordinated patient-centered
care for the beneficiary throughout the episode. We propose to exclude
only those Medicare items and services furnished during the episode
that are unrelated to LEJR procedures based on clinical justification.
During our experience with BPCI implementation, we reviewed a number of
narrow episode definitions for LEJR episodes that were recommended by
BPCI participants and other interested parties during the design phase
for this project. We concluded that these narrow definitions commonly
exclude many services that may be linked to the LEJR, as LEJR
beneficiaries, on average, are at higher risk for more clinical
problems than Medicare beneficiaries who have not recently undergone
such procedures.
Therefore, we propose that all CCJR episodes, beginning with the
admission for the anchor hospitalization under MS-DRG 469 or 470
through the end of the proposed episode, include all items and services
paid under Medicare Part A or Part B with the exception of certain
exclusions as proposed in this section that are excluded because they
are unrelated to the episode. The items and services ultimately
included in the episode after the exclusions are applied are called
related items and services. As proposed in sections III.C.4 and III.C.6
of this proposed rule, Medicare spending for related items and services
would be included in the historical data used to set target prices, as
well as in the calculation of actual episode spending that would be
compared against the target price to assess the performance of
participant hospitals. In contrast, Medicare spending for unrelated
items and services (excluded from the episode definition) would not be
included in the historical data used to set target prices or in the
calculation of actual episode spending.
Related items and services included in CCJR episodes would be the
following items and services paid under Medicare Part A or Part B,
after the exclusions are applied:
Physicians' services.
Inpatient hospital services (including readmissions), with
certain exceptions proposed later in this section.
Inpatient psychiatric facility (IPF) services.
LTCH services.
IRF services.
SNF services.
HHA services.
Hospital outpatient services.
Independent outpatient therapy services.
Clinical laboratory services.
Durable medical equipment (DME).
Part B drugs.
Hospice.
We note that under our proposed definition of related services
included in the episode, the episode could include certain per-member-
per-month model payments, as discussed in section III.C of this
proposed rule.
We propose to exclude from CCJR drugs that are paid outside of the
MS-DRG, specifically hemophilia clotting factors (Sec. 412.115),
identified through HCPCS code, diagnosis code, and revenue center on
IPPS claims. Hemophilia clotting factors, in contrast to other drugs
that are administered during an inpatient hospital stay and paid
through the MS-DRG, are paid separately by Medicare in recognition that
clotting factors are costly and essential to appropriate care for
certain beneficiaries. Thus, we believe there are no efficiencies to be
gained in the variable use of these high cost drugs when particular
beneficiaries receive
[[Page 41214]]
LEJR procedures who have significantly different medical needs for
clotting factors under an episode payment model, so we propose to
exclude these high cost drugs from the actual historical episode
expenditure data used to set target prices and from the hospital's
episode actual spending that is reconciled to the target price.
Similarly, we propose to exclude IPPS new technology add-on payments
for drugs, technologies, and services from CCJR episodes, excluding
them from both the actual historical episode expenditure data used to
set target prices and from the hospital's actual episode spending that
is reconciled to the target price. This proposal would apply to both
the anchor hospital stay and any related readmissions during the
episode. New technology add-on payments are made separately and in
addition to the MS-DRG payment under the IPPS for specific new drugs
technologies, and services that substantially improve the diagnosis or
treatment of Medicare beneficiaries and would be inadequately paid
otherwise under the MS-DRG system. Medicare pays a marginal cost factor
of 50 percent for the costs to hospitals of the new drugs,
technologies, or services. We do not believe it would be appropriate
for the CCJR model to potentially hamper beneficiaries' access to new
technologies that are receiving new technology add-on payments or to
burden hospitals who choose to use these new drugs, technologies, or
services with concern about these payments counting toward episode
actual expenditures. In addition, because new drugs, technologies, or
services approved for the add-on payments vary unpredictably over time
in their application to specific clinical conditions, we believe we
should exclude IPPS new technology add-on payments from CCJR episodes.
We followed a number of general principles in determining other
proposed excluded services from the CCJR episodes in order to promote
coordinated, high-quality, patient-centered care. Based on the broad
nature of these episodes, we propose to identify excluded (unrelated)
services rather than included (related) services based on the rationale
that all Part A and Part B services furnished during the episode are
related to the episode, unless they are unrelated based on clinical
justification as described in more detail later in this section. In
developing our proposals for exclusions for this model, we believe that
no Part A services, other than certain excluded hospital readmissions
during the episode as described in this section, furnished post-
hospital discharge during the episode should be excluded, as post-
hospital discharge Part A services are typically intended to be
comprehensive in nature. We also believe that no claims for services
with diagnosis codes that are directly related to the LEJR procedure
itself (for example, loosening of the joint prosthesis) based on
clinical judgment, and taking into consideration coding guidelines,
should be excluded. Furthermore, we believe that no claims for
diagnoses that are related to the quality and safety of care furnished
during the episode, especially the anchor hospitalization under MS-DRG
469 or 470, should be excluded, such as direct complications of post-
surgical care during the anchor hospitalization. Examples of diagnoses
that would not be excluded on this basis include surgical site
infection and venous thromboembolism. Finally, we believe that no
claims for services for diagnoses that are related to preexisting
chronic conditions such as diabetes, which may be affected by care
furnished during the episode, should be excluded. However, severe
exacerbations of chronic conditions (for example, some surgical
readmissions) that are unlikely to be affected by care furnished during
the episode should be excluded; thus, when a beneficiary is admitted to
the hospital during the episode for these circumstances, we would not
consider it to be a related readmission for purposes of CCJR. We also
believe that services for clinical conditions that represent acute
clinical conditions not arising from an existing chronic clinical
condition or complication of LEJR surgery occurring during an episode
of care, which would not be covered by the previous principles about
included services, should be excluded.
To operationalize these principles for CCJR, we propose to exclude
unrelated inpatient hospital admissions during the episode by
identifying MS-DRGs for exclusion. We propose to exclude unrelated Part
B services based on the ICD-9-CM diagnosis code (or their ICD-10-CM
equivalents when ICD-10-CM codes are implemented) that is the principal
diagnosis code reported on claims for services furnished during the
episode. More specifically, we propose to exclude specific inpatient
hospital admissions and services consistent with the LEJR episode
definition (also triggered by MS-DRGs 469 and 470) that is currently
used in BPCI Model 2. We note that the list of exclusions was initially
developed over 2 years ago for BPCI through a collaborative effort of
CMS staff, including physicians from medical and surgical specialties,
coding experts, claims processing experts, and health services
researchers. The list has been shared with thousands of entities and
individuals participating in one or more phases of BPCI, and has
undergone refinement over that time in response to stakeholder input
about specific diagnoses or MS-DRGs for exclusion, resulting in only
minimal changes over the last 2 years. Thus, the BPCI list of
exclusions for LEJR procedures has been vetted broadly in the health
care community; refined based on input from a wide variety of
providers, researchers and other stakeholders; and successfully
operationalized in the BPCI models. We are proposing its use in CCJR
based on our confidence related to our several of years of experience
that this definition is reasonable and workable for LEJR episodes, for
both providers and CMS.
With respect to the proposed inpatient hospital admission
exclusions for this model, we propose that all medical MS-DRGS for
readmissions be included in CCJR episodes as related services, with the
exception of oncology and trauma medical MS-DRGs. We propose that
admissions for oncology and trauma medical MS-DRGs be excluded from
CCJR episodes. Readmissions for medical MS-DRGs are generally linked to
the hospitalization for the LEJR procedure as a complication of the
illness that led to the surgery, a complication of treatment or
interactions with the health care system, or a chronic illness that may
have been affected by the course of care. We refer readers to section
III.D. of this proposed rule for background and discussion of the
complication rate measure proposed for CCJR that includes common
medical complications resulting from the aforementioned circumstances
following LEJR procedures and that may result in related hospital
readmissions. For readmissions for medical MS-DRGs, the selection of
the primary diagnosis code is not clear-cut, so we generally believe
they all should be included, and we strongly believe that providers
should focus on comprehensive care for beneficiaries during episodes.
We propose to include all disease-related surgical MS-DRGs for
readmissions, such as hip/knee revision, in CCJR episodes. We also
propose to include readmissions for all body system-related surgical
MS-DRGs as they are generally related to complications of the LEJR
procedures. An example of a readmission of this type would be for an
inferior vena cava filter placement for
[[Page 41215]]
treatment of thromboembolic complications of the LEJR. We propose to
exclude hospital admissions for chronic disease surgical MS-DRGs, such
as prostatectomy (removal of the prostate gland), as they are unrelated
to the clinical condition that led to the LEJR nor would they have been
precipitated by the LEJR. Finally, we propose that hospital admissions
for acute disease surgical MS-DRGs, such as appendectomy, be excluded
because they are highly unlikely to be related to, or precipitated by,
LEJR procedures and would not be affected by LEJR episode care
redesign.
With respect to the LEJR proposed diagnosis code exclusions for
Part B services for this model, we propose that ICD-9-CM codes be
excluded or included as a category and as identified by code ranges. We
propose that disease-related diagnoses, such as osteoarthritis of the
hip or knee, are included. We also propose that body system-related
diagnoses are included because they relate to complications that may
arise from interactions with the health care system. An example of this
would be pressure pre-ulcer skin changes. Additionally, we propose that
all common symptom diagnoses are included because providers have
significant discretion to select these as principal diagnosis codes. We
propose that acute disease diagnoses, such as severe head injury, are
excluded. Finally, we propose that chronic disease diagnoses be
included or excluded based on specific clinical and coding judgment as
described previously with respect to the original development of the
exclusions for LEJR episodes under BPCI, taking into consideration
whether the condition was likely to have been affected by the LEJR
procedure and recovery period and whether substantial services were
likely to have been provided for the chronic condition during the
episode. Thus, chronic kidney disease and cirrhosis would be included
in the episode, but glaucoma and chemotherapy would be excluded.
Exclusions from CCJR episodes are based on care for unrelated
clinical conditions represented by MS-DRGs for readmissions during the
episode and ICD-9 CM codes for Part B services furnished during the
episode after discharge from the anchor hospitalization. The complete
lists of proposed excluded MS-DRGs for readmissions and proposed
excluded ICD-9-CM codes for Part B services is posted on the CMS Web
site at http://innovation.cms.gov/initiatives/ccjr/.
We note that as CMS moves to implement ICD-10-CM we will make the
CCJR exclusions that would map to the final ICD-9-CM exclusions for
CCJR available in the ICD-10-CM format as well. We propose that all
Part A and B-covered items and services that would not be excluded
based on the exclusions list are included in the episode. Furthermore,
we propose to update the exclusions list without rulemaking on an
annual basis, at a minimum, to reflect annual changes to ICD-CM coding
and annual changes to the MS-DRGs under the IPPS, as well as to address
any other issues that are brought to our attention by the public
throughout the course of the model test.
We would first develop potential exclusions list revisions of MS-
DRGs for readmissions and ICD-9 (or ICD-10, as applicable) diagnosis
codes for Part B services based on our assessment against the following
standards:
We would not exclude any items or services that are--
++ Directly related to the LEJR procedure itself (such as loosening
of the joint prosthesis) or the quality or safety of LEJR care (such as
post-surgical wound infection or venous thromboembolism); and
++ For chronic conditions that may be affected by the LEJR
procedure or post-surgical care (such as diabetes). By this we mean
that where a beneficiary's underlying chronic condition would be
affected by the LEJR procedure, or where the beneficiary's LEJR or
post-LEJR care must be managed differently as a result of the chronic
condition, then those items and services would be related and would be
included in the episode.
We would exclude items and services for--
++ Chronic conditions that are generally not affected by the LEJR
procedure or post-surgical care (such as removal of the prostate). By
this we mean that where a beneficiary's underlying chronic condition
would not be affected by the LEJR procedure, or where the beneficiary's
LEJR or post-LEJR care need not be managed differently as a result of
the chronic condition, then those items and services would not be
related and would not be included in the episode; and
++ Acute clinical conditions not arising from existing episode-
related chronic clinical conditions or complications of LEJR surgery
from the episode (such as appendectomy).
We would post the potential revised exclusions, which could include
additions to or deletions from the exclusions list, to the CMS Web site
to allow for public input on our planned application of these
standards, and then adopt changes to the exclusions list with posting
to the CMS Web site of the final revised exclusions list after our
consideration of the public input.
We seek comment on our proposals for identifying excluded
readmissions and Part B-covered items and services, as well as our
proposed process for updating the exclusions list.
3. Duration of Episodes of Care
a. Beginning the Episode and Beneficiary Care Inclusion Criteria
While we propose to identify LEJR episodes by an acute care
hospitalization for MS-DRG 469 and 470, we recognize that the
beneficiary's care for an underlying chronic condition, such as
osteoarthritis, which ultimately leads to the surgical procedure,
typically begins months to years prior to the surgical procedure.
Because of the clinical variability leading up to the joint replacement
surgery and the challenge of identifying unrelated services given the
multiple chronic conditions experienced by many beneficiaries, we do
not propose to begin the episode prior to the anchor hospitalization
(that is, the admission that results in a discharge under MS-DRG 469 or
470). We believe the opportunities for care redesign and improved
efficiency prior to the inpatient hospital stay are limited for an
episode payment model of this type that focuses on a surgical procedure
and the associated recovery once the decision to pursue surgery has
been made, rather than an episode model that focuses on decision-making
and management of a clinical condition itself (such as osteoarthritis).
We propose to begin the episode with an inpatient anchor
hospitalization for MS-DRG 469 or MS-DRG 470 in accordance with the
methodology described. This proposal to begin the episode upon
admission for the anchor hospitalization is consistent with LEJR
episode initiation under Model 2 of BPCI. While we are not proposing to
begin the episode prior to the inpatient hospital admission, we note
that our proposed episode definition includes all services that are
already included in the IPPS payment based on established Medicare
policies, such as diagnostic services (including clinical diagnostic
laboratory tests) and nondiagnostic outpatient services related to a
beneficiary's hospital admission provided to a beneficiary by the
admitting hospital, or by an entity wholly owned or wholly operated by
the admitting hospital (or by another entity under arrangements with
the admitting hospital), within 3 days prior to and including the date
of the beneficiary's admission. For more
[[Page 41216]]
information on the 3-Day Payment Window payment policies, see CMS Pub.
100-04, Chapter 3, section 40.3 and Chapter 4, section 10.12.
We propose that the defined population of Medicare beneficiaries
whose care will be included in CCJR meet the following criteria upon
admission to the anchor hospitalization. We note that these criteria
are also consistent with Model 2 of BPCI, as well as most other
Innovation Center models that do not target a specific subpopulation of
beneficiaries. The LEJR episodes for all beneficiaries in the defined
population will be included in CCJR (although certain episodes may be
canceled for purposes of determining actual episode payments for
reasons discussed later in this proposed rule), and we refer readers to
section I.B.8 of this proposed rule for further discussion of
beneficiary notification and a beneficiary's ongoing right under CCJR
to obtain health services from any individual or organization qualified
to participate in the Medicare program.
The beneficiary is enrolled in Medicare Part A and Part B
throughout the duration of the episode.
The beneficiary's eligibility for Medicare is not on the
basis of End Stage Renal Disease.
The beneficiary must not be enrolled in any managed care
plan (for example, Medicare Advantage, Health Care Prepayment Plans,
cost-based health maintenance organizations).
The beneficiary must not be covered under a United Mine
Workers of America health plan, which provides healthcare benefits for
retired mine workers.
Medicare must be the primary payer.
Our proposal for inclusion of beneficiaries in CCJR is as broad as
feasible, representing all those LEJR episodes for which we believe we
have comprehensive historical Medicare payment data that allow us to
appropriately include Medicare payment for all related services during
the episode in order to set appropriate episode target prices. For
beneficiaries whose care we propose to exclude from the model, we are
unable to capture or appropriately attribute to the episode the related
Medicare payments because of Medicare's payment methodology. For
example, if a beneficiary is enrolled in a Medicare Advantage plan,
Medicare makes capitated payments (and providers do not submit complete
claims data to CMS), so we would not have a way to identify and
attribute the portion of those payments related to an LEJR episode.
More information on setting bundled payment target prices for episodes
under CCJR is available in section III.C.4.b of this proposed rule.
Including the broadest feasible array of Medicare beneficiaries'
admissions in the model would provide CMS with the most robust
information about the effects of this model on expenditures and quality
for beneficiaries of the widest variety of ages and comorbidities, and
allow the participant hospitals the greatest opportunity to benefit
financially from systematic episode care redesign because most Medicare
beneficiaries undergoing an LEJR procedure will be included in the
model and, therefore, subject to the policies we propose.
We seek comment on our proposal on when to begin the CCJR episode,
as well as to identify the care included for beneficiaries.
b. Middle of the Episode
We propose that once the episode begins for a beneficiary whose
care is included, the episode continues until the end as described in
the next section of this proposed rule, unless the episode is cancelled
because the beneficiary no longer meets the same inclusion criteria
proposed for the beginning of the episode at any point during the
episode. When an episode is cancelled, the services furnished to
beneficiaries prior to and following the episode cancellation will
continue to be paid by Medicare as usual but we will not calculate
actual episode spending that would otherwise under CCJR be reconciled
against the target price for the beneficiary's care (see section
III.C.6 of this proposed rule). As discussed in section III.C.10.a.(3)
of this proposed rule with comment period, waivers of program rules
applicable to beneficiaries in CCJR episodes would apply to the care of
beneficiaries who are in CCJR episodes at the time when the waiver is
used to bill for a service that is furnished to the beneficiary, even
if the episode is later cancelled.
We believe it would be appropriate to cancel the episode when a
beneficiary's status changes during the episode such that they no
longer meet the criteria for inclusion because the episode target price
reflects full payment for the episode, yet we would not have full
Medicare episode payment data for the beneficiary to reconcile against
the target price.
In addition, we propose that the following circumstances would also
cancel the episode:
The beneficiary is readmitted to an acute care hospital
during the episode and discharged under MS-DRG 469 or 470 (in this
case, the first episode would be cancelled and a new LEJR episode would
begin for the beneficiary).
The beneficiary dies during the anchor hospitalization.
The beneficiary initiates an LEJR episode under BPCI
Models 1, 2, 3 or 4.
In the case of beneficiary death during the anchor hospitalization,
we believe it would be appropriate to cancel the episode as there are
limited efficiencies that could be expected during the anchor hospital
stay itself. In the case of beneficiary readmission during the first
CCJR episode for another LEJR (typically a planned staged second
procedure), we do not believe it would be appropriate to include two
episodes in the model with some time periods overlapping, as that could
result in attribution of the Medicare payment for 2 periods of PAC to a
single procedure.
We seek comment on our proposals to cancel episodes once they have
begun but prior to their end.
c. End of the Episode
LEJR procedures are typically major inpatient surgical procedures
with significant associated morbidity and a prolonged recovery period
that often is marked by significant PAC needs, potential complications
of surgery, and more intense management of chronic conditions that may
be destabilized by the surgery. In light of the course of recovery from
LEJRs for Medicare beneficiaries, we propose that an episode in the
CCJR model end 90 days after discharge from the acute care hospital in
which the anchor hospitalization (for MS-DRG 469 or 470) took place.
Hereinafter, we refer to the proposed CCJR model episode duration as
the ``90-day post-discharge'' episode. To the extent that a Medicare
payment for included services spans a period of care that extends
beyond the episode duration, these payments would be prorated so that
only the portion attributable to care during the fixed duration of the
episode is attributed to the episode spending.
We note for the vast majority of beneficiaries undergoing a hip or
knee joint replacement, a 90-day post-discharge episode duration
encompasses the full transition from acute care and PAC to recovery and
return to activities. We believe the 90-day post-discharge episode
duration encourages acute care hospitals, physicians, and PAC providers
to promote coordinated, quality care as the patient transitions from
the inpatient to outpatient settings and the community.
In proposing the 90-day post-discharge duration for LEJR episodes
in CCJR, we took into consideration the literature regarding the
clinical
[[Page 41217]]
experiences of patients who have undergone THA or TKA procedures. In
2007-2008, the 30-day all-cause readmission rate for primary THA among
Medicare beneficiaries was 8.5 percent, while the 90-day all-cause
readmission rate was 11.9 percent, indicating that while the rate of
readmission begins to taper after 30 days, readmissions continue to
accrue throughout this 90 day window.\6\ In single center studies,
Schairer et al found unplanned 30-day hospital readmission rates were
3.5 percent and 3.4 percent and unplanned 90-day hospital admission
rates were 4.5 percent and 6 percent for primary THA and TKA,
respectively, demonstrating that the risk of readmission remains
significantly elevated from 30 through 90 days post-hospital
discharge.7 8 Further exploring the reasons for unplanned
admission for TKAs within 90 days of a knee replacement procedure,
Schairer et al found that 75 percent were caused by surgical causes
such as arthrofibrosis and surgical site infection. Additional
information on the common reasons for hospital readmission following
TKA or THA can be obtained from The American College of Surgeons
National Surgical Quality Improvement Program.\9\ These data identified
the top ten reasons for readmission within 30 days of a hip or knee
arthroplasty:
---------------------------------------------------------------------------
\6\ Cram P, Lu X, Kates SL, Singh JA, Li Y, Wolf BR. Total Knee
Arthroplasty Volume, Utilization, and Outcomes Among Medicare
Beneficiaries, 1 991-2010. JAMA. 2012;308(12):1227-1236.
doi:10.1001/2012.jama.11153.
\7\ Schairer WW, et al. Causes and frequency of unplanned
hospital readmission after total hip arthroplasty. Clin Orthop Relat
Res. 2014 Feb;472(2):464-70. doi: 1 0.1007/s11999-013-3121-5.
\8\ Schairer WW, et al. What are the rates and causes of
hospital readmission after total knee arthroplasty? Clin Orthop
Relat Res. 2014 Jan;472(1):181-7. doi: 1 0.1007/s11999-013-3030-7.
\9\ Merkow RP, Ju MH, Chung JW, et al. Underlying Reasons
Associated With Hospital Readmission Following Surgery in the United
States. JAMA. 2015;313(5):483-495. doi:10.1001/jama.2014.18614.
---------------------------------------------------------------------------
Surgical site infections (18.8 percent).
Prosthesis issues (7.5 percent).
Venous thromboembolism (6.3 percent).
Bleeding (6.3 percent).
Orthopedic related (5.1 percent).
Pulmonary (3.2 percent).
Cardiac (2.4 percent).
CNS or CVA (2.4 percent).
Ileus or Obstruction (2.3 percent).
Sepsis (2.1 percent).
In addition, the authors concluded that ``readmissions after
surgery were associated with new post-discharge complications related
to the procedure and not exacerbation of prior index hospitalization
complications, suggesting that readmissions after surgery are a measure
of post-discharge complications.'' Finally, with regard to the
potential for readmission for joint replacement revision within a 90-
day post-discharge episode, in a twelve-year study on Medicare patients
conducted by Katz, et al., the risk of revision after THA remained
elevated at approximately 2 percent per year for the first eighteen
months and then 1 percent per year for the remainder of the follow-up
period.\10\ This study suggests that a longer episode, as opposed to a
shorter episode, is more likely to simulate the increased risk of
revision LEJR patients face.
---------------------------------------------------------------------------
\10\ Katz JN, et al. Twelve-Year Risk of Revision After Primary
Total Hip Replacement in the U.S. Medicare Population. J Bone Joint
Surg Am. 2012 Oct 1 7; 94(20): 1 825-1832. doi: 1 0.2106/
JBJS.K.00569
---------------------------------------------------------------------------
In order to address the complication rates associated with elective
primary total hip or knee arthroplasty, we developed an administrative
claims- based measure (for a detailed description of the measure see
section III.D of this proposed rule). During the development of the
Hospital-level Risk-Standardized Complication Rate (RSCR) following
elective primary THA or TKA or both, complications of elective primary
total hip or knee replacement were identified to occur within specific
timeframes.\11\ For example, analyses done during the development of
the measure as well as Technical Expert Panel opinion found that--(1)
mechanical complications and periprosthetic joint infection/wound
infection are still attributable to the procedure for the 90 days
following admission for surgery; (2) death, surgical site bleeding, and
pulmonary embolism are still likely attributable to the hospital
performing the procedure for up to 30 days; and (3) medical
complications of acute myocardial infarction (AMI), pneumonia, and
sepsis/septicemia/shock are more likely to be attributable to the
procedure for up to 7 days.
---------------------------------------------------------------------------
\11\ Hospital Quality Initiatives. Measure Methodology.
Available at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html. See Hip and Knee Arthroplasty Complications zip
file under downloads. Accessed on April 10, 2015.
---------------------------------------------------------------------------
Other factors further supporting a 90-day post-discharge episode
duration are the elevated risk of readmission throughout this time
period, as well as the fact that treatment for pneumonia is considered
by American Thoracic Society guidelines to be ``health care-
associated'' if it occurs up to 90 days following an acute care
hospitalization of at least 2 days.\12\ According to the American
Academy of Orthopedic Surgeons, patients undergoing total hip
replacement should be able to resume most normal light activities of
daily living within 3 to 6 weeks following surgery.\13\ In a small
randomized controlled trial of two approaches to hip arthroplasty,
average time to ambulation without any assistive device was 22-28
days.\14\ According to a 2011 systematic review of studies evaluating
physical functioning following THA, patients have recovered to about 80
percent of the levels of controls by 8 months after surgery.\15\
---------------------------------------------------------------------------
\12\ Guidelines for the management of adults with hospital-
acquired, ventilator-associated, and healthcare-associated
pneumonia. American Thoracic Society, Infectious Diseases Society of
America. Am J Respir Crit Care Med. 2005;171(4):388.
\13\ http://orthoinfo.aaos.org/topic.cfm?topic=A00377.
\14\ Taunton MJ, et al. Direct Anterior Total Hip Arthroplasty
Yields More Rapid Voluntary Cessation of All Walking Aids: A
Prospective, Randomized Clinical Trial The Journal of Arthroplasty.
Volume 29, Issue 9, Supplement, September 2014, Pages 169-172.
\15\ Vissers MM, et al. Recovery of Physical Functioning After
Total Hip Arthroplasty: Systematic Review and Meta-Analysis of the
Literature. Physical Therapy May 2011 vol. 91 no. 5 615-629.
---------------------------------------------------------------------------
We also refer readers to a study by the Assistant Secretary for
Planning and Evaluation (ASPE) in the U.S Department of Health and
Human Services that assessed the mean payments for acute care, PAC, and
physician services grouped in the MS-DRG 470.\16\ In this study, CMS
payment for services following an MS-DRG 470 hospitalization were
concentrated within the first 30 days following discharge, with
plateauing of payments between 60- or 90-days post-discharge.
---------------------------------------------------------------------------
\16\ Post-Acute Care Episodes Expanded Analytic File. Assistant
Secretary for Planning and Evaluation. U.S. Department of Health and
Human Services. April 2011.
---------------------------------------------------------------------------
[[Page 41218]]
[GRAPHIC] [TIFF OMITTED] TP14JY15.000
Finally, payment and length of stay analyses found the average
length of stay in PAC during a 90-day post-discharge episode for MS-DRG
470 to be 47.3 days, indicating that a longer period post-discharge of
90 days is reasonable as a proposal to end the episode of care.\17\ We
note that these analyses did not include any time between hospital
discharge and the start of PAC.
---------------------------------------------------------------------------
\17\ Analysis of Post Acute Care Episode Definitions File.
http://innovation.cms.gov/initiatives/bundled-payments/learning-area.html.
Table 5--Cost and Length of Stay Statistics for MS-DRG 470 for Various Episode Durations
----------------------------------------------------------------------------------------------------------------
Statistics for DRG 470 (2006 data) 30-day episode 60-day episode 90-day episode
----------------------------------------------------------------------------------------------------------------
Mean Medicare spending per hospital $18,838................ $20,343................ $21,125
discharge.
(acute+PAC+physician)................
Mean payment for anchor 10,463................. 10,463................. 10,463
hospitalization.
Mean payment for PAC................. 6,835.................. 8,339.................. 9,122
Mean payment for physicians (during 1,540.................. 1,540.................. 1,540
anchor hospitalization).
Mean payment for readmission 550.................... 929.................... 1,242
(includes all PAC users, even if no
readmission occurs during the
episode).
Mean length of stay (LOS) for PAC.... 25.5 days.............. 39.6 days.............. 47.3 days
----------------------------------------------------------------------------------------------------------------
Note: Data are per PAC user (88% of beneficiaries hospitalized under MS-DRG 470 are discharged to PAC). PAC
users are defined as beneficiaries discharged to SNF, IRF, or LTCH within 5 days of discharge from the index
acute hospitalization, or discharged to HHA or hospital outpatient therapy within 14 days of discharge from
the index acute hospitalization. Mean LOS for PAC does not include any gap between hospital discharge date and
start of PAC.
Other tests of bundled payment models for hip and knee replacement
have used 90-day post-discharge episodes.\18\ We also note that despite
BPCI Model 2 allowing participants a choice between 30-, 60-, or 90-day
post-discharge episodes, over 86 percent of participants have chosen
the 90-day post-discharge episode duration for the LEJR episode.
Further, a 90-day post-discharge episode duration aligns with the 90-
day global period included in the Medicare Physician Fee Schedule
payment for the surgical procedure.
---------------------------------------------------------------------------
\18\ -Ridgely MS, et al. Bundled Payment Fails To Gain A
Foothold In California: The Experience Of The IHA Bundled Payment
Demonstration. Health Affairs, 33, no.8 (2014):1345-1352.
---------------------------------------------------------------------------
We also considered proposing a 60-day post-discharge episode
duration, but the full transition of care following LEJR would exceed
this window for some beneficiaries, especially those who are discharged
to an institutional post-acute provider initially and then
[[Page 41219]]
transition to home health or outpatient therapy services for continued
rehabilitation. According to a report from ASPE on Medicare
beneficiaries receiving PAC following major joint replacement in 2006,
13 percent first receive SNF services and then receive HHA services--
with a total mean episode duration of 56.8 days.\19\ An additional 9.2
percent receive HHA services first and then receive outpatient therapy
services--with a total mean episode duration of 78.7 days. Finally, 6.7
percent receive IRF services first and then HHA services (total mean
length of stay 55.3 days), and 4.8 percent receive SNF services first
and then outpatient therapy services (total mean length of stay 71.5
days). The remainder only receives one type of PAC.
---------------------------------------------------------------------------
\19\ Examining Post Acute Care Relationships in an Integrated
Hospital. Assistant Secretary for Planning and Evaluation. U.S.
Department of Health and Human Services. February 2009.
---------------------------------------------------------------------------
Therefore, in order to be inclusive of most possible durations of
recovery, and services furnished to reach recovery, we propose the 90-
day post-discharge episode duration for CCJR. We believe that
beneficiaries will benefit from aggressive management and care
coordination throughout this episode duration, and hospitals will have
opportunities under CCJR to achieve efficiencies from care redesign
during the 90-day post-discharge episode period.
We seek comment on our proposal to end the episode 90 days after
the date of discharge from the anchor hospitalization, as well as on
the alternative we considered of ending the CCJR episode 60 days after
the date of discharge.
In accordance with section 1115A of the Act, we are proposing to
codify these proposals in regulation in the new proposed Part 510.
C. Proposed Methodology for Setting Episode Prices and Paying Model
Participants under the CCJR Model
1. Background
As described in section II.B of this proposed rule, we propose to
use the CCJR episode payment model to incentivize participant hospitals
to work with other health care providers to improve quality of care for
Medicare beneficiaries undergoing LEJR procedures and post-operative
recovery, while enhancing the efficiency with which that care is
provided. We propose to apply this incentive by paying participant
hospitals or holding them responsible for repaying Medicare based on
their CCJR episode quality and Medicare expenditure performance. The
following sections describe our proposals for--
How CCJR episodes would be attributed to a participant
hospital;
How the reconciliation of Medicare expenditures based on
actual episode spending in relation to the target price would be
structured and operationalized;
How Medicare actual episode payments under existing
payment systems would be compared against episode target prices;
How hospital quality of care for CCJR episodes would be
compared against quality thresholds Medicare establishes under this
model;
How payments to or repayment amounts from participant
hospitals would be determined so that, on average, the episode target
prices are paid by Medicare for CCJR episodes; and
What protections from excessive risk due to high payment
cases would be in place for participant hospitals.
2. Performance Years, Retrospective Episode Payment, and Two-sided Risk
Model
a. Performance Period
We propose that the CCJR model would have 5 performance years. The
performance years would align with calendar years, beginning January 1,
2016. Table 6 includes details on which episodes would be included in
each of the 5 performance years.
Table 6--Performance Years for CCJR Model
------------------------------------------------------------------------
Episodes included in
Performance year Calendar year performance year
------------------------------------------------------------------------
1............................. 2016 Episodes that start
on or after January
1, 2016, and end on
or before December
31, 2016.
2............................. 2017 Episodes that end
between January 1,
2017, and December
31, 2017, inclusive.
3............................. 2018 Episodes that end
between January 1,
2018, and December
31, 2018, inclusive.
4............................. 2019 Episodes that end
between January 1,
2019, and December
31, 2019, inclusive.
5............................. 2020 Episodes that end
between January 1,
2020, and December
31, 2020, inclusive.
------------------------------------------------------------------------
All episodes tested in this model will begin on or after January 1,
2016 and end on or before December 31, 2020. We note that this
definition results in performance year 1 being shorter than the later
performance years in terms of the length of time over which an anchor
hospitalization could occur under the model. We also note that some
episodes that begin in a given calendar year may be captured in the
following performance year due to the episodes ending after December
31st (for example, episode beginning in December 2016 and ending in
March 2017 would be part of performance year 2). We believe 5 years
would be sufficient time to test the CCJR model and gather sufficient
data to evaluate whether it improves the efficiency and quality of care
for an LEJR episode of care. Having fewer than 5 performance years may
not provide sufficient time or data for evaluation. The 5-year
performance period is consistent with the performance period used for
other CMMI models (for example, the Pioneer Accountable Care
Organization (ACO) Model).
b. Proposed Retrospective Payment Methodology
As described in section III.B of this proposed rule, we propose
that an episode in the CCJR model begins with the admission for an
anchor hospitalization and ends 90 days post-discharge from the anchor
hospitalization, including all related services covered under Medicare
Parts A and B during this timeframe, with limited exclusions and
adjustments, as described in sections III.B, III.C.3, and III.C.7 of
this proposed rule. The
[[Page 41220]]
episodes would be attributed to the participant hospital where the
anchor hospitalization occurred.
We propose to apply the CCJR episode payment methodology
retrospectively. Under this proposal, all providers and suppliers
caring for Medicare beneficiaries in CCJR episodes would continue to
bill and be paid as usual under the applicable Medicare payment system.
After the completion of a CCJR performance year, Medicare claims for
services furnished to beneficiaries in that year's non-cancelled
episodes would be grouped into episodes and aggregated, and participant
hospitals' CCJR episode quality and actual payment performance would be
assessed and compared against episode quality thresholds and target
prices, as described in sections III.C.5 and III.C.4 of this proposed
rule, respectively. After the participant hospitals' actual episode
performance in quality and spending are compared against the
aforementioned episode quality thresholds and target prices, we would
determine if Medicare would make a payment to the hospital
(reconciliation payments), or if the hospital owes money to Medicare
(resulting in Medicare repayment). The possibility for hospitals to
receive reconciliation payments or be subject to repayment (note:
participant hospitals would not be subject to repayment for performance
year 1) is further discussed in section III.C.2.c. of this proposed
rule.
We considered an alternative option of paying for episodes
prospectively by paying one lump sum amount to the hospital for the
expected costs of the 90-day episode. However, we believe such an
option would be challenging to implement at this time given the payment
infrastructure changes for both hospitals and Medicare that would need
to be developed to pay and manage prospective CCJR episode payments. We
note that a retrospective episode payment approach is currently being
utilized under BPCI Model 2. We believe that a retrospective payment
approach can accomplish the objective of testing episode payment in a
broad group of hospitals, including financial incentives to streamline
care delivery around that episode, without requiring core billing and
payment changes by providers and suppliers, which would create
substantial administrative burden. However, we seek comment on
potential ways to implement a prospective payment approach for CCJR in
future performance years of the model.
c. Proposed Two-Sided Risk Model
We propose to establish a two-sided risk model for hospitals
participating in the CCJR model. We propose to provide episode
reconciliation payments to hospitals that meet or exceed quality
performance thresholds and achieve cost efficiencies relative to CCJR
target prices established for them, as defined later in sections
III.C.4 and III.C.5 of this proposed rule. Similarly, we propose to
hold hospitals responsible for repaying Medicare when actual episode
payments exceed their CCJR target prices in each of performance years 2
through 5, subject to certain proposed limitations discussed in section
III.C.8 of this proposed rule. Target prices would be established for
each participant hospital for each performance year.
We propose that hospitals will be eligible to receive
reconciliation payments from Medicare based on their quality and actual
episode spending performance under the CCJR model in each of CCJR
performance years 1 through 5. Additionally, we propose to phase in the
responsibility for hospital repayment of episode actual spending if
episode actual spending exceeds their target price starting in
performance year 2 and continuing through performance year 5. Under
this proposal in performance year 1, participant hospitals would not be
required to pay Medicare back if episode actual spending is greater
than the target price.
We considered an episode payment structure in which, for all 5
performance years of the model, participant hospitals would qualify for
reconciliation payments if episode actual spending was less than the
episode target price, but would not be required to make repayments to
Medicare if episode actual spending was greater than the episode target
price. However, we believe not holding hospitals responsible for
repaying excess episode spending would reduce the incentives for
hospitals to improve quality and efficiency. We also considered
starting the CCJR payment model with hospital responsibility for
repaying excess episode spending in performance year 1 to more strongly
align participant hospital incentives with care quality and efficiency.
However, we believe hospitals may need to make infrastructure, care
coordination and delivery, and financial preparations for the CCJR
episode model, and that those changes can take several months or longer
to implement. With this consideration in mind, we propose to begin
hospitals' responsibility for repayment of excess episode spending
beginning in performance year 2 to afford hospitals time to prepare,
while still beginning some incentives earlier (that is, reconciliation
payments in year 1) to improve quality and efficiency of care for
Medicare beneficiaries. We solicit comment on the proposed incentive
structure for CCJR.
In an effort to further ensure hospital readiness to assume
responsibility for circumstances that could lead to a hospital repaying
to Medicare actual episode payments that exceed the episode target
price, we propose to begin to phase in this responsibility for
performance year 2, with full responsibility for excess episode
spending (as proposed in this rule) applied for performance year 3
through performance year 5. To carry out this ``phase in'' approach, we
propose during the first year of any hospital financial responsibility
for repayment (performance year 2) to set an episode target price that
partly mitigates the amount that hospitals would be required to repay
(see section III.C.4.b of this proposed rule), as well as more greatly
limits (as compared to performance years 3 through 5) the maximum
amount a hospital would be required to repay Medicare across all of its
episodes (see section III.C.8 of this proposed rule).
3. Adjustments to Payments Included in Episode
Medicare payments during the model's performance year for Parts A
and B claims for services included in the episode definition, as
discussed in section III.B of this proposed rule, would be summed
together for each non-cancelled CCJR episode that occurred to create
the actual episode payment amount. We propose three adjustments to this
general approach for--(1) special payment provisions under existing
Medicare payment systems; (2) payment for services that straddle the
end of the episode; and (3) high payment episodes. We note there would
be further adjustments to account for overlaps with other Innovation
Center models and CMS programs; we refer readers to section III.C.7 of
this proposed rule.
We do not propose to adjust hospital-specific or regional
components of target prices for any Medicare repayment or
reconciliation payments made under the CCJR model; CCJR repayment and
reconciliation payments would be not be included per the proposed
episode definition in section III.B of this proposed rule. Including
reconciliation payments and Medicare repayments in target price
calculations would perpetuate the initial set of target prices
[[Page 41221]]
once CCJR performance years are captured in the 3- historical-years of
data used to set target prices, as proposed in section III.C.4. of this
proposed rule, beginning with performance year 3 when performance year
1 would be part of the 3-historical-years. Including any prior
performance years' reconciliations or repayments in target price
calculations would approximately have the effect (excluding impact of
the proposed adjustments for high payment episodes (see section
III.C.3.c. of this proposed rule) and proposed limits or adjustments to
hospital financial responsibility (see section III.C.8. of this
proposed rule)) of Medicare paying hospitals the target price,
regardless of whether the hospital went below, above, or met the target
price in the prior performance years before accounting for the
reconciliation payments or repayments. We intend for target prices to
be based on historical patterns of service actually provided, so we do
not propose to include reconciliation payments or repayments for prior
performance years in target price calculations.
a. Proposed Treatment of Special Payment Provisions Under Existing
Medicare Payment Systems
Many of the existing Medicare payment systems have special payment
provisions that have been created by regulation or statute to improve
quality and efficiency in service delivery. IPPS hospitals are subject
to incentives under the HRRP, the Hospital Value-Based Purchasing
(HVBP) Program, the Hospital-Acquired Condition (HAC) Reduction
Program, and the Hospital Inpatient Quality Reporting Program (HIQR)
and Outpatient Quality Reporting Program (OQR). IPPS hospitals and CAHs
are subject to the Medicare EHR Incentive Program. Additionally, the
majority of IPPS hospitals receive additional payments for Medicare
Disproportionate Share Hospital (DSH) and Uncompensated Care, and IPPS
teaching hospitals can receive additional payments for Indirect Medical
Education (IME). IPPS hospitals that meet a certain requirements
related to low volume Medicare discharges and distance from another
hospital receive a low volume add-on payment. As mentioned in section
III.B.2.b of this proposed rule, acute care hospitals may receive new
technology add-on payments to support specific new technologies or
services that substantially improve the diagnosis or treatment of
Medicare beneficiaries and would be inadequately paid otherwise under
the MS-DRG system. Also, some IPPS hospitals qualify to be sole
community hospitals (SCHs) or Medicare-dependent hospitals (MDHs), and
they may receive enhanced payments based on cost-based hospital-
specific rates for services; whether a SCH or MDH receives enhanced
payments may vary year to year, in accordance with Sec. Sec. 419.43(g)
and 412.108(g), respectively.
Medicare payments to providers of post-acute services, including
IRFs, SNFs, IPFs, HHAs, LTCHs, and hospice facilities, are conditioned,
in part, on whether the provider satisfactorily reports certain
specified data to CMS: the Inpatient Rehabilitation Facility Quality
Reporting Program (IRF QRP), the Skilled Nursing Facility Quality
Reporting Program (SNF QRP), the Inpatient Psychiatric Facility Quality
Reporting Program (IPF QRP), the Home Health Quality Reporting Program
(HH QRP), the Long-Term Care Hospital Quality Reporting Program (LTCH
QRP), and the Hospice Quality Reporting Program. Additionally, IRFs
located in rural areas receive rural add-on payments, IRFs serving
higher proportions of low-income beneficiaries receive increased
payments according to their low-income percentage (LIP), and IRFs with
teaching programs receive increased payments to reflect their teaching
status. SNFs receive higher payments for treating beneficiaries with
human immunodeficiency virus (HIV). HHAs located in rural areas also
receive rural add-on payments.
Ambulatory Surgical Centers have their own Quality Reporting
Program (ASC QRP). Physicians also have a set of special payment
provisions based on quality and reporting: the Medicare EHR Incentive
Program for Eligible Professionals, the Physician Quality Reporting
System (PQRS), and the Physician Value-based Modifier Program.
The intent of the CCJR model is not to replace the various existing
incentive programs or add-on payments, but instead to test further
episode payment incentives towards improvements in quality and
efficiency beyond Medicare's existing policies. Therefore, we propose
that the hospital performance and potential reconciliation payment or
Medicare repayment be independent of, and not affect, these other
special payment provisions.
We propose to exclude the special payment provisions as discussed
previously when calculating actual episode payments, setting episode
target prices, comparing actual episode payments with target prices,
and determining whether a reconciliation payment should be made to the
hospital or funds should be repaid by the hospital.
Not excluding these special payment provisions would create
incentives that are not aligned with the intent of the CCJR model. Not
excluding the quality and reporting-related special payment provisions
could create situations where a high-quality or reporting compliant
hospital or both receiving incentive payments, or those hospitals that
discharge patients to PAC providers that receive incentives for being
reporting compliant, may appear to be ``high episode payment'' under
CCJR. Conversely, lower quality or hospitals not complying with
reporting programs or both that incur payment reduction penalties, or
hospitals that discharge to PAC providers that are not reporting
compliant, may appear to be ``low episode payment'' under CCJR. Such
outcomes would run counter to CCJR's goal of improving quality. Also,
not excluding add-on payments for serving more indigent patients,
having low Medicare hospital volume, being located in a rural area,
supporting greater levels of provider training, choosing to use new
technologies, and having a greater proportion of CCJR beneficiaries
with HIV from CCJR actual episode payment calculations may
inappropriately result in hospitals having worse episode payment
performance. Additionally, not excluding enhanced payments for MDHs and
SCHs may result in higher or lower target prices just because these
hospitals received their enhanced payments in one historical year but
not the other, regardless of actual utilization. We believe the
proposed approach of excluding special payment provisions would ensure
a participant hospital's actual episode payment performance is not
artificially improved or worsened because of payment reduction
penalties or incentives or enhanced or add-on payments, the effects of
which we are not proposing to test with CCJR.
In addition to the various incentive, enhanced, and add on
payments, sequestration came into effect for Medicare payments for
discharges on or after April 1, 2013, per the Budget Control Act of
2011 and delayed by the American Taxpayer Relief Act of 2012.
Sequestration applies a 2 percent reduction to Medicare payment for
most Medicare FFS services. Similar to the previously discussed
incentive, enhanced, and add-on payments, we intend CCJR to be
independent of the introduction and potential future elimination of
sequestration. We do not intend to have participant hospitals' episodes
appear to be ``low payment''
[[Page 41222]]
episodes relative to historical data, for part of which sequestration
may not have been in effect, just because of an across-the-board
Medicare payment reduction through sequestration. Therefore, we propose
to account for the effects of sequestration when calculating actual
episode payments, setting episode target prices, comparing actual
episode payments with target prices, and determining whether a
reconciliation payment should be made to the hospital or hospitals
should repay Medicare.
In order to operationalize the exclusion of the various special
payment provisions in calculating episode expenditures, we propose to
apply the CMS Price (Payment) Standardization Detailed Methodology
described on the QualityNet Web site at http://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228772057350. This pricing standardization approach is the same as used for
the HVBP program's Medicare spending per beneficiary metric.
We solicit comment on this proposed approach to treating special
payment provisions in the various Medicare payment systems.
b. Proposed Treatment of Payment for Services That Extend Beyond the
Episode
As we proposed a fixed 90-day post-discharge episode as discussed
in section III.B of this proposed rule, we believe there would be some
instances where a service included in the episode begins during the
episode but concludes after the end of the episode and for which
Medicare makes a single payment under an existing payment system. An
example would be a beneficiary in a CCJR episode who is admitted to a
SNF for 15 days, beginning on Day 86 post-discharge from the anchor
CCJR hospitalization. The first 5 days of the admission would fall
within the episode, while the subsequent 10 days would fall outside of
the episode.
We propose that, to the extent that a Medicare payment for included
episode services spans a period of care that extends beyond the
episode, these payments would be prorated so that only the portion
attributable to care during the episode is attributed to the episode
payment when calculating actual Medicare payment for the episode. For
non-IPPS inpatient hospital (for example, CAH) and inpatient PAC (for
example, SNF, IRF, LTCH, IPF) services, we propose to prorate payments
based on the percentage of actual length of stay (in days) that falls
within the episode window. Prorated payments would also be similarly
allocated to the 30-day post-episode payment calculation in section
III.C.8.e. of this proposed rule. In the prior example, one-third of
the days in the 15-day length of stay would fall within the episode
window, so under the proposed approach, one-third of the SNF payment
would be included in the episode payment calculation, and the remaining
two-thirds (because the entirety of the remaining payments fall within
the 30 days after the episode ended) would be included in the post-
episode payment calculation.
For HHA services that extend beyond the episode, we propose that
the payment proration be based on the percentage of days, starting with
the first billable service date (``start of care date'') and through
and including the last billable service date, that fall within the CCJR
episode. Prorated payments would also be similarly allocated to the 30-
day post-episode payment calculation in section III.C.8.e of this
proposed rule. For example, if the patient started receiving services
from an HHA on day 86 after discharge from the anchor CCJR
hospitalization and the last billable home health service date was 55
days from the start of home health care date, the HHA claim payment
amount would be divided by 55 and then multiplied by the days (5) that
fell within the CCJR episode. The resulting, prorated HHA claim payment
amount would be considered part of the CCJR episode. Services for the
prorated HHA service would also span the entirety of the 30 days after
the CCJR episode spends, so the result of the following calculation
would be included in the 30-day post-episode payment calculation: HHA
claim payment amount divided by 55 and then multiplied by 30 days (the
number of days in the 30-day post-episode period that fall within the
prorated HHA service dates).
There may also be instances where home health services begin prior
to the CCJR episode start date, but end during the CCJR episode. In
such instances, we would also prorate HHA payments based on the
percentage of days that fell within the episode. Because these services
end during the CCJR episode, prorated payments for these services would
not be included in the 30-day post-episode payment calculation
discussed in section III.C.8.e. of this proposed rule. For example, if
the patient's start of care date for a home health 60-day claim was
February 1, the anchor hospitalization was March 1 through March 4
(with the CCJR episode continuing for 90 days after March 4), and the
patient resumed home care on March 5 with the 60-day home health claim
ending on April 1 (that is, April 1 was the last billable service
date), we would divide the 60-day home health claim payment amount by
60 and then multiply that amount by the days from the CCJR admission
through April 1 (32 days) to prorate the HHA payment. This proposed
prorating method for HHA claims is consistent with how partial episode
payments (PEP) are paid for on home health claims.
For IPPS services that extend beyond the episode (for example,
readmissions included in the episode definition), we propose to
separately prorate the IPPS claim amount from episode target price and
actual episode payment calculations as proposed in section III.C.8 of
this proposed rule, called the normal MS-DRG payment amount for
purposes of this proposed rule. The normal MS-DRG payment amount would
be pro-rated based on the geometric mean length of stay, comparable to
the calculation under the IPPS PAC transfer policy at Sec. Sec.
412.4(f) and as published on an annual basis in Table 5 of the IPPS/
LTCH PPS Final Rules. Consistent with the IPPS PAC transfer policy, the
first day for a subset of MS-DRGs (indicated in Table 5 of the IPPS/
LTCH PPS Final Rules) would be doubly weighted to count as 2 days to
account for likely higher hospital costs incurred at the beginning of
an admission. If the actual length of stay that occurred during the
episode is equal to or greater than the MS-DRG geometric mean, the
normal MS-DRG payment would be fully allocated to the episode. If the
actual length of stay that occurred during the episode is less than the
geometric mean, the normal MS-DRG payment amount would be allocated to
the episode based on the number of inpatient days that fall within the
episode. If the full amount is not allocated to the episode, any
remainder amount would be allocated to the 30 day post-episode payment
calculation discussed in section III.C.8.e of this proposed rule. The
proposed approach for prorating the normal MS-DRG payment amount is
consistent with the IPPS transfer per diem methodology.
The following is an example of prorating for IPPS services that
extend beyond the episode. If beneficiary has a readmission for MS-DRG
493--lower extremity and humerus procedures except hip, foot, and
femur, with complications--into an IPPS hospital on the 89th day after
discharge from a CCJR anchor hospitalization, and is subsequently
discharged after a length of stay of 5 days, Medicare payment for this
readmission would be prorated for inclusion in the episode. Based on
Table
[[Page 41223]]
5 of the IPPS/LTCH PPS Final Rule for FY 2015, the geometric mean for
MS-DRG 493 is 4 days, and this MS-DRG is indicated for double-weighting
the first day for proration. This readmission has only 2 days that
falls within the episode, which is less than the MS-DRG 493 geometric
mean of 4 days. Therefore, the normal MS-DRG payment amount associated
with this readmission would be divided by 4 (the geometric mean) and
multiplied by 3 (the first day is counted as 2 days, and the second day
contributes the third day), and the resulting amount is attributed to
the episode. The remainder one-fourth would be captured in the post-
episode spending calculation discussed in section III.C.8 of this
proposed rule. If the readmission occurred on the 85th day after
discharge from the CCJR anchor hospitalization, and the length of stay
was 7 days, the normal MS-DRG payment amount for the admission would be
included in the episode without proration because length of stay for
the readmission falling within the episode (6 days) is greater than or
equal to the geometric mean (4 days) for the MS-DRG.
We considered an alternative option of including the full Medicare
payment for all services that start during the episode, even if those
services did not conclude until after the episode ended, in calculating
episode target prices and actual payments. Previous research on bundled
payments for episodes of PAC services noted that including the full
payment for any claim initiated during the fixed episode period of time
will capture continued service use. However, prorating only captures a
portion of actual service use (and payments) within the bundle. \20\ As
discussed in section III.B of this proposed rule, the CCJR model
proposes an episode length that extends 90 days post-discharge, and
Table 5 in section III.B.3.c. of this proposed rule demonstrates that
the average length of stay in PAC during a 90-day episode with a MS-DRG
470 anchor hospitalization is 47.3 days. Therefore, the length of the
episode under CCJR (90 days) should be sufficient to capture the vast
majority of service use within the episode, even if payments for some
services that extend beyond the episode duration are prorated and only
partly attributed to the episode.
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\20\ http://aspe.hhs.gov/health/reports/09/pacepifinal/report.pdf.
---------------------------------------------------------------------------
c. Proposed Pricing Adjustment for High Payment Episodes
Given the broad proposed LEJR episode definition and 90-day post-
discharge episode duration proposed for CCJR, we want to ensure that
hospitals have some protection from the variable repayment risk for
especially high payment episodes, where the clinical scenarios for
these cases each year may differ significantly and unpredictably. We do
not believe the opportunity for a hospital's systematic care redesign
of LEJR episodes has significant potential to impact the clinical
course of these extremely disparate high payment cases.
The BPCI Model 2 uses a generally similar episode definition as
proposed for CCJR and the vast majority of BPCI episodes being tested
for LEJR are 90 days in duration following discharge from the anchor
hospitalization. Similarly, we believe the BPCI distribution of Model 2
90-day LEJR episode payment amounts as displayed in Figure 1 provides
information that is relevant to policy development regarding CCJR
episodes.
[[Page 41224]]
[GRAPHIC] [TIFF OMITTED] TP14JY15.001
As displayed, the mean episode payment amount is approximately
$26,000. Five percent of all episodes are paid at two standard
deviations above the mean payment or greater, an amount that is
slightly more than 2 times the mean episode payment amount. While these
high payment cases are relatively uncommon, we believe that
incorporation of the full Medicare payment amount for such high payment
episodes in setting the target price and correspondingly in Medicare's
aggregate actual episode payment that is compared to the target price
for the episode may lead in some cases to excessive hospital
responsibility for these episode expenditures. This may be especially
true when hospital responsibility for repayment of excess episode
spending is introduced in performance year 2. The hospital may have
limited ability to moderate spending for these high payment cases. Our
proposal to exclude IPPS new technology add-on payments and separate
payment for clotting factors for the anchor hospitalization from the
episode definition limits excessive financial responsibility under this
model of extremely high inpatient payment cases that could result from
costly hospital care furnished during the anchor hospitalization.
However, we believe an additional pricing adjustment in setting episode
target prices and calculating actual episode payments is necessary to
mitigate the hospital responsibility for the actual episode payments
for high episode payment cases resulting from very high Medicare
spending within the episode during the period after discharge from the
anchor hospitalization, including for PAC, related hospital
readmissions, and other items and services related to the LEJR episode.
Thus, in order to limit the hospital's responsibility for the
aforementioned high episode payment cases, we propose to utilize a
pricing adjustment for high payment episodes that would incorporate a
high payment ceiling at two standard deviations above the mean episode
payment amount in calculating the target price and in comparing actual
episode payments during the performance year to the target prices.
Specifically, when setting target prices, we would first identify
for each anchor MS-DRG in each region (discussed further in section
III.C.4 of this proposed rule) the episode payment amount that is two
standard deviations above the mean payment in the historical dataset
used (discussed further in section III.C.4 of this proposed rule). Any
such identified episode would have its payment capped at the MS-DRG
anchor and region-specific value that is two standard deviations above
the mean, which would be the ceiling for purposes for calculating
target prices. We note that the calculation of the historical episode
high payment ceiling for each region and MS-DRG anchor would be
performed after other steps, including removal of effects of special
payment
[[Page 41225]]
provisions and others described in section III.C.4.c. of this proposed
rule.
When comparing actual episode payments during the performance year
to the target prices, episode payments for episodes in the performance
year would also be capped at two standard deviations above the mean.
The high episode payment ceiling for episodes in a given performance
year would be calculated based on MS-DRG anchor-specific episodes in
each region. We discuss further how the high episode payment ceiling
would be applied when comparing episode payments during the performance
year to target prices in section III.C.6. of this proposed rule.
While this approach generally lowers the target price slightly, it
provides a basis for reducing the hospital's responsibility for actual
episode spending for high episode payment cases during the model
performance years. When performing the reconciliation for a given
performance year of the model, we would array the actual episode
payment amounts for all episodes being tested within a single region,
and identify the regional actual episode payment ceiling at two
standard deviations above the regional mean actual episode payment
amount. If the actual payment for a hospital's episode exceeds this
regional ceiling, we would set the actual episode payment amount to
equal the regional ceiling amount, rather than the actual amount paid
by Medicare, when comparing a hospital's episode spending to the target
price. Thus, a hospital would not be responsible for any actual episode
payment that is greater than the regional ceiling amount for that
performance year. We propose to adopt this policy for all years of the
model, regardless of the reconciliation payment opportunity or
repayment responsibility in a given performance year, to achieve
stability and consistency in the pricing methodology. We believe this
proposal provides reasonable protection for hospitals from undue
financial responsibility for Medicare episode spending related to the
variable and unpredictable course of care of some Medicare
beneficiaries in CCJR episodes, while still fully incentivizing
increased efficiencies for approximately the 95 percent of episodes for
which we estimate actual episode payments to fall below this
ceiling.\21\ We seek comment on our proposal to apply a pricing
adjustment in setting target prices and reconciling actual episode
payments for high payment episodes.
---------------------------------------------------------------------------
\21\ Medicare FFS Parts A and B claims, CCJR episodes as
proposed, between October 1, 2013 and September 30, 2014.
---------------------------------------------------------------------------
4. Proposed Episode Price Setting Methodology
a. Overview
Whether a participant hospital receives reconciliation payments or
is made responsible to repay Medicare for the CCJR model will depend on
the hospital's quality and actual payment performance relative to
episode quality thresholds and target prices. Quality performance and
thresholds are further discussed in section III.C.5. of this proposed
rule, and the remainder of this section will discuss the proposed
approach to establishing target prices.
We propose to establish CCJR target prices for each participant
hospital. For episodes beginning in performance years 1, 3, 4, and 5, a
participant hospital would have eight target prices, one for each of
the following:
MS-DRG 469 anchored episodes that were initiated between
January 1 and September 30 of the performance year, if the participant
hospital successfully submits data on the voluntary patient reported
outcome measure proposed in section III.C.5. of this proposed rule.
MS-DRG 470 anchored episodes that were initiated between
January 1 and September 30 of the performance year, if the participant
hospital successfully submits data on the proposed voluntary patient
reported outcome measure.
MS-DRG 469 anchored episodes that were initiated between
October 1 and December 31 of the performance year, if the participant
hospital successfully submits data on the proposed voluntary patient-
reported outcome measure.
MS-DRG 470 anchored episodes that were initiated between
October 1 and December 31 of the performance year, if the participant
hospital successfully submits data on the proposed voluntary patient-
reported outcome measure.
MS-DRG 469 anchored episodes that were initiated between
January 1 and September 30 of the performance year, if the participant
hospital does not successfully submit data on the voluntary patient-
reported outcome measure.
MS-DRG 470 anchored episodes that were initiated between
January 1 and September 30 of the performance year, if the participant
hospital does not successfully submit data on the proposed voluntary
patient-reported outcome measure.
MS-DRG 469 anchored episodes that were initiated between
October 1 and December 31 of the performance year, if the participant
hospital does not successfully submit data on the proposed voluntary
patient-reported outcome measure.
MS-DRG 470 anchored episodes that were initiated between
October 1 and December 31 of the performance year, if the participant
hospital does not successfully submit data on the proposed voluntary
patient-reported outcome measure.
For episodes beginning in performance year 2, a participant
hospital would have 16 target prices. These would include the same
combinations as for the other 4 performance years, but one set for
determining potential reconciliation payments, and the other for
determining potential Medicare repayment amounts, as part of the
phasing in of two-sided risk discussed later in this section. Further
discussion on our proposals for different target prices for MS-DRG 469
versus MS-DRG 470 anchored episodes, for episodes initiated between
January 1 and September 30 versus October 1 and December 31, and for
participant hospitals that do and do not successfully submit data on
the proposed patient-reported outcome measure can be found in sections
III.C.4.b and III.C.5. of this proposed rule.
We intend to calculate and communicate episode target prices to
participant hospitals prior to the performance period in which they
apply (that is, prior to January 1, 2017, for target prices covering
episodes initiated between January 1 and September 30, 2017; prior to
October 1, 2017 for target prices covering episodes initiated between
October 1 and December 31, 2017). We believe prospectively
communicating prices to hospitals will help them make any
infrastructure, care coordination and delivery, and financial
refinements they may deem appropriate to prepare for the new episode
target prices.
The proposed approach to setting target prices incorporates the
following features:
Set different target prices for episodes anchored by MS-
DRG 469 versus MS-DRG 470 to account for patient and clinical
variations that impact hospitals' cost of providing care.
Use 3 years of historical Medicare payment data grouped
into episodes of care according to the episode definition proposed in
section III.B. of this proposed rule, hereinafter termed historical
CCJR episodes. The specific set of 3- historical-years used would be
updated every other performance year.
[[Page 41226]]
Apply Medicare payment system (for example, IPPS, OPPS,
IRF PPS, SNF, PFS, etc.) updates to the historical episode data to
ensure we incentivize hospitals based on historical utilization and
practice patterns, not Medicare payment system rate changes that are
beyond hospitals' control. Because different Medicare payment system
updates become effective at two different times of the year, we would
calculate separate target prices for episodes initiated between January
1 and September 30 versus October 1 and December 31.
Blend together hospital-specific and regional historical
CCJR episode payments, transitioning from primarily provider-specific
to completely regional pricing over the course of the 5 performance
years, to incentivize both historically efficient and less efficient
hospitals to furnish high quality, efficient care in all years of the
model. Regions would be defined as each of the nine U.S. Census
divisions.
Normalize for provider-specific wage adjustment variations
in Medicare payment systems when combining provider-specific and
regional historical CCJR episodes. Wage adjustments would be reapplied
when determining hospital-specific target prices.
Pool together CCJR episodes anchored by MS DRGs 469 and
470 to use a greater historical CCJR episode volume and set more stable
prices.
Apply a discount factor to serve as Medicare's portion of
reduced expenditures from the CCJR episode, with any remaining portion
of reduced Medicare spending below the target price potentially
available as reconciliation payments to the participant hospital where
the anchor hospitalization occurred.
Further discussion on each of the individual features can be found
in section III.C.4.b. of this proposed rule. In section III.C.4.c. of
this proposed rule, we also provide further details on the proposed
sequential steps to calculate target prices and how each of the pricing
features would fit together.
b. Proposed Pricing Features
(1) Different Target Prices for Episodes Anchored by MS-DRG 469 Versus
MS-DRG 470
For each participant hospital we propose to establish different
target prices for CCJR episodes initiated by MS-DRG 469 versus MS-DRG
470. MS-DRGs under the IPPS account for some of the clinical and
resource variations that exist and that impact hospitals' cost of
providing care. Specifically, MS-DRG 469 is defined to identify, and
provide hospitals a higher Medicare payment to reflect the higher
hospital costs for, hip and knee procedures with major complications or
comorbidities. Therefore, we propose to calculate separate target
prices for each participant hospital for CCJR episodes with MS-DRG 469
versus MS-DRG 470 anchor hospitalizations.
We considered adjusting the episode target prices by making
adjustments or setting different prices based on patient-specific
clinical indicators (for example, comorbidities). However, we do not
believe there is a sufficiently reliable approach that exists suitable
for CCJR episodes beyond MS-DRG-specific pricing, and there is no
current standard on the best approach. At the time of developing this
proposed rule Tennessee, Ohio, and Arkansas are launching multi-payer
(including Medicaid and commercial payers, excluding Medicare) bundles
and include hip and knee replacement as an episode 22 23 24.
These states' hip and knee episode definitions and payment models are
consistent with, though not the same as, the proposed CCJR episode
described in this proposed rule. However, each of these three states
uses different risk adjustment factors. This variation across states
supports our belief that there is currently no standard risk adjustment
approach widely accepted throughout the nation that could be used under
CCJR, a model that would apply to hospitals across multiple states.
Therefore, we are not proposing to make adjustments based on patient-
specific clinical indicators.
---------------------------------------------------------------------------
\22\ Tennessee Health Care Innovation Initiative. http://www.tn.gov/HCFA/strategic.shtml. Accessed on April 16, 2015.
\23\ Ohio Governor's Office of Health Transformation.
Transforming Payment for a Healthier Ohio, June 8, 2014. http://www.healthtransformation.ohio.gov/LinkClick.aspx?fileticket=TDZUpL4a-SI%3d&tabid=138, Accessed on
April 16, 2014.
\24\ Total Joint Replacement Algorithm Summary, Arkansas Health
Care Payment Improvement Initiative, November 2012. http://www.paymentinitiative.org/referenceMaterials/Documents/TJR%20codes.pdf. Accessed on April 17, 2015.
---------------------------------------------------------------------------
We also considered making price adjustments based on the
participant hospital's average Hierarchical Condition Category (HCC)
score for patients with anchor CCJR hospitalizations. The CMS-HCC risk
adjustment model quantifies a beneficiary's risk by examining the
beneficiary's demographics and historical claims data and predicting
the beneficiary's total expenditures for Medicare Parts A and B in an
upcoming year. However, the CMS-HCC risk adjustment model's intended
use is to pay Medicare Advantage (MA) plans appropriately for their
expected relative costs. For example, MA plans that disproportionately
enroll the healthy are paid less than they would have been if they had
enrolled beneficiaries with the average risk profile, while MA plans
that care for the sickest patients are paid proportionately more than
if they had enrolled beneficiaries with the average risk profile. The
CMS-HCC risk adjustment model is prospective. It uses demographic
information (that is, age, sex, Medicare/Medicaid dual eligibility,
disability status) and a profile of major medical conditions in the
base year to predict Medicare expenditures in the next year.\25\ As
previously noted, the CMS-HCC risk adjustment model is used to predict
total Medicare expenditures in an upcoming year, and may not be
appropriate for use in predicting expenditures over a shorter period of
time, such as the CCJR episode, and may not be appropriate in instances
where its use is focused on lower extremity joint replacements.
Therefore, since we have not evaluated the validity of HCC scores for
predicting Medicare expenditures for shorter episodes of care or for
specifically lower extremity joint replacement beneficiaries, we are
not proposing to risk adjust the target prices using HCC scores for the
CCJR model.
---------------------------------------------------------------------------
\25\ Pope, C. et al., Evaluation of the CMS-HCC Risk Adjustment
Model Final Report. Report to the Centers for Medicare & Medicaid
Services under Contract Number HHSM-500-2005-00029I. RTI
International. Research Triangle Park, NC. March, 2011.
---------------------------------------------------------------------------
We also considered making adjustments or setting different prices
for different procedures, such as different prices or adjustments for
hip versus knee replacements, but we do not believe there would be
substantial variation in episode payments for these clinical scenarios
to warrant different prices or adjustments. Moreover, Medicare IPPS
payments, which account for approximately 50 percent \26\ of CCJR
episode expenditures, do not differentiate between hip and knee
procedures, mitigating procedure-specific variation for the anchor
hospitalization. Furthermore, there are no widely accepted clinical
guidelines to suggest that PAC intensity would vary significantly
between knee and hip replacements. We seek comment on our proposal to
price episodes based on the MS-DRG for the anchor hospitalization,
without further risk adjustment.
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\26\ Medicare FFS Parts A and B claims, CCJR episodes, as
proposed in this rule, between October 2013 and September 2014.
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[[Page 41227]]
(2) Three Years of Historical Data
We propose to use 3 years of historical CCJR episodes for
calculating CCJR target prices. The set of 3- historical-years used
would be updated every other year. Specifically--
Performance years 1 and 2 would use historical CCJR
episodes that started between January 1, 2012 and December 31, 2014;
Performance years 3 and 4 would use historical episodes
that started between January 1, 2014 and December 31, 2016; and
Performance year 5 would use episodes that started between
January 1, 2016 and December 31, 2018. We considered using fewer than 3
years of historical CCJR episode data, but we are concerned with having
sufficient historical episode volume to reliably calculate target
prices. We also considered not updating the historical episode data for
the duration of the model. However, we believe that hospitals' target
prices should be regularly updated on a predictable basis to use the
most recent available claims data, consistent with the regular updates
to Medicare's payment systems, to account for actual changes in
utilization. We are not proposing to update the data annually, given
the uncertainty in pricing this could introduce for participant
hospitals. We also note that the effects of updating hospital-specific
data on the target price could be limited as the regional contribution
to the target price grows, moving to two-thirds in performance year 3
when the first historical episode data update would occur.
(3) Proposed Trending of Historical Data to the Most Recent Year of the
Three
We acknowledge that some payment variation may exist in the 3 years
of historical CCJR episodes due to updates to Medicare payment systems
(for example, IPPS, OPPS, IRF PPS, SNF PPS, etc.) and national changes
in utilization patterns. Episodes in the third of the 3 historical
years may have higher average payments than those from the earlier 2
years because of Medicare payment rate increases over the course of the
3 historical years. We do not intend to have CCJR incentives be
affected by Medicare payment system rate changes that are beyond
hospitals' control. In addition to the changes in Medicare payment
systems, average episode payments may change year over year due to
national trends reflecting changes in industry-wide practice patterns.
For example, readmissions for all patients, including those in CCJR
episodes, may decrease nationally due to improved industry-wide
surgical protocols that reduce the chance of infections. We do not
intend to provide reconciliation payments to (or require repayments
from) hospitals for achieving lower (or higher) Medicare expenditures
solely because they followed national changes in practice patterns.
Instead, we aim to incentivize hospitals based on their hospital-
specific inpatient and PAC delivery practices for LEJR episodes.
To mitigate the effects of Medicare payment system updates and
changes in national utilization practice patterns within the 3 years of
historical CCJR episodes, we propose to follow an approach similar to
what is done in BPCI Model 2 and apply a national trend factor to each
of the years of historical episode payments. Specifically, we propose
to inflate the 2 oldest years of historical episode payments to the
most recent year of the 3 historical years described in section
III.C.4.b.(2) of this proposed rule. We propose to trend forward each
of the 2 oldest years using the changes in the national average CCJR
episode payments. We also propose to apply separate national trend
factors for episodes anchored by MS-DRG 469 versus MS-DRG 470 to
capture any MS-DRG-specific payment system updates or national
utilization pattern changes. For example, when using CY 2012-2014
historical episode data to establish target prices for performance
years 1 and 2, under our proposal we would calculate a national average
MS-DRG 470 anchored episode payment for each of the 3 historical years.
The ratio of the national average MS-DRG 470 anchored episode payment
for CY 2014 to that of CY 2012 would be used to trend 2012 MS-DRG 470
anchored episode payments to CY 2014. Similarly, the ratio of the
national average MS-DRG 470 anchored episode payment for CY 2014 to
that of CY 2013 would be used to trend 2013 episode payments to CY
2014. The aforementioned process would be repeated for MS-DRG 469
anchored episodes. Trending CY 2012 and CY 2013 data to CY 2014 would
capture updates in Medicare payment systems as well as national
utilization pattern changes that may have occurred.
We considered adjusting for regional trends in utilization, as
opposed to national trends. However, we believe that any Medicare
payment system updates and significant changes in utilization practice
patterns would not be region-specific but rather be reflected
nationally.
We seek comment on our proposal to nationally trend historical data
to the most recent year of the 3 being used to set the target prices.
(4) Update Historical Episode Payments for Ongoing Payment System
Updates
We propose to prospectively update historical CCJR episode payments
to account for ongoing Medicare payment system (for example, IPPS,
OPPS, IRF PPS, SNF, PFS, etc.) updates to the historical episode data
and ensure we incentivize hospitals based on historical utilization and
practice patterns, not Medicare payment system rate changes that are
beyond hospitals' control. Medicare payment systems do not update their
rates at the same time during the year. For example, IPPS, the IRF
prospective payment system, and the SNF payment system apply annual
updates to their rates effective October 1, while the hospital
outpatient prospective payment system (OPPS) and Physician Fee Schedule
(PFS) apply annual updates effective January 1. To ensure we
appropriately account for the different Medicare payment system updates
that go into effect on January 1 and October 1, we propose to update
historical episode payments for Medicare payment system updates and
calculate target prices separately for episodes initiated between
January 1 and September 30 versus October 1 and December 31 of each
performance year. The target price in effect as of the day the episode
is initiated would be the target price for the whole episode. Note that
in performance year 5, the second set of target prices would be for
episodes that start and end between and including October 1 and
December 31 because the fifth performance period of the CCJR model
would end on December 31, 2020. Additionally, a target price for a
given performance year may apply to episodes included in another
performance year. For example, an episode initiated in November 2016,
and ending in February 2017 would have a target price based on the
second set of 2016 target prices (for episodes initiated between
October 1 and December 31, 2016), and it would be captured in the CY
2017 performance year (performance year 2) because it ended between
January 1 and December 31, 2017. We refer readers to section III.C.3.c.
of this proposed rule for further discussion on the definition of
performance years.
We propose to update historical CCJR episode payments by applying
separate Medicare payment system update factors each January 1 and
October 1 to each of the following six components of each hospital's
historical CCJR payments:
Inpatient acute.
[[Page 41228]]
Physician.
IRF.
SNF.
HHA.
Other services.
A different set of update factors would be calculated for January 1
through September 30 versus October 1 through December 31 episodes each
performance year. The six update factors for each of the aforementioned
components would be hospital-specific and would be weighted by the
percent of the Medicare payment for which each of the six components
accounts in the hospital's historical episodes. The weighted update
factors would be applied to historical hospital-specific average
payments to incorporate ongoing Medicare payment system updates. A
weighted update factor would be calculated by multiplying the
component-specific update factor by the percent of the hospital's
historical episode payments the component represents, and summing
together the results. For example, let us assume 50 percent of a
hospital's historical episode payments were for inpatient acute care
services, 15 percent for physician services, 35 percent for SNF
services, and 0.0 percent for the remaining services. Let us also
assume for this example that the update factors for inpatient acute
care services, physician services, and SNF services are 1.02, 1.03, and
1.01, respectively. The weighted update factor in this example would be
the following: (0.5 * 1.02) + (0.15 * 1.03) + (0.35 * 1.01) = 1.018.
The hospital in this example would have its historical average episode
payments multiplied by 1.018 to incorporate ongoing payment system
updates. The specific order of steps, and how this step fits in with
others, is discussed further in section III.C.4.c. of this proposed
rule.
Each of a hospital's six update factors would be based on how
inputs have changed in the various Medicare payment systems for the
specific hospital. Additional details on these update factors will be
discussed later in this section.
Region-specific update factors for each of the aforementioned
components and weighted update factors would also be calculated in the
same manner as the hospital-specific update factors. Instead of using
historical episodes attributed to a specific hospital, region-specific
update factors would be based on all historical episodes initiated at
any CCJR eligible hospital within the region. For purposes of this
rule, CCJR eligible hospitals are defined as hospitals that were paid
under IPPS and not a participant in BPCI Model 1 or in the risk-bearing
period of Models 2 or 4 for LEJR episodes, regardless of whether or not
the MSAs in which the hospitals are located were selected for inclusion
in the CCJR model. CCJR episodes initiated at a CCJR eligible hospital
will for purposes of this rule be referred to as CCJR episodes
attributed to that CCJR eligible hospital.
We considered an alternative option of trending the historical
episode payments forward to the upcoming performance year using ratios
of national average episode payment amounts, similar to how we propose
to trend the 2 oldest historical years forward to the latest historical
year for historical CCJR episode payments in section III.C.4.b.(3) of
this proposed rule. Using ratios of national average episode payment
amounts would have the advantage of also capturing changes in national
utilization patterns in addition to payment system updates between the
historical years and the performance year. However, such an approach
would need to be done retrospectively, after average episode payments
can be calculated for the performance year, because it would rely on
the payments actually incurred in the performance period, data for
which would be not be available before the performance period. While
the proposed approach of using component-specific update factors may be
more complicated than the aforementioned alternative, we believe the
additional complication is outweighed by the value to hospitals of
knowing target prices before the start of an episode for which the
target price would apply. We seek comment on this proposed approach of
updating historical episode payments for ongoing Medicare payment
system changes.
We do not propose to separately and prospectively apply an
adjustment to account for changes in national utilization patterns
between the historical and performance years. If a prospective
adjustment factor for national utilization pattern changes were
applied, it may only be meaningful in performance years 2 and 4, when
the historical data used to calculate target prices would not be
updated, but another year of historical data would be available. In any
of the other 3 performance years, the latest available historical year
of data would already be incorporated into the target prices. Given
that we propose to refresh the historical data used to calculate target
prices every 2 years, we do not believe an additional adjustment factor
to account for national practice pattern changes is necessary to
appropriately incentivize participant hospitals to improve quality of
care and reduce episode payments.
(a) Proposed Inpatient Acute Services Update Factor
The proposed inpatient acute services update factor would apply to
payments for services included in the episode paid under the IPPS. This
would include payments for the CCJR anchor hospitalization, but not
payments for related readmissions at CAHs during the episode window.
Payments for related readmissions at CAHs would be captured under the
update factor for other services in section III.C.4.b.(f) of this
proposed rule.
The update factor applied to the inpatient acute services component
of each participant hospital and region's historical average episode
payments would be based on how inputs for the Medicare IPPS have
changed between the latest year used in the historical 3 years of
episodes and the upcoming performance period under CCJR. We propose to
use changes in the following IPPS inputs to calculate the inpatient
acute services update factor: IPPS base rate and average of MS-DRG
weights, as defined in the IPPS/LTCH Final Rules for the relevant
years. The average MS-DRG weight would be specific to each participant
hospital and region to account for hospital and region-specific
inpatient acute service utilization patterns. Hospital-specific and
region-specific average MS-DRG weights would be calculated by averaging
the MS-DRG weight for all the IPPS MS-DRGs included in the historical
episodes attributed to each participant hospital and attributed to CCJR
eligible hospitals in the region, respectively; including MS-DRGs for
anchor admissions as well as those for subsequent readmissions that
fall within the episode definition. Expressed as a ratio, the inpatient
acute services adjustment factor would equal the following:
The numerator is based on values applicable for the
upcoming performance period (PP) for which a target price is being
calculated.
The denominator is based on values applicable at the end
of the latest historical year used in the target price (TP)
calculations.
Therefore, the proposed inpatient acute services update factor
formula is shown as--
[[Page 41229]]
[GRAPHIC] [TIFF OMITTED] TP14JY15.002
(b) Proposed Physician Services Update Factor
The proposed physician services update factor would apply to
payments for services included in the episode paid under the Medicare
PFS for physician services. We propose to use changes in the following
PFS inputs to calculate the physician services update factor of each
participant hospital and region's historical average episode payments:
RVUs; work, practice expense, and malpractice liability geographic
practice cost indices (GPCIs); and national conversion factor, as
defined in the PFS Final Rule for the relevant years. Hospital-specific
and region-specific RVU-weighted GPCIs would be calculated to account
for hospital and region-specific physician service utilization
patterns. Hospital-specific and region-specific RVU-weighted GPCIs
would be calculated by taking the proportion of RVUs for work, practice
expense, and malpractice liability for physician services included in
the historical episodes and attributed to each participant hospital and
attributed to CCJR eligible hospitals in the region, respectively, and
multiplying each proportion by the relevant GPCI.
Expressed as a ratio, the physician services update factor would
equal the following:
The numerator is based on GPCI values applicable for the
upcoming performance period (PP) for which a target price is being
calculated.
The denominator is based on GPCI applicable at the end of
the latest year used in the target price (TP) calculations.
Therefore, the proposed physician services update factor formula is
shown as--
[GRAPHIC] [TIFF OMITTED] TP14JY15.003
(c) Proposed IRF Services Update Factor
The proposed IRF services update factor apply to payments for
services included in the episode paid under the Medicare inpatient
rehabilitation facility prospective payment system (IRF PPS). We
propose to use changes in the IRF Standard Payment Conversion Factor,
an input for the IRF PPS and defined in the IRF PPS Final Rule for the
relevant years, to update Medicare payments for IRF services provided
in the episode. The IRF Standard Payment Conversion Factor is the same
for all IRFs and IRF services, so there is no need to account for any
hospital-specific or region-specific IRF utilization patterns; each
participant hospital and region would use the same IRF services update
factor.
Expressed as a ratio, the IRF PPS update factor would equal the
following:
The numerator is based on values applicable for the
upcoming performance period (PP) for which a target price is being
calculated.
The denominator is based on values applicable at the end
of the latest historical year used in the target price (TP)
calculations:
Therefore, the proposed IRF services update factor formula is shown
as
[GRAPHIC] [TIFF OMITTED] TP14JY15.004
(d) Proposed SNF Services Update Factor
The proposed SNF services update factor would apply to payments for
services included in the episode and paid under the SNF PPS, including
payments for SNF swing bed services. The update factor applied to the
SNF services component of each participant hospital and region's
historical average episode payments would be based on how average
Resource Utilization Group (RUG-IV) Case-Mix Adjusted Federal Rates for
the Medicare SNF PPS (defined in the SNF PPS Final Rule) have changed
between the latest year used in the historical 3 years of episodes and
the upcoming performance period under CCJR. The average RUG-IV Case-Mix
Adjusted Federal Rates would be specific to each participant hospital
and region to account for hospital and region-specific SNF service
utilization patterns. Hospital-specific and region-specific average
RUG-IV Case-Mix Adjusted Federal Rates would be calculated by averaging
the RUG-IV Case-Mix Adjusted Federal Rates for all SNF services
included in the historical episodes attributed to each participant
hospital and attributed to CCJR eligible hospitals in the region,
respectively. We note that the RUG-IV Case-Mix Adjusted Federal Rate
may vary for the same RUG, depending on whether the SNF was categorized
as urban or rural.
Expressed as a ratio, the SNF services update factor would equal
the following:
The numerator is based on values applicable for the
upcoming performance period (PP) for which a target price is being
calculated.
The denominator is based on values applicable at the end
of the latest year used in the target price (TP) calculations:
Therefore, the proposed SNF services update factor formula is shown
as
[GRAPHIC] [TIFF OMITTED] TP14JY15.005
[[Page 41230]]
(e) Proposed HHA Services Update Factor
The proposed HHA services update factor would apply to payments for
services included in the episode and paid under the HH PPS, but exclude
payments for Low Utilization Payment Adjustment (LUPA) claims (claims
with four or fewer home health visits) because they are paid
differently and would instead be captured in the update factor for
other services in section III.C.4.b.(f) of this proposed rule. The
update factor applied to the home health services component of each
participant hospital and region's historical average episode payments
would be based on how inputs for the Medicare HH PPS have changed
between the latest year used in the historical 3 years of episodes and
the upcoming performance period under CCJR. We propose to use changes
in the HH PPS base rate and average of home health resource group
(HHRG) case-mix weight, inputs for the HHA PPS and defined in the HHA
PPS Final Rule for the relevant years, to calculate the home health
services update factor. The average HHRG case-mix weights would be
specific to each participant hospital and region to account for
hospital and region-specific home health service utilization patterns.
Hospital-specific and region-specific HHA services update factors would
be calculated by averaging the HHRG case-mix weights for all home
health payments (excluding LUPA claims) included in the historical
episodes attributed to each participant hospital and attributed to CCJR
eligible hospitals in the region, respectively.
Expressed as a ratio, the HHA adjustment factor would equal the
following:
The numerator is based on values applicable for the
upcoming performance period (PP) for which a target price is being
calculated.
The denominator is based on values applicable at the end
of the latest historical year used in the target price (TP)
calculations.
Therefore, the proposed HHA services update factor formula is shown
as--
[GRAPHIC] [TIFF OMITTED] TP14JY15.006
(f) Proposed Other Services Update Factor
The other services update factor would apply to payments for
services included in the episode and not paid under the IPPS, PFS, IRF
PPS, or HHA PPS (except for LUPA claims). This component would include
episode payments for home health LUPA claims and CCJR related
readmissions at CAHs. For purposes of calculating the other services
update factor, we propose to use the Medicare Economic Index (MEI), a
measure developed by CMS for measuring the inflation for goods and
services used in the provision of physician services.\27\ We would
calculate the other services update factor as the percent change in the
MEI between the latest year used in the TP calculation and its
projected value for the upcoming performance period. Because MEI is not
hospital or region-specific, each participant hospital and region would
use the same other services update factor.
---------------------------------------------------------------------------
\27\ Medicare Market Basket Data. http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketData.html.
---------------------------------------------------------------------------
(5) Blend Hospital-specific and Regional Historical Data
We propose to calculate CCJR episode target prices using a blend of
hospital-specific and regional historical average CCJR episode
payments, including CCJR episode payments for all CCJR eligible
hospitals in the same U.S. Census division as discussed further in
section III.C.4.b.(6) of this proposed rule. Specifically, we propose
to blend two-thirds of the hospital-specific episode payments and one-
third of the regional episode payment to set a participant hospital's
target price for the first 2- performance years of the CCJR model (CY
2016 and CY 2017). For performance year 3 of the model (CY 2018), we
propose to adjust the proportion of the hospital-specific and regional
episode payments used to calculate the episode target price from two-
thirds hospital-specific and one-third regional to one-third hospital-
specific and two-thirds regional. Finally, we propose to use only
regional historical CCJR episode payments for performance years 4 and 5
of the model (CY 2019 and CY 2020) to set a participant hospital's
target price, rather than a blend between the hospital-specific and
regional episode payments. The specific order of steps, and how this
step fits in with others, is discussed further in section III.C.4.c. of
this proposed rule. We welcome comment on the appropriate blend between
hospital-specific and regional episode payments and the change in that
blend over time.
We considered establishing episode target prices using only
historical CCJR hospital-specific episode payments for all 5
performance years of the model (that is, episode payments for episodes
attributed to the participant hospital, as previously described in
section III.C.2. of this proposed rule). Using hospital-specific
historical episodes may be appropriate in other models such as BPCI
Model 2 where participation is voluntary and setting a region-wide
target price could lead to a pattern of selective participation in
which inefficient providers decline to participate, undermining the
model's ability to improve the efficiency and quality of care delivered
by those providers, while already-efficient providers receive windfall
gains even if they do not further improve efficiency. Because CCJR
model participants will be required to participate in the model, solely
using hospital-specific historical episode data is not necessary to
avoid this potential concern. Furthermore, using only hospital-specific
historical CCJR episode payments may provide little incentive for
hospitals that already cost-efficiently deliver high quality care to
maintain or further improve such care. These hospitals could receive a
relatively low target price because of their historical performance but
have fewer opportunities for achieving additional efficiency under
CCJR. They would not receive reconciliation payments for maintaining
high quality and efficiency, while other hospitals that were less
efficient would receive reconciliation payments for improving, even if
the less historically efficient hospitals did not reach the same level
of high quality and efficiency as the more historically efficient
hospitals. Using only hospital-specific historical CCJR episode
payments may also not be sufficient to curb inefficient care or
overprovision of services for hospitals with historically high CCJR
episode payments. In such instances, using hospital-specific historical
episode payments for the CCJR model could result in Medicare continuing
to pay an excessive amount for episodes of care provided by inefficient
hospitals, and inefficient hospitals would stand to
[[Page 41231]]
benefit from making only small improvements. Thus, we do not propose to
set target prices based solely on hospital-specific data for any
performance years of the model.
We considered establishing the episode target price using only
historical CCJR regional episode payments for all 5 performance years
of the model. Though regional target pricing would reward the most
efficient hospitals for continuing to provide high quality and cost
efficient care, we are concerned about providing achievable incentives
under the model for hospitals with high historical CCJR average episode
payments. We believe a lower regional price for such hospitals would
leave them with little financial incentive in performance year 1,
especially without any responsibility to repay payments in excess of
the target price as described in section III.C.3. of this proposed
rule. Thus, we do not propose to set target prices solely on regional
data for the entire duration of the model.
Therefore, we propose initially to blend historical hospital-
specific and regional-historical episode payments and then transition
to using regional-only historical episode payments in establishing
target prices to afford early and continuing incentives for both
historically efficient and less efficient hospitals to furnish high
quality, efficient care in all years of the model. Our proposal more
heavily weights a hospital's historical episode data in the first 2
years of the model (two-thirds hospital-specific, one-third regional),
providing a reasonable incentive for both currently efficient and less
efficient hospitals to deliver high quality and efficient care in the
early stages of model implementation. Beginning in performance year 3,
once hospitals have engaged in care redesign and adapted to the model
parameters, we propose to shift to a more heavily weighted regional
contribution (one-third hospital-specific, two-thirds regional in
performance year 3) and ultimately to a regional target price for
performance years 4 and 5. We believe that by performance year 4,
setting target prices based solely on regional historical data would be
feasible because hospitals would have had 3 years under this model to
more efficiently deliver high quality care, thereby reducing some of
the variation across hospitals. We believe transitioning to regional
only pricing in the latter years of the model would provide important
information about the reduction in unnecessary variation in LEJR
episode utilization patterns within a region that can be achieved.
We believe transitioning to regional-only pricing in the latter
years of the model may provide valuable information regarding potential
pricing strategies for successful episode payment models that we may
consider for expansion in the future. As discussed previously,
substantial regional and hospital-specific variation in Medicare LEJR
episode spending currently exists for beneficiaries with similar
demographic and health status, so we are proposing that the early CCJR
model years will more heavily weight historical hospital-specific
experience in pricing episode for a participant hospital. Once the
hospital has substantial experience with care redesign, we expect that
unnecessary hospital-specific variation in episode spending will be
minimized so that regional-only pricing would be appropriate as we have
proposed. We note that, like episode payment under the CCJR model,
Medicare's current payment systems make payments for bundles of items
and services, although of various breadths and sizes depending on the
specific payment system. For example, the IPPS pays a single payment,
based on national prices with geography-specific labor cost
adjustments, for all hospital services furnished during an inpatient
hospital stay, such as nursing services, medications, medical
equipment, operating room suites, etc. Under the IPPS, the national
pricing approach incentivizes efficiencies and has, therefore, led to a
substantial reduction in unnecessary hospital-specific variation in
resource utilization for an inpatient hospital stay. On the other hand,
the episode payment approach being tested under BPCI Model 2 relies
solely on provider-specific pricing over the lifetime of the model,
assuming the number of episode cases is sufficient to establish a
reliable episode price, an approach that has potential limitations were
expansion to be considered. Thus, we believe our proposal for CCJR will
provide new, important information regarding pricing for even larger
and broader bundles of services once unnecessary provider-specific
variation has been minimized that would supplement our experience with
patterns and pricing under existing payment systems and other episode
payment models. We expect that testing of CCJR will contribute further
information about efficient Medicare pricing strategies that result in
appropriate payment for providers' resources required to furnish high
quality, efficient care to beneficiaries who receive LEJR procedures.
This is essential information for any consideration of episode payment
model expansion, including nationally, in the future, where
operationally feasible and appropriate pricing strategies, including
provider-specific, regional, and national pricing approaches would need
to be considered.
We propose an exception to the blended hospital-specific and
regional pricing approach for hospitals with low historical CCJR
episode volume. We propose to define hospitals with low CCJR episode
volume as those with fewer than 20 CCJR episodes in total across the 3-
historical-years used to calculate target prices. We believe
calculating the hospital-specific component of the blended target price
for these historically low CCJR episode volume hospitals may be subject
to a high degree of statistical variation. Therefore, for each
performance year, we propose to use 100 percent regional target pricing
for participant hospitals who have fewer than twenty historical CCJR
episodes in the 3-historical-years used to calculate target prices, as
described in section III.C.4.b.(2) of this proposed rule. We note that
the 3-historical-years used to calculate target prices would change
over the course of the model, as described in section III.C.4.b.(2) of
this proposed rule, and when that happens, the twenty episode threshold
would be applied to the new set of historical years. If all IPPS
hospitals nationally participated (for estimation purposes, only) in
CCJR, we estimate about 5 percent of hospitals would be affected by
this proposed low historical CCJR episode volume provision. \28\ A
minimum threshold of twenty episodes is almost equal to the minimum
number of admissions required in the Medicare HRRP. HRRP payment
adjustment factors are, in part, determined by procedure/condition-
specific readmission rates for a hospital. HRRP requires at least 25
procedure/condition-specific admissions to calculate the procedure/
condition-specific readmission rate and to be included in the
hospital's overall HRRP payment adjustment factor. Though the proposed
minimum threshold of twenty episodes is slightly less than the 25
admissions required for HRRP, we believe that because we would not be
calculating infrequent events such as readmissions, we can achieve a
stable price with slightly fewer episodes.
---------------------------------------------------------------------------
\28\ Medicare FFS Parts A and B claims, CCJR episodes, as
proposed in this rule, between October 2013 and September 2014.
---------------------------------------------------------------------------
We also propose an exception to the blended hospital-specific and
regional
[[Page 41232]]
pricing approach for participant hospitals that received new CMS
Certification Numbers (CCNs) during the 24 months prior to the
beginning of, or during, the performance year for which target prices
are being calculated. These participant hospitals with new CCNs may
have formed due to a merger between or split from previously existing
hospitals, or may be new hospitals altogether. As a general principle,
we aim to incorporate into the target prices all the historical
episodes that would represent our best estimate of CCJR historical
payments for these participant hospitals with new CCNs. For participant
hospitals with new CCNs that formed from a merger between or split from
previously existing hospitals, we propose to calculate hospital-
specific historical payments using the episodes attributed to the
previously existing hospitals. These hospital-specific historical
payments would then be blended with the regional historical payments
according to the approach previously described in this section. For
participant hospitals with new CCNs that are new hospitals altogether,
we propose to use the approach previously described in this section for
hospitals with fewer than 20 CCJR episodes across the 3 historical
years used to calculate target prices. In other cases, due to an
organizational change a hospital may experience a change to an already
existing CCN during the 24 months prior to the beginning of, or during,
the performance year for which target prices are being calculated. For
example, one hospital with a CCN may merge with a second hospital
assigned a different CCN, and both hospitals would then be identified
under the single CCN of the second hospital. While there may be more
than 20 CCJR episodes under the second hospital's CCN in total across
the 3 historical years used to calculate target prices, in this
scenario our use of only those cases under the second hospital's CCN in
calculating hospital-specific historical payments would fail to meet
our general principle of incorporating into target prices all the
historical episodes that would represent our best estimate of CCJR
historical payments for these now merged hospitals. In this scenario,
we propose to calculate hospital-specific payments for the remaining
single CCN (originally assigned to the second hospital only) using the
historical episodes attributed to both previously existing hospitals.
These hospital-specific historical payments would then be blended with
the regional historical payments according to the approach previously
described in this section in order to determine the episode price for
the merged hospitals bearing a single CCN.
We seek comment on this proposed approach for blending hospital-
specific and regional historical payments.
(6) Define Regions as U.S. Census Divisions
In all 5 performance years we propose to define ``region'' as one
of the nine U.S. Census divisions \29\ in Figure 3.
---------------------------------------------------------------------------
\29\ There are four census regions--Northeast, Midwest, South,
and West. Each of the four census regions is divided into two or
more ``census divisions''. Source: https://www.census.gov/geo/reference/gtc/gtc_census_divreg.html. Accessed on April 15, 2015.
\30\ http://www.eia.gov/consumption/commercial/censusmaps.cfm.
[GRAPHIC] [TIFF OMITTED] TP14JY15.007
We considered using states, HRRs, and the entire U.S. as
alternative options to U.S. Census divisions in defining the region
used in blending provider-specific and regional historical episode data
for calculating target prices. However, HRR definitions are
specifically based on referrals for cardiovascular surgical procedures
and neurosurgery, and may not reflect referral patterns for orthopedic
procedures. Using the entire U.S. would not account for substantial
current regional variation in utilization, which is significant for
episodes that often involve PAC use, such as lower extremity joint
replacement procedures \31\. Finally, we considered
[[Page 41233]]
using states as regions but were concerned that doing so would not
allow for sufficient LEJR episode volume to set stable regional
components of target prices, especially for participant hospitals in
small states. We believe U.S. Census divisions provide the most
appropriate balance between very large areas with highly disparate
utilization patterns and very small areas that would be subject to
price distortions due to low volume or hospital-specific utilization
patterns.
---------------------------------------------------------------------------
\31\ Hussey PS, Huckfeldt P, Hirshman S, Mehrotra A. Hospital
and regional variation in Medicare payment for inpatient episodes of
care [published online April 13, 2015]. JAMA Intern Med.
doi:10.1001/jamainternmed.2015.0674.
---------------------------------------------------------------------------
We seek comment on our proposal to define a region as the U.S.
Census division for purposes of the regional component of blended
target prices under CCJR.
(7) Normalize for Provider-Specific Wage Adjustment Variations
We note that some variation in historical CCJR episode payments
across hospitals in a region may be due to wage adjustment differences
in Medicare's payments. In setting Medicare payment rates, Medicare
typically adjusts facilities' costs attributable to wages and wage-
related costs (as estimated by the Secretary from time to time) by a
factor (established by the Secretary) reflecting the relative wage
level in the geographic area of the facility or practitioner (or the
beneficiary residence, in the case of home health and hospice services)
compared to a national average wage level. Such adjustments are
essential for setting accurate payments, as wage levels vary
significantly across geographic areas of the country. However, having
the wage level for one hospital influence the regional-component of
hospital-specific and regional blended target prices for another
hospital with a different wage level would introduce unintended pricing
distortions not based on utilization pattern differences.
In order to preserve how wage levels affect provider payment
amounts, while minimizing the distortions introduced when calculating
the regional-component of blended target prices, we propose to
normalize for wage index differences in historical episode payments
when calculating and blending the regional and hospital-specific
components of blended target prices. Calculating blended target prices
from historical CCJR episodes would help ensure we incentivize
hospitals based on historical utilization and practice patterns, not
Medicare payment system rate changes that are beyond hospitals'
control.
We propose to normalize for provider-specific wage index variations
using the IPPS wage index applicable to the anchor hospitalization
(that is, the IPPS wage index used in the calculation of the IPPS
payment for the anchor hospitalization). The anchor hospitalization
accounts for approximately 50 percent of the total episode
expenditures, and the IPPS wage index is applied to IPPS payments in a
similar manner as wage indices for other Medicare payment systems are
applied to their respective payments.\32\ Therefore, we propose that
the IPPS wage index applicable to the anchor hospitalization for each
historical episode be used to normalize for wage index variations in
historical episode payments across hospitals when calculating blended
target prices. We propose to specifically perform this normalization
using the wage normalization factor (0.7 * IPPS wage index + 0.3) to
adjust the labor-related portion of payments affected by wage indices.
The 0.7 approximates the labor share in IPPS, IRF PPS, SNF, and HHA
Medicare payments. We would normalize for provider-specific wage index
variations by dividing a hospital's historical episode payments by the
wage normalization factor.
---------------------------------------------------------------------------
\32\ Medicare FFS Parts A and B claims, CCJR episodes, as
proposed in this rule, between October 2013 and September 2014.
---------------------------------------------------------------------------
We propose to reintroduce the hospital-specific wage variations by
multiplying episode payments by the wage normalization factor when
calculating the target prices for each participant hospital, as
described in section III.C.4.c. of this proposed rule. When
reintroducing the hospital-specific wage variations, the IPPS wage
index would be the one that applies to the hospital during the period
for which target prices are being calculated (for example, FY 2016 wage
indices for the target price calculations for episodes that begin
between January 1 and September 30, 2016). The specific order of steps,
and how this step fits in with others, is discussed further in section
III.C.4.c. of this proposed rule. We seek comment on our proposal to
normalize for wage index differences using participant hospitals' wage
indices in order to calculate blended target prices.
(8) Proposed Combination of CCJR Episodes Anchored by MS-DRGs 469 and
470
We propose to pool together CCJR episodes anchored by MS-DRGs 469
and 470 for target price calculations to use a greater historical CCJR
episode volume and set more stable target prices. We note that we would
still calculate separate target prices for episodes anchored by MS-DRGs
469 versus 470, described later in this section.
To pool together MS-DRG 469 and 470 anchored episodes, we propose
to use an anchor factor and hospital weights. The anchor factor would
equal the ratio of national average historical MS-DRG 469 anchored
episode payments to national average historical MS-DRG 470 anchored
episode payments. The national average would be based on episodes
attributed to any CCJR eligible hospital. The resulting anchor factor
would be the same for all participant hospitals. For each participant
hospital, a hospital weight would be calculated using the following
formula, where episode counts are participant hospital-specific and
based on the episodes in the 3 historical years used in target price
calculations:
[GRAPHIC] [TIFF OMITTED] TP14JY15.008
A hospital-specific pooled historical average episode payment would
be calculated by multiplying the hospital's hospital weight by its
combined historical average episode payment (sum of MS-DRG 469 and 470
anchored historical episode payments divided by the number of MS-DRG
469 and 470 historical episodes).
The calculation of the hospital weights and the hospital-specific
pooled historical average episode payments would be comparable to how
case mix indices are used to generate case mix-
[[Page 41234]]
adjusted Medicare payments. The hospital weight essentially would count
each MS-DRG 469 triggered episode as more than one episode (assuming
MS-DRG 469 anchored episodes have higher average payments than MS-DRG
470 anchored episodes) so that the pooled historical average episode
payment, and subsequently the target price, is not skewed by the
hospital's relative breakdown of MS-DRG 469 versus 470 anchored
historical episodes.
The hospital-specific pooled historical average payments would be
modified by blending and discount factors, as described in section
III.C.4.c. of this proposed rule. Afterwards, the hospital-specific
pooled calculations would be ``unpooled'' by setting the MS-DRG 470
anchored episode target price to the resulting calculations, and by
multiplying the resulting calculations by the hospital weight to
produce the MS-DRG 469 anchored target prices.
We would calculate region-specific weights and region-specific
pooled historical average payments following the same steps proposed
for hospital-specific weights and hospital-specific pooled average
payments. Instead of grouping episodes by the attributed hospital as is
proposed for hospital-specific calculations, region-specific
calculations would group together episodes that were attributed to any
CCJR eligible hospital located within the region. The hospital-specific
and region-specific pooled historical average payments would be blended
together as discussed in section III.C.4.b.(3) of this proposed rule.
The specific order of steps, and how this step fits in with others, is
discussed further in section III.C.4.c. of this proposed rule.
We considered an alternative option of independently setting target
prices for MS-DRG 470 and 469 anchored episodes without pooling them.
However, hospital volume for MS-DRG 469 was substantially less than for
MS-DRG 470. In 2013 across all IPPS hospitals, there were more than 10
times as many MS-DRG 470 anchored episodes as compared to MS-DRG 469
anchored episodes. \33\ In the same analysis, the median number of
episodes for a hospital with at least 1 episode for the MS-DRG anchored
episode was more than 80 for MS-DRG 470 anchored episodes, though fewer
than 10 for MS-DRG 469 anchored episodes. Calculating target prices for
MS-DRG 469 anchored episodes separately for each participant hospital
may result in too few historical episodes to calculate reliable target
prices. We also considered pooling together MS-DRG 469 and 470 anchored
episodes without any anchor factor or hospital weights. However,
internal analyses suggest that average episode payments for these two
MS-DRG anchored episodes significantly differed; CCJR episodes
initiated by MS-DRG 469 had payments almost twice as large as those
initiated by MS-DRG 470.\34\ This difference is reasonable given that
Medicare IPPS payments differ for MS-DRG 469 and 470 admissions, and
inpatient payments comprise approximately 50 percent of CCJR episode
payments. Thus, pooling together MS-DRG 469 and 470 anchored episodes
without any anchor factor or hospital weights would introduce
distortions due only to case-mix differences.
---------------------------------------------------------------------------
\33\ Source: CCW Part A and Part B claims for CCJR episodes
beginning in CY 2013.
\34\ Medicare FFS Parts A and B claims, CCJR episodes, as
proposed in this rule, between October 2013 and September 2014.
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(9) Discount Factor
When setting an episode target price for a participant hospital, we
propose to apply a discount to a hospital's hospital-specific and
regional blended historical payments for a performance period to
establish the episode target price that would apply to the participant
hospital's CCJR episodes during that performance period and for which
the hospital would be fully, or partly, accountable for episode
spending in relationship to the target price, as discussed in section
III.C.3. of this proposed rule. We expect participant hospitals to have
significant opportunity to improve the quality and efficiency of care
furnished during episodes in comparison with historical practice,
because this model would facilitate the alignment of financial
incentives among providers caring for beneficiaries throughout the
episode. This discount would serve as Medicare's portion of reduced
expenditures from the CCJR episode, with any episode expenditure below
the target price potentially available as reconciliation payments to
the participant hospital where the anchor hospitalization occurred. We
propose to apply a 2 percent discount for performance years 1 through 5
when setting the target price. We believe that applying a 2 percent
discount in setting the episode target price allows Medicare to partake
in some of the savings from the CCJR model, while leaving considerable
opportunity for participant hospitals to achieve further episode
savings below the target price that they would be paid as
reconciliation payments, assuming they meet the quality requirements as
discussed in section III.C.5 of this proposed rule.
The proposed 2 percent discount is similar to the range of the
discounts used for episodes in the Medicare Acute Care Episode (ACE)
demonstration.\35\ In the Medicare ACE, a demonstration program that
included orthopedic procedures such as those included in CCJR,
participant hospitals negotiated with Medicare discounts of 2.5 to 4.4
percent of all Part A orthopedic services and 0.0 to 4.4 percent of all
Part B orthopedic services during the inpatient stay (excluding PAC).
Hospitals received the discounted payment and reported that they were
still able to achieve savings.\36\ We believe there is similar, if not
potentially more, opportunity for savings in the CCJR payment model
because it includes acute inpatient, as well as PAC, an area of episode
spending that accounts for approximately 25 percent of CCJR episode
payments and exhibits more than 2 times the episode payment variation
\37\ than that of acute inpatient hospitalization.\38\ We believe that
with the proposed 2 percent discount, participant hospitals have an
opportunity to create savings for themselves as well as Medicare, while
also maintaining or improving quality of care for beneficiaries.
---------------------------------------------------------------------------
\35\ IMPAQ International. Evaluation of the Medicare Acute Care
Episode (ACE) Demonstration: Final Evaluation Report. Columbia, MD:
IMPAQ International; May 2013. http://downloads.cms.gov/files/cmmi/ACE-EvaluationReport-Final-5-2-14.pdf. Accessed April 1 6, 2015.
\36\ IMPAQ International. Evaluation of the Medicare Acute Care
Episode (ACE) Demonstration: Final Evaluation Report. Columbia, MD:
IMPAQ International; May 2013. http://downloads.cms.gov/files/cmmi/ACE-EvaluationReport-Final-5-2-14.pdf. Accessed April 1 6, 2015.
\37\ Variation for purposes of this calculation refers to
standard deviation of inpatient and institutional post-acute episode
payments as a percentage of average inpatient and post-acute episode
payments, respectively.
\38\ Medicare FFS Parts A and B claims, CCJR episodes, as
proposed in this rule, between October 2013 and September 2014.
---------------------------------------------------------------------------
The proposed 2 percent discount also matches the discount used in
the BPCI Model 2 90-day episodes, and is less than the discount used in
BPCI Model 2 30-day and 60-day episodes (3 percent). Hundreds of
current BPCI participants have elected to take on responsibility for
repayment in BPCI Model 2 with a 2 to 3 percent discount. Because many
BPCI participants volunteered to participate in a bundled payment model
with a discount, we believe that a discount percent that is within, and
especially a discount of 2 percent that is at the lower end of, the
BPCI discount range would allow CCJR
[[Page 41235]]
participant hospitals to create savings for both themselves and
Medicare.
As mentioned previously in section III.C.3. of this proposed rule,
we propose to phase in the financial responsibility of hospitals for
repayment of actual episode spending that exceeds the target price
starting in performance year 2. In order to help hospitals transition
to taking on this responsibility, we propose to apply a reduced
discount of one percent in performance year 2 for purposes of
determining the hospital's responsibility for excess episode spending,
but maintain the 2 percent discount for purposes of determining the
hospital's opportunity to receive reconciliation payment for actual
episode spending below the target price. For example, under this
proposal in performance year 2, a hospital that achieves CCJR actual
episode payments below a target price based on a 2 percent discount
would retain savings below the target price, assuming the quality
thresholds for reconciliation payment eligibility are met (discussed in
section III.C.5. of this proposed rule) and the proposed performance
year stop-gain limit (discussed in section III.C.8. of this proposed
rule) does not apply. Medicare would hold responsible for repayment
hospitals whose CCJR actual episode payments exceed a target price
based on a one percent discount, assuming the proposed performance year
2 stop-loss limit (discussed in section III.C.8. of this proposed rule)
does not apply. Hospitals that achieve CCJR actual episode payments
between a 2 percent-discounted target price and 1 percent-discounted
target price would neither receive reconciliation payments nor be held
responsible for repaying Medicare. The decision on which percent-
discounted target price applies will be made by evaluating actual
episode payments in aggregate after the completion of performance year
2, and the same percent-discounted target price would apply to all
episodes that are initiated in performance year 2. We propose to apply
this reduced one percent discount for purposes of hospital repayment
responsibility only in performance year 2 and apply the 2 percent
discount for excess episode spending repayment responsibility for
performance years 3 through 5. Under this proposal, the discount for
determination of reconciliation payment for episode actual spending
below the target price would not deviate from 2 percent through
performance years 1 through 5.
In section III.C.5. of this proposed rule, we propose voluntary
submission of data for a patient-reported outcome measure. We propose
to incent participant hospitals to submit data on this measure by
reducing the discount percentage by 0.3 percentage points for
successfully submitting data, as defined in section III.D. of this
proposed rule. By successfully submitting data on this metric for
episodes ending in performance years 1, 2, 3, 4, and or 5, we would
adjust the discount percentage in the corresponding year(s) as follows:
For episodes beginning in performance year 2, set the
discount percentage in a range from 2 percent to 1.7 percent for
purposes of determining the hospital's opportunity to receive
reconciliation payment for actual episode spending below the target
price, and set the discount percentage in a range from 1 percent to 0.7
percent for purposes of determining the amount the hospital would be
responsible for repaying Medicare for actual episode spending above the
target price.
For episodes beginning in performance years 3 through 5,
set the discount percentage in a range from 2 percent to 1.7 percent
for purposes of reconciliation payment and Medicare repayment
calculations.
The determination of whether the hospital successfully submitted
data on the patient-reported outcome measure cannot be made until after
the performance year ends and data is reported. Therefore, participant
hospitals would be provided target prices for both scenarios whether
the successfully submit data or not and such determination will happen
at the time of payment reconciliation (discussed further in section
III.C.6. of this proposed rule).
We seek comment on our proposed discount percentage of 2 percent
for CCJR episodes, our proposal to reduce the discount to 1 percent on
a limited basis in performance year 2, and our proposal to reduce the
discount by 0.3 percentage points for successfully reporting patient-
reported outcomes data in the corresponding year.
c. Proposed Approach to Combine Pricing Features
In section III.C.4.(b) of this proposed rule we discuss the various
features we propose to incorporate into our approach to set target
prices. We refer readers to that section for more information on
rationale and alternatives considered for each feature. In this section
we discuss how the different pricing features, as well as the episode
definition (section III.B. of this proposed rule) and adjustments to
payments included in the episodes (section III.C.3. of this proposed
rule), would fit together and be sequenced to calculate CCJR episode
target prices for participant hospitals. As previously discussed in
sections III.C.4.a and III.C.4.b of this proposed rule, we propose to
calculate sixteen target prices for performance year 2, and eight
target prices for each of the other 4 performance years. The following
steps would be used to calculate MS-DRG 469 and 470 anchored episode
target prices for both January 1 through September 30 and October 1
through December 31 each performance year. The output of each step
would be used as the input for the subsequent step, unless otherwise
noted.
Calculate historical CCJR episode payments for episodes
that were initiated during the 3- historical-years (section
III.C.4.b.(2) of this proposed rule) for all CCJR eligible hospitals
for all Medicare Part A and B services included in the episode. We note
that specific PBPM payments may be excluded from historical episode
payment calculations as discussed in section III.C.7.d. of this
proposed rule.
Remove effects of special payment provisions (section
III.C.3.a. of this proposed rule).
Prorate Medicare payments for included episode services
that span a period of care that extends beyond the episode (section
III.C.3.b of this proposed rule.).
Normalize for hospital-specific wage adjustment variation
by dividing the episodes outputted in step (3) by the hospital's
corresponding wage normalization factor described in section
III.C.4.b.(7) of this proposed rule.
Trend forward 2 oldest historical years of data to the
most recent year of historical data. As discussed in section
III.C.4.b.(3) of this proposed rule, separate national trend factors
would be applied to episodes anchored by MS-DRG 469 versus MS-DRG 470.
Cap high episode payment episodes with a region and MS-DRG
anchor-specific high payment ceiling as discussed in section III.C.3.c.
of this proposed rule, using the episode output from the previous step.
Calculate anchor factor and participant hospital-specific
weights (section III.C.4.b.(8) of this proposed rule) using the episode
output from the previous step to pool together MS-DRG 469 and 470
anchored episodes, resulting in participant hospital-specific pooled
historical average episode payments. Similarly, calculate region-
specific weights to calculate region-specific pooled historical average
episode payments. We have posted region-specific pooled historical
average
[[Page 41236]]
episode payments on the CCJR proposed rule Web site at http://innovation.cms.gov/initiatives/ccjr/.
Calculate participant hospital-specific and region-
specific weighted update factors as described in section III.C.4.b.(4)
of this proposed rule. Multiply each participant hospital-specific and
region-specific pooled historical average episode payment by its
corresponding participant hospital-specific and region-specific
weighted update factors to calculate participant hospital-specific and
region-specific updated, pooled, historical average episode payments.
Blend together each participant hospital-specific updated,
pooled, historical average episode payment with the corresponding
region-specific updated, pooled, historical average episode payment
according to the proportions described in section III.C.4.b.(5) of this
proposed rule. Participant hospitals that do not have the minimum
episode volume across the historical 3 years would use 0.0 percent and
100 percent as the proportions for hospital and region, respectively.
Reintroduce hospital-specific wage variations by
multiplying the participant hospital-specific blended, updated, and
pooled historical average episode payments by the corresponding
hospital-specific wage normalization factor, using the hospital's IPPS
wage index that applies to the hospital during the period for which
target prices are being calculated (section III.C.4.b.(7) of this
proposed rule).
Multiply the appropriate discount factor, as discussed in
section III.C.4.b.(9) of this proposed rule to each participant
hospital's wage-adjusted, blended, updated, and pooled historical
average episode payment. For performance years 1, 3, 4, and 5, two
discount factors would be used, one if the hospital successfully
submits data on the patient-reported outcomes measure proposed in
section III.C.5 of this proposed rule, and one if the hospital does not
successfully submit the data. For performance year 2, 4 discount
factors would be used to account for the 4 combinations of the
following: a) whether or not the hospital successfully submits data on
the patient-reported outcomes measure; and b) for the different
discount factors proposed for purposes of calculating reconciliation
payments vs. calculating repayment amounts. The result of this
calculation would be the participant hospital-specific target prices
for MS-DRG 470 anchored episodes.
Multiply participant hospitals' target prices for MS-DRG
470 anchored episodes by the anchor factor (section III.C.4.b.(8) of
this proposed rule) to calculate hospitals' target prices for MS-DRG
469 anchored episodes.
The aforementioned steps would be used to calculate target prices
for episodes that begin between January 1 and September 30, as well as
for episodes that begin between October 1 and December 31, for each
performance year. The target price calculations for the two different
time periods each performance year would differ by the IPPS wage index
used in step (11) and the update factors used in step (8). By following
these eight steps, we would calculate eight target prices for each
participant hospital for performance years 1, 3, 4, and 5, and 16
target prices for performance year 2. We refer readers to section
III.C.4.b. of this proposed rule for further details on each of the
specific steps.
We seek comment on the proposed approach to sequence and fit
together the different pricing features, the episode definition
(section III.B. of this proposed rule), and adjustments to payments
included in the episodes (section III.C.3. of this proposed rule) to
calculate CCJR episode target prices for participant hospitals.
5. Proposed Use of Quality Performance in the Payment Methodology
a. Background
Over the past several years Medicare payment policy has moved away
from FFS payments unlinked to quality and towards payments that are
linked to quality of care. Through the Affordable Care Act, we have
implemented specific IPPS programs like the HVBP (subsection (o) of
section 1886 of the Act), the Hospital Acquired Conditions Reduction
Program (HACRP) (subsection (q) of section 1886) and the HRRP
(subsection (p) of section 1886), where quality of care is linked with
payment. We have also implemented the MSSP, an accountable care
organization program that links shared savings payment to quality
performance. Since the implementation of the HRRP in October 2012,
readmission rates for various medical conditions like THA and TKA (THA/
TKA) have improved. Trend analyses show a decrease in readmission rates
and specifically with THA/TKA risk-standardized readmissions rates
(RSRR) from 5.4 percent (July 2010-June 2011) to 4.8 percent (July
2012-June 2013).\39\ Additionally, hospital THA/TKA RSCR decreased from
3.4 percent (April 2010 through March 2011) to 3.1 percent (April 2012
through March 2013). Despite the downward trend of THA/TKA RSRRs and
RSCRs, the wide dispersion in these readmission rates suggests there is
still room for hospitals to improve their performance on these measures
as illustrated by a THA/TKA RSRR distribution of 2.8 to 9.4 percent
(July 2010-June 2013) and a THA/TKA RSCR distribution of 1.5 to 6.4
percent (April 2010-March 2013). We believe that the CCJR Model
provides another mechanism for hospitals to improve quality of care,
while also achieving cost efficiency. Incentivizing high-value care
through episode-based payments for LEJR procedures is a primary
objective of CCJR. Therefore, incorporating quality performance into
the episode payment structure is an essential component of the CCJR
model. We also believe that the financial opportunity proposed in
section III.C.3. of this proposed rule provides the appropriate
incentives necessary to reward a participant hospital's achievement of
episode savings when the savings are greater than the discounted target
price. For the reasons stated previously, we believe it is important
for the CCJR model to link the financial reward opportunity with
achievement in quality of care for Medicare beneficiaries undergoing
LEJR.
---------------------------------------------------------------------------
\39\ Hospital Quality Initiatives. CMS Hospital Quality
Chartbook 2014. Available at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Downloads/Medicare-Hospital-Quality-Chartbook-2014.pdf . Accessed
April 21, 2015.
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As discussed in section III.C of this proposed rule, which outlines
the payment structure for the CCJR model, each participant hospital
will have target prices calculated for MS-DRG 469 and 470 anchored
episodes; each anchored episode includes an anchor hospitalization for
an LEJR procedure and a 90-day period after the date of discharge from
the anchor hospitalization. These episode target prices represent
expected spending all related Part A and Part B spending for such
episodes, with a discount. Hospitals who achieve actual episode
spending below a target price for a given performance period would be
eligible for a reconciliation payment from CMS, subject to the proposed
stop-gain limit policy as discussed in section III.C.8. of this
proposed rule.
In the next section of this proposed rule, we propose quality
performance standards that must also be met in order for a hospital to
be eligible to receive a reconciliation payment under CCJR.
Specifically, we describe our proposal to include a performance measure
result threshold on select outcomes-based quality measures as a
requirement for participants to receive a reconciliation payment if
actual episode spending is
[[Page 41237]]
less than the target price under CCJR in a performance year, in
addition to a payment adjustment for successful reporting of a
voluntary measure in development. Beginning in performance year one and
continuing throughout the duration of the model, we propose to make
reconciliation payments only to those CCJR hospital participants that
meet or exceed a minimum measure result threshold. We also discuss an
alternative approach to determining CCJR reconciliation payment
eligibility and adjusting payment based on a quality score developed
from performance on three outcomes-based quality measures and success
in reporting the voluntary measurement in development.
b. Proposed Implementation of Quality Measures for Reconciliation
Payment Eligibility
In section III.D. of this proposed rule we propose three measures
to assess quality of care of the hospitals participating in the CCJR
Model. We also propose voluntary data submission for a patient-reported
outcome measure. In this section we propose using three measures to
determine eligibility for a reconciliation payment, as well as propose
rewarding hospitals that voluntarily submit data for the patient-
reported outcome measure. We also discuss an alternative approach to
determining reconciliation payment eligibility and adjusting payment
based on a composite quality score calculated from the three required
outcome measures and success on reporting voluntary data on the
patient-reported outcome measure.
(1) General Selection of Proposed Quality Measures
The CCJR model is designed to provide financial incentives to
improve coordination of care for beneficiaries that we expect to lead
to avoidance of post-surgical complications and hospital readmissions,
as well as to improve patient experience through care redesign and
coordination. Furthermore, we acknowledge that achievement of savings
while ensuring high-quality care for Medicare FFS beneficiaries in LEJR
episodes will require close collaboration among hospitals, physicians,
PAC providers, and other providers. In order to encourage care
collaboration among multiple providers of patients undergoing THA and
TKA, we propose three measures, as described in detail in section
III.D.2. of this proposed rule, to determine hospital quality of care
and to determine eligibility for a reconciliation payment under the
CCJR model. The measures we are proposing are as follows:
Hospital-level 30-day, all-cause RSRR following elective
primary THA and/or TKA (NQF #1551), an administrative claims-based
measure.
Hospital-level RSCR following elective primary THA and/or
TKA (NQF #1550), an administrative claims-based measure.
HCAHPS Survey measure.
Beginning in performance year 1 and continuing throughout the
duration of the model, we propose to make reconciliation payments only
to those CCJR participant hospitals that meet or exceed a minimum
performance threshold on the measures previously listed. We propose
that hospitals must meet or exceed the measure reporting thresholds and
other requirements described in section III.C and III.D. of this
proposed rule on all three measures in order to be eligible for a
reconciliation payment.
These three outcome measures were chosen due to their: (1)
Alignment with the goals of the CCJR model; (2) hospitals' familiarity
with the measures due to their use in other CMS hospital quality
programs, including programs that tie payment to performance such as
HVBP and HRRP; and (3) assessment of CMS priorities to improve the rate
of LEJR complications and readmissions, while improving patient
experience. We believe the three quality measures we propose for
reconciliation payment eligibility reflect these goals and accurately
measure hospitals' level of achievement on such goals.
(2) Proposal To Adjust the Payment Methodology for Voluntary Submission
of Data for Patient-Reported Outcome Measure
During our consideration of quality metrics for the CCJR model, we
examined the feasibility of linking voluntary data submission of
patient-reported outcomes, beyond the current three required measures
proposed in section III.D.2. of this proposed rule for use in the
model, with the possibility of incentivizing participant hospitals
under the episode payment model to participate in this voluntary
submission of data. We specifically examined potential patient-reported
outcome measures since this type of outcome measure aligns with the
CCJR model goal of improving LEJR episode quality of care, including a
heightened emphasis on patient-centered care where patients provide
meaningful input to their care. Furthermore, the availability of
patient reported outcome data would provide additional information on a
participant hospital's quality performance, especially with respect to
a patient's functional status, beyond the current three required
measures proposed in section III.D.2. of this proposed rule for use in
the model. We note that we have a measure in development, the Hospital-
Level Performance Measure(s) of Patient-Reported Outcomes Following
Elective Primary THA or TKA measure or both (hence forth referred to as
``THA/TKA patient-reported outcome-based measure''), that would support
the National Quality Strategy domain of patient and family engagement,
and could capture meaningful information that would not otherwise be
available on patient outcomes that are related to the quality of LEJR
episodes under CCJR. We believe that incorporating this measure into
CCJR by adjusting the payment methodology for successful voluntary data
submission on the THA/TKA patient-reported outcome-based measure
(henceforth referred to as ``THA/TKA voluntary data'') would provide
participant hospitals with valuable information on functional outcomes
that would assist them in assessing an important patient-centered
outcome, engaging other providers and suppliers in care redesign for
LEJR episodes, as well as provide them with the potential for greater
financial benefit from improved LEJR episode efficiencies. We do not
believe it would be appropriate at this time to hold any participant
hospitals financially accountable for their actual THA/TKA voluntary
data, as we have proposed for the three required measures described in
section III.C.5.b.(2) of this proposed rule.
Instead, we propose to adjust the episode payment methodology for
participant hospitals that successfully submit THA/TKA voluntary data
by reducing the discount percentage used to set the target price from
2.0 percent to 1.7 percent of expected episode spending based on
historical CCJR episode data, hereinafter referred to as the voluntary
reporting payment adjustment. The proposed payment policies with
respect to reconciliation payment eligibility and the discount
percentage based on hospital voluntary data submission are summarized
in Table 7 for performance years 3 through 5 where hospitals have full
repayment responsibility. The specific percentages that would apply for
purposes of the repayment amount and reconciliation payment are
outlined for performance years 1 and 2 in the discussion that follows.
[[Page 41238]]
Table 7--Reconciliation Payment Eligibility and Discount Percentage
Included in the Target Price for Each Participant Hospital Based on
Quality Performance in Performance Years 3-5
------------------------------------------------------------------------
Does not meet
Discount percentage included in Meets thresholds thresholds for one
target price/reconciliation for all 3 required or more of 3
payment eligibility quality measures required quality
measures
------------------------------------------------------------------------
Successfully submits THA/TKA 1.7%/eligible..... 1.7%/ineligible.
voluntary data.
Does not successfully submit THA/ 2.0%/eligible..... 2.0%/ineligible.
KA voluntary data.
------------------------------------------------------------------------
We refer readers to section III.D.3. of this proposed rule for
further discussion of the THA/TKA patient-reported outcome-based
measure and our proposed definition of successful reporting. In
addition, we refer readers to section III.C.4.b.(9) of this proposed
rule for discussion of the proposed discount of 2.0 percent (without
the voluntary reporting payment adjustment) to establish the target
price. We believe that a voluntary reporting payment adjustment of 0.3
percent of expected episode spending would, on average, cover the
participant hospitals' additional administrative costs of voluntarily
reporting patient risk variables and patient-reported reported function
for outcome calculation. We estimate the value of this discount
reduction, on average, to be about $75 per LEJR episode at a
participant hospital, which we believe would be sufficient to pay
hospitals for the resources required to survey beneficiaries pre- and
post-operatively about functional status and report this information
required for measure development to CMS. We also believe that voluntary
reporting on this patient-reported outcome measure is integral to
implementation of the CCJR model, as it will allow us to further
develop and evaluate the measure for potential use in this model in the
future as a measure of quality that is important and not captured in
any other available measures.
The voluntary reporting payment adjustment would be available for
all years of the model, unless we find the measure to be unfeasible or
have adequately developed the measure such that continued voluntary
data collection is no longer needed for measure development during the
course of the model. In those situations, we would notify participant
hospitals that the voluntary reporting payment adjustment was no longer
available as we would cease collecting the data.
When we provide the episode target price to each participant
hospital at 2 times during the performance year, we would provide
different target prices reflecting the 2.0 percent and 1.7 percent
discounts. At the time of reconciliation for the performance year, we
would determine which participant hospitals successfully reported the
THA/TKA voluntary data for that performance year. The effects of this
voluntary reporting payment adjustment would vary for each year of the
model, depending on the proposed reconciliation payment and repayment
policies for that performance year. For hospitals that achieved
successful reporting of the THA/TKA voluntary data in performance year
3, 4, or 5,we would use the target price reflecting the 1.7 percent
discount (compared with the 2.0 percent discount for nonreporting or
unsuccessfully reporting hospitals) to calculate the hospital's
reconciliation payment or repayment amount. Based on this comparison,
consistent with the proposal described in section III.C.6. of this
proposed rule, we would make a reconciliation payment if actual episode
spending is less than the target price (and the thresholds for
reconciliation payment eligibility are met for the three required
quality measures) or make participant hospitals responsible for
repaying Medicare if actual episode spending exceeds the target price.
For performance year 2, when repayment responsibility is being phased-
in, for participant hospitals with successful THA/TKA voluntary data
reporting, we would use a target price reflecting the 1.7 percent
discount (compared with the 2.0 percent discount for nonreporting or
unsuccessfully reporting hospitals) to determine if actual episode
spending was below the target price, whereupon the participant hospital
would receive a reconciliation payment if the quality thresholds on the
three required measures are met. In order to help hospitals transition
to taking on repayment responsibility, we propose to apply a reduced
discount of 0.7 percent for successful THA/TKA voluntary data reporting
hospitals (compared with 1.0 percent for nonreporting or unsuccessfully
reporting hospitals) in performance year 2 for purposes of determining
the hospital's repayment responsibility for excess episode spending.
For performance year 1, when there is no repayment responsibility, for
participant hospitals with successful THA/TKA voluntary data reporting,
we would use a target price reflecting the 1.7 percent discount
(compared with the 2.0 percent discount for nonreporting or
unsuccessfully reporting hospitals) to determine if actual episode
spending was below the target price, whereupon the participant hospital
would receive a reconciliation payment if the quality thresholds on the
three required measures are met. We believe this proposed voluntary
reporting payment adjustment provides the potential for increased
financial benefit for participant hospitals due to a higher target
price (that reflects a lower discount percentage) that successfully
report the measure. Participant hospitals that successfully report the
voluntary data would be subject to a lower repayment amount (except for
performance year 1 when hospitals have no repayment responsibility) or
a higher reconciliation payment (assuming the thresholds are met on the
three required measures for reconciliation payment eligibility), than
hospitals that do not successfully report the voluntary data.
In general, participant hospitals that meet the performance
thresholds for the three required quality measures and reduce actual
episode spending below the target price, as well as successfully report
the THA/TKA voluntary data, would be eligible to retain an additional
0.3 percent of the reduced episode expenditures relative to participant
hospitals that successfully report the three required quality measures
but do not report voluntary data, funds which would offset additional
administrative costs that the participant hospitals would incur in
reporting on the measure. Additionally, for performance years 2-5 where
participant hospitals have payment responsibility, participant
hospitals with increased actual episode spending above the target price
would not be required to repay 0.3 percent of the increased episode
expenditures (relative to participant hospitals that do not report
voluntary data), funds that would offset additional administrative
costs that the participant hospitals would incur in reporting on the
measure. These costs would include the hospital staff time required for
training on the measure, as well as then gathering and reporting on
multiple patient risk variables from LEJR episode
[[Page 41239]]
beneficiaries' medical records and locating beneficiaries and
administering via phone survey questions on functional status, which
would also then be reported to CMS. Thus, we expect that the proposal
would encourage reporting by a number of participant hospitals, and it
has the potential to benefit those hospitals that successfully report
on the measure. Therefore, this proposal could financially benefit
reporting hospitals that would also collect valuable information on
patient functional outcomes that could inform their LEJR care redesign.
While this measure remains in development from our perspective to
ensure translation of data across care settings and the respective
hospital communities during the 90-day post-discharge episode of care,
participant hospitals would gain anecdotal, locally relevant
information regarding the patient-reported outcomes of their own
patients that could inform participant hospitals' continuous quality
improvement efforts.
We considered two alternative options to adjust the CCJR payment
methodology by modifying the required quality measure thresholds for
reconciliation payment eligibility for those participant hospitals that
successfully submit the THA/TKA voluntary data. First, we considered
adjusting the threshold that hospitals must meet on the three required
quality measures for reconciliation payment eligibility if reduced
episode spending is achieved from the unadjusted 30th percentile
threshold to the adjusted 20th percentile threshold for performance
years 1, 2, and 3, and from the unadjusted 40th percentile to the
adjusted 30th percentile for performance years 4 and 5. Second, we
considered only requiring hospitals to meet the 30th percentile
threshold on two of three outcome measures for performance years 1, 2,
and 3, and the 40th percentile threshold on two of three outcome
measures for performance years 4 and 5. These options would provide the
opportunity for some participant hospitals, specifically those that
missed the unadjusted percentile for one or more of the three required
quality measures by a specified margin, to receive reconciliation
payments if actual episode spending was less than the target price.
However, these options could benefit only a subset of participant
hospitals that successfully reported the THA/TKA voluntary data. For
the majority of participant hospitals that we expect would meet the
unadjusted thresholds for all three required measures, these options do
not provide any incentive to voluntarily report the data because the
hospitals would not benefit from voluntarily reporting the additional
measure. We decided not to propose either of these options to adjust
the CCJR payment methodology for participant hospitals that voluntarily
report data on the new measure because the limited benefit could result
in few hospitals choosing to report on the measure, thereby limiting
our progress in developing the measure. We note that these two
considered options and our proposal are not mutually exclusive.
We seek comment on the proposed voluntary reporting payment
adjustment of reducing the discount percentage from 2.0 percent to 1.7
percent for CCJR participant hospitals that voluntarily and
successfully report on the THA/TKA voluntary data. Given our interest
in robust hospital participation in reporting on the THA/TKA voluntary
data under CCJR, we are specifically interested in information on the
additional resources and their associated costs that hospitals would
incur to report THA/TKA voluntary data, as well as the relationship of
these costs to the potential financial benefit participant hospitals
could receive from the proposed reduced discount of 1.7 percent. Based
on such information, we would consider whether a change from the
proposed discount factor reduction due to successful voluntary data
submission would be appropriate. We also seek comment on whether the
alternative payment methodology adjustments considered, or combination
of adjustments, would more appropriately incentivize CCJR participant
hospitals to submit THA/TKA voluntary data. We believe that development
of the THA/TKA patient-reported outcome measure would benefit from
reporting by a broad array of participant hospitals, including those
that currently deliver high quality, efficient LEJR episode care and
those that have substantial room for improvement on quality and or
cost-efficiency.
Furthermore, in light of our interest in encouraging CCJR
participant hospital THA/TKA voluntary data reporting, we also
considered alternative approaches to collect this information or
provide hospitals with funds to help cover their associated
administrative costs other than adjustments to the CCJR model payment
methodology. One alternative would be for hospitals to collect and
report on patient pre-operative information collected 0 to 90 days
before surgery, while CMS would engage a contractor to collect and
report the post-operative information collected 9 to 12 months after
surgery. This approach would reduce some of the administrative burden
of collection and reporting on hospitals, although participant
hospitals would need to provide CMS with certain beneficiary
information, including contact information that would be needed for a
CMS contractor to contact the beneficiary at a later date. We seek
comment on this alternative, including whether hospitals would incur
significant additional administrative costs to report on the data prior
to surgery and how CMS could best provide funds to offset some of those
costs, through an adjustment to the CCJR payment methodology or other
means. We also seek comment on the information participant hospitals
would need to provide to CMS so a CMS contractor could collect and
report the post-operative data, and the most efficient ways for
hospitals to provide this information to us. Finally, we considered an
approach that would provide hospitals with separate payment outside of
an adjustment to the CCJR payment methodology to specifically assist in
covering their administrative costs of reporting THA/TKA voluntary
data, in order to achieve robust hospital participation in reporting.
We seek comment on the hospital administrative costs that would be
incurred for reporting, as well as on approaches we could take to
ensure that hospitals achieved successful reporting under such an
approach if separate payment was made. Finally, we are interested in
comments regarding the comparative strength of these various
alternatives in encouraging hospitals to participate in reporting THA/
TKA voluntary data.
For a detailed description of this measure see section III.D.3 of
this proposed rule
(3) Measure Risk-Adjustment and Calculations
All three proposed outcome measures are risk-adjusted and we refer
readers to section III.D.2 of this proposed rule for a full discussion
of these measures and risk-adjustment methodologies. We believe that
risk-adjustment for patient case-mix is important when assessing
hospital performance based on patient outcomes and experience and
understanding how a given hospital's performance compares to the
performance of other hospitals with similar case-mix.
(4) Applicable Time Period
We propose to use a 3-year rolling performance or applicable period
for the
[[Page 41240]]
Hospital-level 30-day, all-cause RSRR following elective primary THA
and/or TKA (NQF #1551) and the Hospital-level RSCR following elective
primary THA and/or TKA (NQF #1550) measures. We also specifically
propose to align with the HIQR program's 3-year rolling performance
period for the RSSR and RSCR measures since we believe that a 3-year
performance period yields the most consistently reliable and valid
measure results (FY 2015 IPPS/LTCH 70 FR 50208 through 50209). For the
HCAHPS Survey measure, we propose to follow the same performance period
as in the HIQR program (FY 2015 IPPS/LTCH Final rule 79 FR 50259).
HCAHPS scores are created from 4 consecutive quarters of survey data;
publicly reported HCAHPS results are also based on 4 quarters of data.
For the voluntary data collection for the proposed THA/TKA patient-
reported outcome-based performance measure, the optimal reporting time
period has not been determined. Therefore, we propose defining the
applicable time period as 12 month intervals that may begin between
July 1, 2016 and December 31, 2016, and continue in subsequent
performance years for a total of four or fewer performance periods.
Participant hospitals will submit required data to CMS in a mechanism
similar to the data submission process for the HIQR program within
sixty days of the end of each 12 month period. As described in section
III.C.5.b.(3) of this proposed rule, the proposed voluntary reporting
payment adjustment of reducing the discount percentage from 2.0 percent
to 1.7 percent for CCJR participant hospitals that successfully report
on the THA/TKA voluntary data would begin in year 2 and also apply to
subsequent years of the model.
(5) Criteria for Applicable Hospitals and Performance Scoring
(a) Identification of Participant Hospitals for the CCJR Model
As discussed in section III.A.2 of this proposed rule, all CCJR
participant hospitals would be IPPS hospitals.
(b) Methodology to Determine Performance on the Quality Measures
To determine performance on the quality measures, we propose to
calculate measure results for all three measures as outlined in the
Quality Measures section III.D.2 of this proposed rule. Performance on
the three measures for the CCJR model participant hospitals would be
compared to the national distribution of measure results for each of
these measures obtained through the HIQR program. The HIQR program is
an IPPS program in which public reporting is a focus of the program for
the nation's acute care hospitals, and we propose using the absolute
value of the CCJR model participant hospital's result to determine if
that participant hospital is eligible for a reconciliation payment. In
essence we intend to take the HIQR program measure results (also posted
publicly) for the proposed measures, identify the threshold as outlined
in section III.C.5.b.(3) of this proposed rule, and apply the
thresholds also outlined in section III.C.5.b.(7) of this proposed
rule. We believe it is reasonable to use the HIQR program distribution
of measure results to identify a measure result threshold because--(1)
the hospitals in the HIQR program represent most acute care hospitals
in the nation; (2) the CCJR model participant hospitals are a subset of
the hospitals in the HIQR program; and (3) the expectation that the
CCJR model participant hospitals meet a measure result threshold based
on a national distribution of measure results will encourage the CCJR
model participant hospitals to strive to attain measure results
consistent with or better than hospitals across the nation. For a
detailed description of how we will determine the measure result
thresholds for consideration of a reconciliation payment adjustment see
section III.C.5.b.(3) and III.C.7.of this proposed rule. We would not
want to encourage CCJR model participant hospitals to strive for
measure results or quality of care performance that may be lower than
the national measure results. Given that the CCJR participant hospitals
are a subset of the HIQR program participant hospitals, they are
familiar with these three measures and may have put into place
processes that will help to improve quality of care in the LEJR patient
population. Finally, once the measure results are calculated, we
propose to use these results to determine eligibility for
reconciliation payment, which is discussed in detail in the next
section.
To be considered to have successfully reported the voluntary data
collection and submission for the THA/TKA voluntary data, we propose
that successfully reporting will mean participant hospitals must meet
all of the following:
Submit the data elements listed in section III.D.3.a.(2)
of this proposed rule.
Data elements listed in section III.D.3.a.(2) of this
proposed rule must be submitted on at least 70 percent of their
eligible elective primary THA/TKA patients (patients eligible for pre-
operative THA/TKA voluntary data submission are those described in
section III.D.3.a.(3)of this proposed rule); patients eligible for
post-operative THA/TKA voluntary data submission are those described in
section III.D.3.a(3) of this proposed rule and also having a THA/TKA
procedure date during the anchor hospitalization at least 366 days
prior to the end of the data collection period. Therefore, hospitals
are not expected to collect and submit post-operative THA/TKA voluntary
data on patients who are fewer than 366 days from the date of surgery.
THA/TKA voluntary data submission must occur within 60
days of the end of the most recent 12 month period.
Hospitals meeting these three standards, and have successfully
submitted THA/TKA voluntary data, will be eligible for the proposed
voluntary reporting payment adjustment of reducing the discount
percentage from 2.0 percent to 1.7 percent for CCJR participant
hospitals that voluntarily and successfully report on the THA/TKA
voluntary data. Encouraging collection and submission of the THA/TKA
voluntary data through the CCJR model will increase availability of
patient-reported outcomes to both participant hospitals that collect
and submit data on their own patients in the model (and their patients
as well); further development of an outcomes measure that provides
meaningful information on patient-reported outcomes for THA/TKA
procedures that are commonly furnished to Medicare beneficiaries;
provide another quality measure that may be incorporated into the CCJR
model policy linking quality to payment in future performance years,
pending successful development of the measure; and inform the quality
strategy of future payment models. Collecting data on at least 70
percent of hospital's eligible THA/TKA patients would provide
sufficiently representative data to allow for development and testing
of the THA/TKA patient-reported outcome-based performance measure.
We invite public comment on the proposal to calculate measure
results for all three measures as outlined in the Quality Measures
section III.D.2 of this proposed rule. We also seek public comment on
our proposal for hospitals to meet three requirements, previously
outlined, in order to be considered as successfully submitting THA/TKA
voluntary data.
[[Page 41241]]
(c) Proposed Methodology To Link Quality and Payment
(i) Background
In proposing a methodology for linking payment for LEJR episodes to
quality under this model, we considered several alternatives.
Specifically, we considered making reconciliation payments to hospitals
tied to achievement and improvement in quality performance or,
alternatively, establishing minimum quality performance thresholds for
selected quality measures from the beginning of the model or a later
year, which would reward achievement but not necessarily improvement.
While we propose in section III.C.5.b.(6)(c) of this proposed rule to
establish minimum thresholds for participant hospital performance on
three selected quality measures for reconciliation payment eligibility
each performance year from the beginning of the model, we also discuss
in detail an alternative we considered, which would make quality
incentive payments related to hospital achievement and improvement on
the basis of a composite quality score developed for each performance
year. The composite quality score would affect reconciliation payment
eligibility and change the effective discount included in the target
price experienced by a participant hospital at reconciliation.
Similar to the proposal described in section III.C.5.b.(6)(c) of
this proposed rule, the alternatives considered would require a
determination of participant hospital performance on all three required
quality measures, described in section III.D. of this proposed rule,
based on the national distribution of hospital measure result
performance, but instead of identifying the participant hospital's
performance percentile for comparison with a threshold requirement, we
would do so for purposes of assigning points toward a hospital
composite quality score. Both the hospital-level 30-day, all cause
Risk-Standardized Readmission Rate (RSRR) following elective primary
THA and/or TKA (NQF #1551) measure and the hospital-level Risk-
Standardized Complication Rate (RSCR) following elective primary THA
and/or TKA (NQF #1550) measure directly yield rates for which a
participant hospital performance percentile could be determined and
compared to the national distribution in a straightforward manner. As
discussed in section III.D.2.c.of this proposed rule, we propose to use
the HCAHPS Linear Mean Roll Up (HLMR) score calculated using the HCAHPS
Survey (NQF #1661) measure. Once the HLMR scores are calculated, the
participant hospital performance percentile could also be determined
and compared to the national distribution in a straightforward manner.
In addition, the alternatives considered would account for the
successful submission of voluntary THA/TKA data on the patient-reported
outcome measure, as discussed in section III.C.5.b.(2) of this proposed
rule, in the calculation of the composite quality score.
(ii) Alternatives Considered To Link Quality and Payment
We considered assigning each participant hospital a composite
quality score, developed as the sum of the individual quality measure
scores described later in this section, which were set to reflect the
intended weights for each of the quality measures and the successful
submission of THA/TKA voluntary data in the composite quality score.
The participant hospital's composite quality score would affect
reconciliation payment eligibility and could also provide the
opportunity for quality incentive payments under the CCJR model. Each
quality measure would be assigned a weight in the composite quality
score and possible scores for the measures would be set to reflect
those weights. A composite quality score for each performance year
would be calculated for each participant hospital based on its own
performance that would affect reconciliation payment eligibility and
the hospital's opportunity to receive quality incentive payments under
the model. The composite quality score would also change the effective
discount included in the target price experienced by the hospital at
reconciliation for that performance year. We would weigh participant
hospital performance on each of the three measures and successful
submission of voluntary THA/TKA data according to the measure weights
displayed in Table 8.
Table 8--Quality Measure Weights in Composite Quality Score
------------------------------------------------------------------------
Weight in
composite
Quality measure quality score
%
------------------------------------------------------------------------
Hospital[dash]level 30[dash]day, all[dash]cause RSRR 20
following elective primary THA and/or TKA (NQF #1551)..
Hospital[dash]level RSCR following elective primary THA 40
and/or TKA (NQF #1550).................................
HCAHPS survey (NQF #1661)............................... 30
Voluntary THA/TKA data submission on 10
patient[dash]reported outcome measure..................
------------------------------------------------------------------------
We would assign the lowest weight of 10 percent to the successful
submission of THA/TKA data on the patient-reported outcome measure
because these data represent a hospital's meaningful participation in
advancing the quality measurement of LEJR patient-reported outcomes but
not actual outcome performance for LEJR episodes under the CCJR model.
We believe the three required measures that represent LEJR outcomes
deserve higher weights in the composite quality score. We would assign
a modest weight of 20 percent to the readmissions measure because,
while we believe that readmissions are an important quality measure for
LEJR episodes, the episode payment methodology under the model already
provides a strong financial incentive to reduce readmissions that
otherwise would contribute significantly to greater actual episode
payments. Furthermore, hospitals generally have already made
significant strides over the past several years in reducing
readmissions due to the inclusion of this measure in other CMS hospital
programs that make payment adjustments based on performance on this
measure. We believe that a higher weight than 20 percent would
overvalue the contribution of readmissions performance as an indicator
of LEJR episode quality in calculating the composite quality score.
Furthermore, other CMS hospital programs may also make a payment
adjustment based on hospital performance on the readmissions measure so
we would not want this measure to also strongly influence
reconciliation payment eligibility and the opportunity for quality
incentive payments under the CCJR model. We would assign a higher
[[Page 41242]]
weight of 30 percent to the HCAHPS survey measure because we believe
that incorporating this quality measure, which reflects performance
regarding patients' perspectives on care, including communication, care
transitions, and discharge information, is a highly meaningful outcome
measure of LEJR episode quality under the CCJR model. However, we do
not propose to assign the HCAHPS survey measure the highest weight of
the four measures, as the measure is not specific to LEJR episode care,
but rather to all clinical conditions treated by participant hospitals.
Finally, we would assign the highest weight, 40 percent, to the
complications measure. We believe this measure should be weighted the
most because it is specific to meaningful outcomes for primary THA and
TKA that are the major procedures included in LEJR episodes under the
CCJR model. The measure includes important complications of LEJR
episodes, such as myocardial infarction, pneumonia, surgical site
bleeding, pulmonary embolism, death, mechanical joint complications,
and joint infections occurring within various periods of time during
the LEJR episode. LEJR episodes under the CCJR model are broadly
defined so that reducing complications should be a major focus of care
redesign that improves quality and efficiency under this model, yet
because complications may not be as costly as readmissions, the payment
incentives under the model do not as strongly target reducing
complications as reducing readmissions. We seek comment on this
weighting of the individual quality scores in developing a composite
quality score for each participant hospital.
Under such an approach, we would first score individually each
participant hospital on the Hospital-level 30-day, all-cause RSRR using
the elective primary THA and/or TKA (NQF #1551) measure; Hospital-level
RSCR following using the elective primary THA and/or TKA (NQF #1550)
measure; and HCAPHS survey (NQF #1661) measure based on the participant
hospital's performance percentile as compared to the national
distribution of hospitals' measure performance, assigning scores
according to the point values displayed in Table 9 These individual
measure scores have been set to reflect the measure weights included in
Table 9 so they can ultimately be summed without adjustment in
calculating the composite quality score.
Table 9--Individual Scoring for Three Required Quality Measures
----------------------------------------------------------------------------------------------------------------
Complications HCAHPS survey Readmissions
Performance percentile measure quality quality score measure quality
score (points) (points) score (points)
----------------------------------------------------------------------------------------------------------------
>=90\th\............................................... 8.00 6.00 4.00
>=80\th\ and <90\th\................................... 7.40 5.55 3.70
>=70\th\ and <80\th\................................... 6.80 5.10 3.40
>=60\th\ and <70\th\................................... 6.20 4.65 3.10
>=50\th\ and <60\th\................................... 5.60 4.20 2.80
>=40\th\ and <50\th\................................... 5.00 3.75 2.50
>=30\th\ and <40\th\................................... 4.40 3.30 2.20
<30\th\................................................ 0.00 0.00 0.00
----------------------------------------------------------------------------------------------------------------
Given the current national distribution of hospital performance on
these measures, we believe that small point increments related to
higher measure performance deciles would be the most appropriate way to
assign more points to reflect meaningfully higher quality performance
on the measures. The absolute differences for each decile among the
three measures reflect the intended weight of the measure in the
composite quality score. We would assign any low volume participant
hospital without a reportable value for the measure to the 50th
performance percentile of the measure, so as not to disadvantage a
participant hospital based on its low volume alone because that
hospital may in actuality provide high quality care. These three
measures are well-established measures in use under CMS hospital
programs, so we do not believe that scores below the 30th percentile
reflect quality performance such that they should be assigned any
individual quality measure score points for LEJR episodes under CCJR.
However, we also considered reducing scores incrementally across the
bottom three deciles in order to provide greater incentives for quality
improvement for hospitals that may not believe they can attain the 30th
performance percentile on one or more of the three measures and to
avoid creating a ``cliff'' at the 30th performance percentile. We seek
comment on this scoring approach to the three required quality
measures.
Additionally, we would assign a measure quality score of one point
for participant hospitals that successfully submit THA/TKA voluntary
data and 0 points for participant hospitals that do not successfully
submit these data. Because we would not use the actual THA/TKA
voluntary data on the patient-reported outcome measure in assessing
LEJR episode quality performance under the model, we propose this
straightforward binary approach to scoring the submission of THA/TKA
voluntary data for the patient-reported outcome measure development.
We note that the MSSP utilizes a similar scoring and weighting
methodology, which is described in detail in the CY2011 Shared Savings
Program Final Rule (see Sec. 425.502). The HVBP and HACRP programs
also utilize a similar scoring methodology, which applies weights to
various measures and assigns an overall score to a hospital (79 FR
50049 and 50102).
We would sum the score on the three quality measures and the score
on successful submission of THA/TKA voluntary data to calculate a
composite quality score for each participant hospital. Then we would
incorporate this score in the model payment methodology by first,
requiring a minimum composite quality score for reconciliation payment
eligibility if the participant hospital's actual episode spending is
less than the target price and second, by making quality incentive
payments that change the effective discount percentage included in the
target price experienced by the hospital in the reconciliation process.
The payment policies we would apply are displayed in Tables 10, 11, and
12 for the performance years of the model. Under the CCJR model as
proposed, there is no participant hospital repayment responsibility in
performance year 1 and this responsibility begins to be phased-in in
[[Page 41243]]
performance year 2, with full implementation in performance year 3.
Table 10--Performance Year 1: Relationship of Composite Quality Score to Reconciliation Payment Eligibility and
the Effective Discount Percentage Experienced at Reconciliation
----------------------------------------------------------------------------------------------------------------
Effective
Eligible for Eligible for discount Effective discount
Composite quality score reconciliation quality incentive percentage for percentage for
payment payment reconciliation repayment amount
payment
----------------------------------------------------------------------------------------------------------------
<=5.00.......................... No................. No................ 3.0 Not applicable.
>5.00 and <=9.25................ Yes................ No................ 3.0 Not applicable.
>9.25 and <=15.20............... Yes................ Yes............... 2.0 Not applicable.
>15.20.......................... Yes................ Yes............... 1.5 Not applicable.
----------------------------------------------------------------------------------------------------------------
Table 11--Performance Year 2: Relationship of Composite Quality Score to Reconciliation Payment Eligibility and
the Effective Discount Percentage Experienced at Reconciliation
----------------------------------------------------------------------------------------------------------------
Effective
Eligible for Eligible for discount Effective
Composite quality score reconciliation quality incentive percentage for discount
payment payment reconciliation percentage for
payment repayment amount
----------------------------------------------------------------------------------------------------------------
<=5.00.......................... No................. No................. 3.0 2.0
>5.00 and <=9.25................ Yes................ No................. 3.0 2.0
>9.25 and <=15.20............... Yes................ Yes................ 2.0 1.0
>15.20.......................... Yes................ Yes................ 1.5 0.5
----------------------------------------------------------------------------------------------------------------
Table 12--Performance Years 3-5: Relationship of Composite Quality Score to Reconciliation Payment Eligibility
and the Effective Discount Percentage Experienced at Reconciliation
----------------------------------------------------------------------------------------------------------------
Effective
Eligible for Eligible for discount Effective
Composite quality score reconciliation quality incentive percentage for discount
payment payment reconciliation percentage for
payment repayment amount
----------------------------------------------------------------------------------------------------------------
<=5.00.......................... No................. No................. 3.0 3.0
>5.00 and <=9.25................ Yes................ No................. 3.0 3.0
>9.25 and <=15.20............... Yes................ Yes................ 2.0 2.0
>15.20.......................... Yes................ Yes................ 1.5 1.5
----------------------------------------------------------------------------------------------------------------
Under this approach, the CCJR model discount included in the target
price without consideration of the composite quality score would be 3.0
percent, not the 2.0 percent described under our payment proposal in
section III.C.4.b.(9) of this proposed rule. We believe that a discount
percentage of 3.0 percent without explicit consideration of episode
quality is reasonable as it is within the range of discount percentages
included in the ACE demonstration and it is the Model 2 BPCI discount
factor for 30 and 60 day episodes, where a number of BPCI participants
are testing LEJR episodes subject to the 3.0 percent discount factor.
Hospitals that provide high quality episode care would have the
opportunity to receive quality incentive payments that would reduce the
effective discount percentage as displayed in Tables 10, 11, and 12.
Depending on the participant hospital's actual composite quality score,
quality incentive payments could be valued at 1.0 percent to 1.5
percent of the hospital's benchmark episode price (that is, of the
expected episode spending prior to application of the discount factor
to calculate a target price).
Under this methodology, we would require hospitals to achieve a
minimum composite quality score of greater than 5.00 to be eligible for
a reconciliation payment if actual episode spending was less than the
target price. Participant hospitals with below acceptable quality
performance reflected in a composite quality score less than or equal
to 5.00 would not be eligible for a reconciliation payment if actual
episode spending was less than the target price. A level of quality
performance that is below acceptable would not affect participant
hospitals' repayment responsibility if actual episode spending exceeds
the target price. We believe that excessive reductions in utilization
that lead to low actual episode spending and that could result from the
financial incentives of an episode payment model would be limited by a
requirement that this minimum level of LEJR episode quality be achieved
for reconciliation payments to be made. This policy would encourage
hospitals to focus on appropriate reductions or changes in utilization
to achieve high quality care in a more efficient manner. Therefore,
these hospitals would be ineligible to receive a reconciliation payment
if actual episode spending was less than the target price.
For hospitals with composite quality scores of less than or equal
to 5.00, we also considered a potential alternative approach. Under
this approach, we would still permit this group of hospitals to receive
reconciliation payments but would impose a quality penalty that would
reduce their effective discount percentage to 4.0 percent for purposes
of calculating the reconciliation payment or recoupment amount in
performance years 3 through 5, 4.0 percent for calculating the
reconciliation payment and 3.0 percent for calculating the repayment
amount in performance year 2, and 4.0 percent for calculating the
reconciliation payment in performance year 1 where participant
[[Page 41244]]
hospitals have no repayment responsibility. A potential advantage of
this approach is that it would provide stronger incentives for quality
improvement for participant hospitals with low performance on quality,
even if they did not expect to be able to reduce actual episode
spending below the target price. In addition, this approach would
provide financial incentives to improve the efficiency of care even for
hospitals that did not expect to meet the minimum quality score for
reconciliation payment eligibility, while still providing strong
incentives to provide high-quality care. The disadvantage of this
approach is that it could provide reconciliation payments even to
hospitals that did not achieve acceptable quality performance.
Participant hospitals with an acceptable composite quality score of
>5.00 and <=9.25 would be eligible for a reconciliation payment if
actual episode spending was less than the target price because their
quality performance was at the acceptable level established for the
CCJR model. They would not be eligible for a quality incentive payment
at reconciliation because their episode quality performance, while
acceptable, was not good or excellent. Therefore, these hospitals would
be eligible to receive a reconciliation payment if actual episode
spending was less than the target price.
Participant hospitals with a good composite quality score of >9.25
and <=15.20 would be eligible for a quality incentive payment at
reconciliation if actual episode spending was less than the target
price because their quality performance exceeded the acceptable level
required for reconciliation payment eligibility under the CCJR model.
In addition, they would be eligible for a quality incentive payment at
reconciliation for good quality performance that equals 1.0 percent of
the participant hospital's benchmark price, thereby changing the
effective discount percentage included in the target price experienced
by the hospital at reconciliation. Thus, participant hospitals
achieving this level of quality for LEJR episodes under CCJR would
either have less repayment responsibility (that is, the quality
incentive payment would offset a portion of their repayment
responsibility) or receive a higher payment (that is, the quality
incentive payment would add to the reconciliation payment) at
reconciliation than they would have otherwise based on a comparison of
actual episode spending to the target price that reflects a 3.0 percent
discount. Therefore, these hospitals would be eligible to receive a
reconciliation payment if actual episode spending was less than the
target price and would also receive a quality incentive payment.
Finally, hospitals with an excellent composite score quality score
of >15.20 would be eligible to receive a reconciliation payment if
actual episode spending was less than the target price because their
quality performance exceeded the acceptable level required for
reconciliation payment eligibility under the CCJR model. In addition,
they would be eligible for a higher quality incentive payment at
reconciliation for excellent quality performance that equals 1.5
percent of the participant hospital's benchmark price, thereby changing
the effective discount percentage included in the target price
experienced by the hospital at reconciliation. Thus, participant
hospitals achieving this level of quality for LEJR episodes under CCJR
would either have less repayment responsibility (that is, the quality
incentive payment would offset a portion of their repayment
responsibility) or receive a higher payment (that is, the quality
incentive payment would add to the reconciliation payment) at
reconciliation than they would have otherwise based on a comparison of
actual episode spending to the target price that reflects a 3.0 percent
discount. Therefore, these hospitals would be eligible to receive a
reconciliation payment if actual episode spending was less than the
target price and would also receive a quality incentive payment.
Under this methodology, the proposed stop-loss and stop-gain limits
discussed in section III.C.8 of this proposed rule would not change. We
believe this approach to quality incentive payments based on the
composite quality score could have the effect of increasing the
alignment of the financial and quality performance incentives under the
CCJR model to the potential benefit of participant hospitals and their
collaborators as well as CMS, although it would substantially increase
the complexity of the methodology to link quality and payment. We seek
comment on this alternative approach to basing reconciliation payment
eligibility and quality incentive payments on the participant
hospital's composite quality score under the CCJR model, as well as the
composite quality scoring ranges applicable to the respective payment
policies.
While we describe in detail this alternative considered to link
quality to payment under CCJR, we are not proposing this methodology
for several reasons. First, the MSSP and HVBP program utilize many more
measures than we are proposing for the CCJR model. For example, the
MSSP incorporates thirty three measures across four quality domains (79
FR 67916 and 67917). The range of measures in the MSSP and the HVBP
program lends itself to a scoring approach, which can account for many
measures and allows providers to achieve a high score despite
performing well on some measures but achieving lower performance on
others. There is a detailed description of the MSSP scoring methodology
in the 2011 Shared Savings Program Final rule (76 FR 67895 through
67900). We believe that given the more limited set of measures chosen
for the CCJR model, a scoring approach such as the alternative
described in this section could diminish the importance of each
measure. Use of a scoring approach would not allow hospital performance
on two different outcomes to be easily reviewed and understood with
respect to the impact of individual measure performance on Medicare's
actual payment for the episode under the model. Second, we believe the
measures proposed for this model represent goals of clinical care that
should be achievable by all hospitals participating in the model that
heighten their focus on these measures, especially the readmissions and
complications measures, for LEJR episodes based on the financial
incentives in the model. Finally, we believe that a methodology that
assesses performance based on absolute values of a specific set of
measures that are already in use, as we are proposing for the CCJR
model, is the most appropriate methodology to provide achievable and
predictable quality targets for participant hospitals on measures that
monitor the most meaningful quality of care outcomes in a model where
some acute care hospitals that might not choose to participate in a
voluntary model are also included. Our proposed method as discussed in
the next section reflects our expectation that hospitals achieve a
certain level of performance on measures to ensure that hospitals
provide high-quality care under the model.
Finally, we also considered an approach whereby participant
hospitals would not be penalized with regard to their eligibility for
reconciliation payments in CCJR for failure to meet the specified
thresholds for the quality measures in performance year 1 of the model;
in other words, we would delay the proposal described in the next
[[Page 41245]]
section to performance year 2 rather than beginning in performance year
1. We considered calculating participant hospital performance on the
required measures for the model, and, if actual episode spending was
less than the target price, the participant hospital would receive a
full reconciliation payment of savings achieved beyond the target
price, regardless of performance on the quality measures. However, we
do not believe this would be appropriate for the CCJR model, given that
two of the measures are administrative claims-based and thus impose no
additional reporting burden on hospitals; rather, these two measures
are established measures in existing CMS quality programs, and a
central goal of the model is improving care for Medicare beneficiaries
in LEJR episodes. We note that the HCAHPS survey measure is also an
established measure in HIQR and would not impose additional reporting
burden on hospitals.
(iii) Proposal To Link Quality and Payment Through Thresholds for
Reconciliation Payment Eligibility
For the reasons outlined in the previous section, we do not propose
to use similar methodologies to other CMS programs that would tie CCJR
episode reconciliation payment eligibility and reconciliation payment
and Medicare repayment amounts to a composite quality score on
specified quality measures, but as discussed later in this section, we
instead propose to simply assess performance or achievement on a
quality measure by setting a measure result threshold for each measure
beginning in performance year 1 of the model.
The CCJR measure result threshold would be based on the measure
results from the HIQR program, a nationally-established program, and
would use its national distribution of measure results. These are the
same measure results posted on Hospital Compare or in the Hospital
Compare downloadable database (https://data.medicare.gov/data/hospital-compare) for the HIQR program. We refer readers to the earlier
discussion of the HIQR Program, which utilizes measures to assess most
acute care hospitals in the nation. Determining the CCJR model target
thresholds are discussed in the next section.
As previously described, the CCJR model proposes the following
three required measures to assess LEJR episode quality of care:
Hospital-level 30-day, all-cause RSRR following elective
primary THA and/or TKA (NQF #1551).
Hospital-level RSCR following elective primary THA and/or
TKA (NQF #1550).
HCAHPS survey (NQF #0166).
We also propose to make a voluntary reporting payment adjustment
for CCJR participant hospitals who successfully and voluntarily submit
data for the THA/TKA patient-reported outcome-based performance measure
(henceforth referred to as ``THA/TKA voluntary data'') as described in
sections III.C.5.b.(3) and III.D.3.a.(2) of this proposed rule. We
propose that participant CCJR hospitals must meet or surpass a
specified threshold for each required measure beginning for performance
year 1 of the model in order to be eligible for a reconcilation payment
if actual episode payments are less than the target price. The
calculation of the HCAHPS survey measure is described in section
III.D.2.c.of this proposed rule. We propose to use the individual
measure results calculated as specified in section III.D. of this
proposed rule for the three required measures to determine hospital
eligibility for reconciliation payment for each performance year of the
CCJR model. Also, as discussed in section III.C.4 of this proposed
rule, which outlines the payment structure for the CCJR model, target
prices for MS-DRG 470 anchored episodes and for MS-DRG 469 anchored
episodes will be calculated for hospitals participating in the model
for an episode of care extending 90-days after discharge from the
anchor hospitalization. Participant hospitals that achieve actual
episode payment below the specified target price for a given
performance period would be eligible for a reconciliation payment,
provided that the participant hospital also met episode quality
thresholds on the three required measures for the performance period.
We propose to use the following quality criterion to determine if a
participant hospital qualifies for a reconciliation payment based on
the episode quality thresholds on the three required measures:
The hospital's measure result is at or above the 30th percentile of
the national hospital measure results calculated for all HIQR-program
participant hospitals for each of the three required measures for each
performance period (for a detailed description of how we determined the
performance period and reconciliation payment eligibility, see section
III.C.5. of this proposed rule).
Using HIQR program's 3 year rolling period as outlined in section
III.D.2.a.(6) and III.D.2.b.(6) of this proposed rule, if a participant
hospital performed at or above the 30th percentile of all HIQR program
hospitals for each of the three required measures and if actual episode
payment was less than the target price for the specified performance
year, we would make a reconciliation payment to the hospital. Failure
to achieve the threshold on one or more measures would result in the
participant hospital not receiving a reconciliation payment regardless
of whether the actual episode payment was less than the target price
for that performance period. We propose that for hospitals with
insufficient volume to determine performance on an individual measure,
these hospitals will be considered to be performing at the threshold
level and their results will be publicly posted with all other
participant hospitals' measure results (for a detailed summary of
public reporting, see section III.D.5. of this proposed rule). We do
not believe it would be appropriate to potentially penalize high
quality, efficient hospitals due to their low volume, given that
meeting the required quality measure thresholds is required for
reconciliation payment eligibility.
We also propose for performance years 4 and 5 to increase the
measure result threshold to the 40th percentile. We believe that
increasing the measure result threshold to the 40th percentile would
encourage participants to strive for continued quality improvement
throughout the 5 performance years of the model. We seek comment on our
proposal to make a reconciliation payment to a participant hospital
that achieves actual episode spending below the target price for a
performance year and performs at or above the 30th percentile of HIQR
program participant hospitals for all three required quality measures
in performance years 1 through 3 or the 40th percentile in performance
years 4 and 5, as well as our proposal to consider low volume hospitals
to be performing at the threshold level.
We propose to require hospitals to meet the threshold for all three
measures for the following reasons. The measures chosen for this model
are fully developed, NQF-endorsed, and implemented measures in CMS IPPS
programs. These measures are also publicly reported on the Hospital
Compare Web site. Hospitals are familiar with the complications and
readmissions quality measures and with the HCAHPS Survey, as they are
currently included in HIQR, HVBP, and HRRP (79 FR 50031, 50062, 50208,
50209 and 50259), and we believe that there is minimal additional
administrative burden for hospitals. All three measures are widely
utilized nationally; thus, a nationally-based
[[Page 41246]]
threshold is an appropriate benchmark. In addition, the goal of the
CCJR model is LEJR episode care redesign that includes effective care
coordination and management of care transitions. Strategies to prevent
and efficiently manage post-procedure complications and hospital
readmissions following an LEJR procedure are consistent with the goals
of the model; a hospital cannot succeed in this model without engaging
in care redesign efforts that would address aspects of care included in
these measures. Failure to perform successfully on these key quality
measures (defined by meeting the minimum thresholds) would indicate
that hospitals are not achieving quality consistent with the goals of
the model to specifically incentivize greater improvement on these
measures than hospitals not participating in the CCJR model, and should
not be eligible to receive a reconciliation payment from Medicare even
if reduced episode spending is achieved. Finally, the approach we
propose is consistent with CMS' goal of moving hospitals and other
providers to value-based payment that ties payment to quality. In the 5
performance years of this model, performance on quality measures would
only be applied to determining eligibility for a reconciliation
payment; quality measures would not be used to determine participant
hospitals' financial responsibility, except for the proposed voluntary
reporting payment adjustment described in described in section
III.C.5.b.(3) of this proposed rule. In essence, participant hospitals'
responsibility to repay Medicare the difference between their target
price and their actual episode payment, should actual episode payments
exceed the target price, would not be impacted by performance on
quality measures.
Finally, we propose to increase the measure result thresholds for
the final 2 performance years of the model, to ensure that CCJR
participant hospitals continue to maintain a high level of quality
performance or improve performance on these measures as they gain
experience with implementation of this payment model. More
specifically, we propose that in order for a participant hospital to
receive a reconciliation payment for actual episode spending that is
less than the target price for performance years 4 and 5, the
participant hospital's measure result must be at or above the 40th
percentile of the national hospital measure results calculated for all
HIQR- program participant hospitals for each of the three required
measures for each performance period. As previously noted, we propose
to use the most recently available HCAHPS 4-quarter roll-up to
calculate the HLMR. We believe that holding the participant hospitals
to a set measure result threshold for the first 3 years, and increasing
this threshold for performance years 4 and 5, emphasize the need to
maintain and improve quality of care while cost efficiencies are
pursued. We seek comment on our proposed approach to incorporating
quality performance into eligibility for reconciliation payments under
the CCJR model for participant hospitals.
Table 13 displays the proposed thresholds that participant
hospitals must meet on the various measures over the 5 model
performance years.
Table 13--PROPOSED THRESHOLDS for Required Quality Measures To Determine Participant Hospital Reconciliation Payment Eligilbity Over 5 Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Measure PY1 threshold PY2 threshold PY3 threshold PY4 threshold PY5 threshold
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital[dash]level 30[dash]day, 30th percentile....... 30th percentile....... 30th percentile...... 40th percentile...... 40th percentile.
all[dash]cause RSRR following
elective primary THA and/or TKA
(NQF #1551).
Hospital[dash]level RSCR following 30th percentile....... 30th percentile....... 30th percentile...... 40th percentile...... 40th percentile.
elective primary THA and/or TKA
(NQF #1550).
HCAHPS survey (NQF #0166).......... 30th percentile....... 30th percentile....... 30th percentile...... 40th percentile...... 40th percentile.
--------------------------------------------------------------------------------------------------------------------------------------------------------
We seek comment on our proposed methodology to utilize quality
measure performance in the payment methodology for CCJR, as well as the
proposed thresholds for participant hospital reconciliation payment
eligibility over the performance years of the model.
As discussed in section III.C.5.c.(3) of this proposed rule, we
also believe that hospitals that choose to submit THA/TKA voluntary
data should have the potential to benefit financially through an
adjustment to the payment methodology of the model. We propose a
voluntary reporting payment adjustment for hospitals that successfully
submit the THA/TKA voluntary data by reducing the discount percentage
incorporated into the target price from 2.0 percent to 1.7 percent.
This voluntary reporting payment adjustment would start in performance
year 1 and would be available through performance year 5 of the model
for each year that the hospital successfully reports THA/TKA voluntary
data. As proposed, reporting THA/TKA voluntary data would not affect
eligibility for a reconciliation payment if actual episode payments are
less than the target price. Participant hospitals would still need to
meet the 30th or 40th percentile threshold, as applicable to the given
performance year, on all three required quality measures (Table 13).
We considered, but are not proposing, two other alternatives to
adjust the payment methodology for participant hospitals that
successfully report the THA/TKA voluntary data as described in section
III.C.5.c.(3) of this proposed rule. These alternatives would change
the threshold percentile for the three required quality measures or,
alternatively, reduce the number of required measures in which the
threshold must be met provided that successful THA/TKA voluntary data
were reported for a performance year. First, we considered reducing the
threshold for reconciliation payment eligibility that participant
hospitals must meet on the three required quality measures from the
30th percentile threshold to the 20th percentile threshold for
performance years 1, 2, and 3, and from the 40th percentile to the 30th
percentile for performance year. Second, we considered only requiring
hospitals to meet the 30th percentile threshold on two of three outcome
measures for performance years 1, 2, and 3, and the 40th percentile
threshold on two of three outcome measures in performance years 4 and
5. Under both of these alternatives, the eligibility for reconciliation
payments could change based on the THA/TKA voluntary data. We seek
comment on these alternative payment methodology
[[Page 41247]]
adjustments that could impact reconciliation payment eligibility,
unlike the proposed voluntary reporting payment adjustment. We note
that the other alternative approaches to encouraging THA/TKA voluntary
data reporting for CCJR beneficiaries as discussed in section
III.C.5.c.(3) of this proposed rule that would not require adjustments
to the CCJR payment methodology would also not affect reconciliation
payment eligibility.
6. Proposed Process for Reconciliation
This section outlines our proposals on how we intend to reconcile
aggregate related Medicare payments for a hospital's beneficiaries in
CCJR episodes during a performance year against the applicable target
price in order to determine if reconciliation payment (or Medicare
repayment, beginning in performance year 2) is applicable under this
model. We refer readers to section III.B of this proposed rule for our
proposed definition of related services for lower extremity joint
replacement episodes under CCJR, to section III.C.2.a. of this proposed
rule for our proposed definition of performance years, and to section
III.C.4 of this proposed rule for our proposed approach to establish
target prices.
a. Net Payment Reconciliation Amount
After the completion of a performance year, we propose to
retrospectively calculate a participant hospital's actual episode
performance based on the episode definition. We note that episode
payments for purposes of the CCJR model would exclude the effects of
special payment provisions under existing Medicare payment systems
(section III.C.3.a. of this proposed rule), be subject to proration for
services that extend beyond the episode (section III.C.3.b. of this
proposed rule), and exclude PBPM payments for programs and models
specified in section III.C.7.d. of this proposed rule. Some episodes
may be excluded entirely from the CCJR model due to overlap with BPCI
episodes, as discussed in section III.C.7.b. of this proposed rule.
Finally, actual episode payments calculated for purposes of CCJR would
be capped at anchor MS-DRG and region-specific high episode payment
ceilings (section III.C.3.c. of this proposed rule). We would apply the
high episode payment ceiling policy to episodes in the performance year
similarly to how we propose to apply it to historical episodes (section
III.C.4.c. of this proposed rule). Episode payments for episodes
attributed to CCJR eligible hospitals would be divided by the wage
normalization factor, using the IPPS wage index applicable to the
anchor admission, and for each MS-DRG anchor and region, the high
episode payment ceiling would be calculated as two standard deviations
above the mean. Any actual episode payment amount above the high
payment ceiling would be capped at said ceiling. After applying the
cap, wage variations would be reapplied to episodes by multiplying them
by the same wage normalization factor, using the IPPS wage index
applicable to the anchor admission.
Each participant hospital's actual episode payment performance
would be compared to its target prices. We note that, as discussed in
section III.C.4. of this proposed rule, a participant hospital would
have multiple target prices for episodes ending in a given performance
year, based on the MS-DRG anchor (MS-DRG 469 versus MS-DRG 470), the
performance year when the episode was initiated, when the episode was
initiated within a given performance year (January 1 through September
30 of the performance year, October 1 through December 31 of the
performance year, October 1 through December 31 of the prior
performance year), and whether the participant hospital successfully
submitted THA/TKA voluntary data. The applicable target price for each
episode would be determined using the aforementioned criteria, and the
difference between each CCJR episode's actual payment and the relevant
target price (calculated as target price subtracted by CCJR actual
episode payment) would be aggregated for all episodes for a participant
hospital within the performance year, representing the raw Net Payment
Reconciliation Amount (NPRA). This amount would be adjusted per the
steps discussed later in this section, creating the NPRA.
The NPRA would include adjustments to account for post-episode
payment increases (section III.C.8.e. of this proposed rule). The NPRA
would also include adjustments for stop-loss and stop-gain limits
(section III.C.8.b. of this proposed rule), after adjustments are made
for the aforementioned post-episode payment increases. Any NPRA amount
greater than the proposed stop-gain limit would be capped at the stop-
gain limit, and any NPRA amount less than the proposed stop-loss limit
would be capped at the stop-loss limit.
We do not propose to include any CCJR reconciliation payments or
repayments to Medicare under this model for a given performance year in
the NPRA for a subsequent performance year. We want to incentivize
providers to provide high quality and efficient care in all years of
the model. If reconciliation payments for a performance year are
counted as Medicare expenditures in a subsequent performance year, a
hospital would experience higher Medicare expenditures in the
subsequent performance year as a consequence of providing high quality
and efficient care in the prior performance year, negating some of the
incentive to perform well in the prior year. Therefore, we propose to
not have the NPRA for a given performance year be impacted by CCJR
Medicare repayments or reconciliation payments made in a prior
performance year. However, as discussed in section III.C.6.b, during
the following performance year's reconciliation process, we propose to
account for additional claims run-out and overlap from the prior
performance year, and net that amount with the subsequent performance
year's NPRA to determine the reconciliation or repayment amount for the
current reconciliation.
b. Payment Reconciliation
We propose to reconcile payments retrospectively through the
following reconciliation process. We would reconcile a participant
hospital's CCJR actual episode payments against the target price 2
months after the end of the performance year. More specifically, we
would capture claims submitted by March 1st following the end of the
performance year and carry out the NPRA calculation as described
previously to make a reconciliation payment or hold hospitals
responsible for repayment, as applicable, in quarter 2 of that calendar
year.
To address issues of overlap with other CMS programs and models
that are discussed in section III.C.7. of this proposed rule, we also
propose that during the following performance year's reconciliation
process, we would calculate the prior performance year's episode
spending a second time to account for final claims run-out, as well as
overlap with other models as discussed in section III.C.7 of this
proposed rule. This would occur approximately 14 months after the end
of the prior performance year. As discussed later in this section, the
amount from this calculation, if different from zero, would be applied
to the NPRA for the subsequent performance year in order to determine
the amount of the payment Medicare would make to the hospital or the
hospital's repayment amount. We note that the subsequent reconciliation
calculation would be applied to the previous calculation of NPRA for a
performance year to ensure the stop loss and stop gain limits discussed
in section
[[Page 41248]]
III.C.8. of this proposed rule are not exceeded for a given performance
year.
For the performance year 1 reconciliation process, we would
calculate a participant's NPRA, as described above, and if positive,
the hospital would receive the amount as a reconciliation payment from
Medicare. If negative, the hospital would not be responsible for
repayment to Medicare, consistent with our proposal to phase in
financial responsibility beginning in performance year 2. Starting with
the CCJR reconciliation process for performance year 2, in order to
determine the reconciliation or repayment amount, the amount from the
subsequent reconciliation calculation would be applied to the NPRA. If
the amount is positive, and if the hospital meets the quality
thresholds for that performance year (discussed further in section
III.C.5. of this proposed rule), the hospital would receive the amount
as a reconciliation payment from Medicare. If the amount is negative,
Medicare would hold the participant hospital responsible for repaying
the absolute value of the repayment amount following the rules and
processes for all other Medicare debts. Note that given our proposal to
not hold participant hospitals financially responsible for repayment
for the first performance year, during the reconciliation process for
performance year 2 only, the subsequent calculation amount (for
performance year 1) would be compared against the performance year 1
NPRA to ensure that the sum of the NPRA calculated for performance year
1 and the subsequent reconciliation calculation for year 1 is not less
than zero. For performance years 2 through 5, though, Medicare would
hold the participant hospital responsible for repaying the absolute
value of the repayment amount following the rules and processes for all
other Medicare debts.
This reconciliation process would account for overlaps between the
CCJR model and other CMS models and programs as discussed in section
III.C.7 of this proposed rule, and would also involve updating
performance year episode claims data. For example, for performance year
1 for the CCJR model in 2016, we would capture claims submitted by
March 1st, 2017, and reconcile payments for participant hospitals
approximately 6 months after the end of the performance year in quarter
2 of calendar year 2017. We would carry out the subsequent calculation
in the following year in quarter 2 of calendar 2018, simultaneously
with the reconciliation process for the second performance year, 2017.
Table 14 provides the proposed reconciliation timeframes for the model.
Lastly, we propose that the reconciliation payments to or repayments
from the participant hospital would be made by the Medicare
Administrative Contractor (MAC) that makes payment to the hospital
under the IPPS. This approach is consistent with BPCI Model 2
operations.
We believe our proposed approach balances our goals of providing
reconciliation payments in a reasonable timeframe, while being able to
account for overlap and all Medicare claims attributable to episodes.
We believe that pulling claims 2 months after the end of the
performance year provides sufficient claims run-out to conduct the
reconciliation in a timely manner, given that our performance year
includes episodes ending, not beginning, by December 31st. We note that
in accordance with the regulations at Sec. 424.44 and the Medicare
Claims Processing Manual (Pub. L. 100-04), Chapter 1, Section 70,
Medicare claims can be submitted no later than 1 calendar year from the
date of service. We recognize that by pulling claims 2 months after the
end of the performance year to conduct reconciliation, we would not
have complete claims run-out. However, we believe that the 2 months of
claims run out would be an accurate reflection of episode spending and
consistent with the claims run-out timeframes used for reconciliation
in other payment models, such as BPCI Models 2 and 3. The alternative
would be to wait to reconcile until we have full claims run out 12
months after the end of the performance year, but we are concerned that
this approach would significantly delay earned reconciliation payments
under this model. Because we propose to conduct a second calculation to
account for overlap with other CMS models and programs, we can
incorporate updated claims data with 14 months run out at that time.
However, we do not expect that the updated data should substantially,
in and of itself, affect the reconciliation results assuming hospitals
and other providers furnishing services to Medicare beneficiaries in
CCJR episodes follow usual patterns of claims submission and do not
alter their billing practices due to this model.
Table 14--Proposed Timeframe for Reconciliation in CCJR
----------------------------------------------------------------------------------------------------------------
Second Second
Model Reconciliation Reconciliation calculation to calculation
Model performance performance claims submitted payment or address overlaps adjustment to
year period by repayment and claims run- reconciliation
out amount
----------------------------------------------------------------------------------------------------------------
Year 1*.......... Episodes ending March 1, 2017... Q2 2017............ March 1, 2018... Q2 2018
March 31, 2016
to December 31,
2016.
Year 2........... Episodes ending March 1, 2018... Q2 2018............ March 1, 2019... Q2 2019
January 1, 2017
through
December 31,
2017.
Year 3........... Episodes ending March 1, 2019... Q2 2019............ March 2, 2020... Q2 2020
January 1, 2018
through
December 31,
2018.
Year 4........... Episodes ending March 2, 2020... Q2 2020............ March 1, 2021... Q2 2021
January 1, 2019
through
December 31,
2019.
Year 5........... Episodes ending March 1, 2021... Q2 2021............ March 1, 2022... Q2 2022
January 1, 2020
through
December 31,
2020.
----------------------------------------------------------------------------------------------------------------
* Note that the reconciliation for Year 1 would not include repayment responsibility from CCJR hospitals.
[[Page 41249]]
7. Proposed Adjustments for Overlaps With Other Innovation Center
Models and CMS Programs
a. Overview
We acknowledge that there may be circumstances where a Medicare
beneficiary in a CCJR episode may also be assigned to an ACO
participating in the MSSP or otherwise accounted for in a payment model
being tested by the Innovation Center. Current or forthcoming programs
and models with potential overlap with CCJR are displayed in Table 15.
For purposes of this proposed rule, ``total cost of care'' models refer
to models in which episodes or performance periods include participant
financial responsibility for all Part A and Part B spending, as well as
some Part D spending in select cases. We use the term ``shared
savings'' in this proposed rule to refer to models in which the payment
structure includes a calculation of total savings and CMS and the model
participants each retain a particular percentage of that savings. We
note that there exists the possibility for overlap between CCJR
episodes and shared savings models such as the Pioneer ACO Model, other
total cost of care models such as the Oncology Care Model (OCM), other
Innovation Center payment models such as BPCI, and other models or
programs that incorporate per-beneficiary-per-month fees or other
payment structures.
Table 15--Current Programs and Models With Potential Overlap With Proposed CCJR Model
----------------------------------------------------------------------------------------------------------------
Per[dash]beneficiary-per-
Program/model Brief description Shared savings? month (PBPM) payments?
----------------------------------------------------------------------------------------------------------------
Pioneer............................. ACO shared savings Yes................ No.
program.
Medicare Shared Savings Program ACO shared savings Yes................ No.
(MSSP). program.
Next Generation ACO................. ACO shared savings Yes................ No.
program.
Comprehensive Primary Care Pays primary care Yes................ Yes.
initiative (CPCi). providers for improved
and comprehensive care
management.
Multi[dash]payer Advanced Primary Multi[dash]payer model Yes................ Yes.
Care Practice (MAPCP). for advanced primary
care practices, or
``medical homes''.
Bundled Payments for Care Bundled payment program No................. No.
Improvement (BPCI). for acute or
post[dash]acute
services or both.
Oncology Care Model (OCM)........... Multi[dash]payer model No................. Yes.
for oncology physician
group practices.
Comprehensive ESRD Care Initiative ACO for ESRD Medicare Yes................ No.
(CEC). beneficiaries.
Million Hearts...................... Model targeting No................. Yes.
prevention of heart
attack and stroke.
Medicare Care Choices Model......... Hospice concurrent care No................. Yes.
model.
----------------------------------------------------------------------------------------------------------------
Four different issues may arise in such overlap situations that
must be addressed under CCJR. First, beneficiaries in CCJR episodes
could also be part of BPCI Model 2 or 3 LEJR episodes, and the clinical
services provided as part of each episode may overlap entirely or in
part. Second, CCJR reconciliation payments and Medicare repayments that
are made under Part A and B and attributable to a specific
beneficiary's episode may be at risk of not being accounted for by
other models and programs when determining the cost of care under
Medicare for that beneficiary. Third, some Innovation Center models
make PBPM payments to entities for care coordination and other
activities, either from the Part A or B Trust or both, or from the
Innovation Center's own appropriation (see section 1115A(f) of the
Act). These payments may occur during a CCJR episode. Finally, there
could be instances when the expected Medicare savings for a CCJR
beneficiary's episode is not achieved by Medicare because part of that
savings is paid back to the hospital or another entity under a shared
savings program or other model in which the beneficiary is also
included. We seek comment on our proposals to account for overlap with
other models, including those listed in Table 15 as well as other CMS
models or programs.
b. CCJR Beneficiary Overlap With BPCI Episodes
BPCI is an episode payment model testing LEJR episodes, as well as
47 other episodes, in acute or PAC or both (Models 1, 2, 3 or 4). As
discussed in section III.A. of this proposed rule, we propose to
exclude from selection for participation in the CCJR payment model
those geographic areas where 50 percent or more of LEJR episodes are
initiated at acute care hospitals testing the LEJR episode in BPCI in
Models 1, 2 or 4 as of July 1, 2015. In that same section, we propose
that acute care hospitals in selected geographic areas participating in
BPCI under Model 1 (acute care only) and those participating as episode
initiators for the LEJR episode in Model 2 (acute and PAC from 30 to 90
days post-discharge) or Model 4 (prospective episode payment for the
LEJR anchor hospital stay and related readmissions for 30 days post-
discharge) be excluded from CCJR.
While we believe these proposals will mitigate the overlap of CCJR
beneficiaries with BPCI episodes, there may still be instances of model
overlap that we need to account for under CCJR. These include
circumstances when a beneficiary is admitted to a participating CCJR
hospital for an LEJR procedure where the beneficiary would also be in a
BPCI Model 2 episode under a physician group practice that would
initiate the episode under BPCI. In another example, a beneficiary
discharged from an anchor hospitalization under CCJR could enter a BPCI
Model 2 LEJR episode at another hospital for a phased second joint
replacement procedure or enter a BPCI Model 3 LEJR episode upon
initiation of PAC services at a BPCI post-acute provider episode
initiator for the LEJR episode. Similarly, a beneficiary in a BPCI
Model 2 or Model 3 LEJR episode could be admitted to a CCJR participant
hospital for a phased second joint replacement. In all such scenarios
in which there is overlap of CCJR beneficiaries with any BPCI LEJR
episodes, we propose that the BPCI LEJR episode under Models 1, 2, 3,
or 4 take precedence and we would cancel (or never initiate) the CCJR
episode. Because the cancellation (or lack of initiation) would only
occur for overlap with BPCI LEJR episodes, we expect that the
participant hospital and treating physician would generally be aware of
the beneficiary's care pathway that
[[Page 41250]]
would cancel or not initiate the CCJR episode. Therefore, we would
exclude the CCJR episode from the CCJR participant hospital's
reconciliation calculations where we compare actual episode payments to
the target price under the CCJR model. If we were to allow both CCJR
and BPCI LEJR episodes to overlap, we would have no meaningful way to
apply the payment policies in two models with overlapping care redesign
interventions and episodes. Participants in BPCI have an expectation
that eligible episodes will be part of the BPCI model test, whereas
based on our proposal CCJR participants would be aware that episodes
may be canceled when there is overlap with BPCI episodes as previously
discussed in this section. We aim to preserve the integrity of ongoing
model tests without introducing major modifications (that is, CCJR
episode precedence) that could make evaluation of existing models more
challenging.
We considered that there may also be instances of overlap between
CCJR and BPCI Model 3 LEJR episodes where our proposal to give
precedence to all BPCI episodes could lead to undesirable patient
steering because the BPCI Model 3 episode does not begin until care is
initiated at an episode-initiating PAC provider. It could be possible
for a participating CCJR hospital to purposefully guide a beneficiary
to a BPCI Model 3 LEJR episode initiating PAC provider to exclude that
beneficiary's episode from CCJR. We considered giving precedence to the
CCJR episode in overlap with Model 3 beneficiaries because the CCJR
episode begins with admission for the anchor hospitalization and thus
includes more of the episode services. However, we believe the steering
opportunities would be limited due to the preservation of beneficiary
choice of provider in this model (as discussed in section III.E. of
this proposed rule). As outlined in section III.E. of this proposed
rule, CCJR hospitals must provide patients with a complete list of all
available PAC options. Moreover, BPCI Model 3 post-acute providers are
actively involved in the decision to admit patients to their
facilities. As episode initiators in BPCI, such providers are subject
to monitoring and evaluation under that model and would be vigilant
about not engaging in steering themselves or spurred by other
providers. Nevertheless, we will monitor CCJR hospitals to ensure
steering or other efforts to limit beneficiary access or move
beneficiaries out of the model are not occurring (see section III.F. of
this proposed rule).
We seek comment on the proposed approach to address overlap between
CCJR and BPCI episodes.
c. Accounting for CCJR Reconciliation Payments and Repayments in Other
Models and Programs
Under CCJR, we would annually, as applicable, make reconciliation
payments to or receive repayments from participating CCJR hospitals
based on their quality performance and Medicare expenditures, as
described in section III.C.6. of this proposed rule. While we propose
that these reconciliation payments or repayments would be handled by
MACs, the calculation of these amounts would be done separately before
being sent through the usual Medicare claims processing systems.
Nevertheless, it is important that other models and programs in which
providers are accountable for the total cost of care be able to account
for the full Medicare payment, including CCJR-related reconciliation
payments and repayments as described in section III.C.6. of this
proposed rule, for beneficiaries who are also in CCJR episodes.
Accordingly, it is necessary to have beneficiary-specific information
on CCJR-related reconciliation payments and repayments available when
those models and programs make their financial calculations. Thus, in
addition to determining reconciliation payments and repayments for the
participant hospitals in the CCJR model, we propose to also calculate
beneficiary-specific reconciliation payment or repayment amounts for
CCJR episodes to allow for those other programs and models, as their
reconciliation calculation timeframes permit, to determine the total
cost of care for overlapping beneficiaries. We would perform the
reconciliation calculations for CCJR hospitals and make information
about the CCJR reconciliation or repayment amounts available to other
programs and models, such as MSSP and Pioneer ACO, that begin
reconciliation calculations after CCJR. For example, this strategy is
currently in place to account for overlaps between beneficiaries
aligned to Pioneer and MSSP ACOs and BPCI model beneficiaries.
Beneficiary-specific reconciliation payment or repayment amounts are
loaded into a shared repository for use during each program or model's
respective reconciliations. However, we note that we would not make
separate payments to, or collect repayments from, participating CCJR
hospitals for each individual episode, but, instead, propose to make a
single aggregate reconciliation payment or repayment determination for
all episodes for a single performance year, as discussed in section
III.C.6. of this proposed rule.
As described in section III.C.6 of this proposed rule on the
Proposed Process for Reconciliation, we propose to conduct
reconciliation based on claims data available 2 months after the end of
the performance year and a second calculation based on claims data
available 14 months after the end of a performance year to account for
claims run-out and potential overlap with other models. The rationale
for this reconciliation process is to be able make payments to, and
recoup payments from, CCJR participant hospitals in a timely manner and
to be able to account for overlaps in other models and programs. In
addition, the timing of the reconciliation was determined giving
consideration to when the other total cost of care models conduct their
reconciliations so that when they perform their financial calculations,
they will have the information necessary to account for beneficiary-
specific payments/repayments made under the CCJR model. We intend to
report beneficiary-specific payments and repayment amounts made for the
CCJR model in the CMS Master Database Management System that generally
holds payments/repayment amounts made for CMS models and programs.
Other total cost of care models and programs can use the information on
CCJR payment/repayment amounts reported in the Master Database
Management System in their financial calculations such as in their
baseline or benchmark calculations or reconciliations, to the extent
that is consistent with their policies.
We seek comment on our proposed approach to ensuring that the full
CCJR episode payment for a beneficiary is accounted for when performing
financial calculations for other total cost of care and episode-based
payment models and programs.
d. Accounting for PBPM Payments in the Episode Definition
There are currently five CMS models that pay PBPM payments to
providers for new or enhanced services as displayed in Table 15. These
PBPM payments vary as to their funding source (Medicare Trust Funds or
Innovation Center appropriation), as well as to their payment
methodology.
In general, these PBPM payments are for new or enhanced provider or
supplier services that share the goal of improving quality of care
overall and reducing Medicare expenditures for services that could be
avoided through improved care coordination. Some of
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these PBPM payments may be made for services furnished to a beneficiary
that is in another Innovation Center model at the that same time that
the beneficiary is in a CCJR LEJR episode, but the clinical
relationship of services paid by the PBPM payments to the CCJR episode
will vary. For purposes of CCJR, we consider clinically related those
services paid by PBPMs that are for the purpose of care coordination
and care management of any beneficiary diagnosis or hospital
readmission not excluded from the CCJR episode definition, as discussed
in section III.B.2 of this proposed rule.
We would determine whether the services paid by PBPM payments are
excluded from the CCJR episode on a model by model basis based on their
funding source and clinical relationship to CCJR episodes. If we
determine a model's PBPM payments are for new or enhanced services that
are clinically related to the CCJR episode and the PBPM payment is
funded through the Medicare Part A or B Trust Fund, we would include
the services paid by the PBPM payment to the extent they otherwise meet
the proposed episode definition for the CCJR model. That is, we would
include the clinically related services paid by a PBPM payment if the
services would not otherwise be excluded based on the principal
diagnosis code on the claim, as discussed in section III.B.2 of this
proposed rule. The PBPM payments for clinically related services would
not be excluded from the historical CCJR episodes used to calculate
target prices when the PBPM payments are present on Part A or Part B
claims, and they would not be excluded from calculation of episode
actual expenditures during the performance period. PBPM model payments
that we determine are clinically unrelated would be excluded,
regardless of the funding mechanism or diagnosis codes on claims for
those payments. We note that in the case of PBPM model payments,
principal diagnosis codes on a Part B claim (which are used to identify
exclusions from CCJR episodes, as discussed in section III.B.), would
not denote the only mechanism for exclusion of a service from the CCJR
episode. All such PBPM model payments we determine are clinically
unrelated would be excluded as discussed in this proposal. Finally, all
services paid by PBPM payments funded through the Innovation Center's
appropriation under section 1115A of the Act would be excluded from
CCJR episodes, without a specific determination of their clinical
relationship to CCJR episodes. We believe including such PBPM payments
funded under the Innovation Center's appropriation and not included on
claims would be operationally burdensome and could significantly delay
any reconciliation payments and repayments for the CCJR model. In
addition, because these services are not paid for from the Medicare
Part A or B Trust Fund, we are not confident that they would be covered
by Medicare under existing law. Therefore, we believe the services paid
by these PBPM payments are most appropriately excluded from CCJR
episodes. Our proposal for the treatment of services paid through model
PBPM payments in CCJR episodes would pertain to all existing models
with PBPM payments, as well as future models and programs that
incorporate PBPM payments. We believe that this proposal is fully
consistent with our goal of including all related Part A and Part B
services in the CCJR episodes, as discussed in section III.B.2. of this
proposed rule.
Under this proposal, only one of the four existing models displayed
in Table 15 include services paid by PBPM payments that would not be
excluded from CCJR episodes. The MAPCP model makes PBPM payments that
are funded through the Trust Fund for new or enhanced services that
coordinate care, improve access, and educate patients with chronic
illnesses. We expect these new or enhanced services to improve quality
and reduce spending for services that may have otherwise occurred, such
as hospital readmissions, and consider them to be clinically related to
CCJR episodes because the PBPM payments would support care coordination
for medical diagnoses that are not excluded from CCJR episodes. Thus,
we propose that services paid by PBPM payments under the MAPCP model
not be excluded from CCJR episodes to the extent they otherwise meet
the proposed episode definition. While the OCM model will pay for new
or enhanced services through PBPM payments funded by the Medicare Part
B Trust Fund, we do not believe these services are clinically related
to CCJR episodes. The OCM model incorporates episode-based payment
initiated by chemotherapy treatment, a service generally reported with
ICD-9-CM codes that are specifically excluded from the proposed CCJR
episode definition in section III.B.2. of this proposed rule. We
believe the care coordination and management services paid by OCM PBPM
payments would be focused on chemotherapy services and their
complications, so the services would be clinically unrelated to CCJR
episodes. Therefore, we propose that services paid by PBPM payments
under the OCM model be excluded from CCJR episodes. Similarly, we
propose to exclude services paid by PBPM payments under the Medicare
Care Choices model, because the model's focus on palliative care for
beneficiaries with a terminal illness means the PBPM payments would pay
for services that are clinically unrelated to CCJR episodes. The
services paid by PBPM payments under this model would commonly pertain
to diagnoses that are excluded from the proposed CCJR episode
definition. Finally, new or enhanced services paid by PBPM payments
under the Comprehensive Primary Care initiative (CPCi) are paid out of
the Innovation Center's appropriation and thus would be excluded from
CCJR episodes according to this proposal.
We acknowledge there may be new models not included Table 15 that
could incorporate a PBPM payment for new or enhanced services. We would
plan to make our determination about whether services paid by a new
model PBPM payment that is funded under the Medicare Trust Funds are
clinically related to CCJR episodes through the same subregulatory
approach that we are proposing to use to update the episode definition
(excluded MS-DRGs and ICD-9-CM diagnosis codes). We would assess each
model's PBPM payment to determine if it would be primarily used for
care coordination or care management services for excluded clinical
conditions under the LEJR episode definition for CCJR based on the
standards we propose to use to update the episode definition that are
discussed in section III.B.2 of this proposed rule.
If we determine that the PBPM payment would primarily be used to
pay for services to manage an excluded clinical condition, we would
exclude the PBPM payment from the CCJR episode on the basis that it
pays for unrelated services. If we determine that the PBPM payment
could primarily be used for services to manage an included clinical
condition, we would include the PBPM payment in the CCJR episode if the
diagnosis code on the claim for the PBPM payment was not excluded from
the episode, following our usual process for determining excluded
claims for Part B services in accordance with the episode definition
discussed in section III.C.2 of this proposed rule. We would post our
proposed determination about whether the PBPM payment would be included
in the episode to the CMS Web site to allow for public input on our
planned application of these standards, and then adopt changes to
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the overlap list with posting to the CMS Web site of the final updated
list after our consideration of the public input.
We seek comment on our proposals to account for Innovation Center
model PBPM payments under CCJR.
e. Accounting for Overlap With Shared Savings Programs and Total Cost
of Care Models
In addition to the Medicare Shared Savings Program (MSSP) under
section 1899 of the Act, there are several ACO and other Innovation
Center models that make or will make, once implemented, providers
accountable for total cost of care over 6 to 12 months, including the
Pioneer ACO Model, Next Generation ACO, Comprehensive ESRD Care (CEC)
Model, CPCi, OCM, and the Multi-payer Advanced Primary Care Practice
(MAPCP) Demonstration. Some of these are shared savings models (or
programs, in the case of MSSP), while others are not shared savings but
hold participating providers accountable for the total cost of care
during a defined episode of care, such as OCM. Note that as discussed
in section III.C.7.a. of this proposed rule, for purposes of this
proposed rule, ``total cost of care'' models refer to models in which
episodes or performance periods include participant financial
responsibility for all Part A and Part B spending, as well as some Part
D spending in select cases. Each of these payment models holds
providers accountable for the total cost of care over the course of an
extended period of time or episode of care by applying various payment
methodologies. We believe it is important to simultaneously allow
beneficiaries to participate in broader population-based and other
total cost of care models, as well as episode payment models that
target a specific episode of care with a shorter duration, such as
CCJR. Allowing beneficiaries to receive care under both types of models
may maximize the potential benefits to the Medicare Trust Funds and
participating providers and suppliers, as well as beneficiaries.
Beneficiaries stand to benefit from care redesign that leads to
improved quality for LEJR episodes of care even while also receiving
care under these broader models, while entities that participate in
other models and programs that assess total cost of care stand to
benefit, at least in part, from the cost savings that accrue under
CCJR. For example, a beneficiary receiving an LEJR procedure may
benefit from a hospital's care coordination efforts with regard to care
during the inpatient hospital stay. The same beneficiary may be
attributed to a primary care physician affiliated with an ACO who is
actively engaged in coordinating care for all of the beneficiary's
clinical conditions throughout the entire performance year, beyond the
90-day post-discharge LEJR episode.
We propose that a beneficiary could be in a CCJR episode, as
defined in section III.B. of this proposed rule, by receiving an LEJR
procedure at a CCJR hospital, and also attributed to a provider
participating in a model or program in Table 15. For example, a
beneficiary may be attributed to a provider participating in the
Pioneer ACO model for an entire performance year, as well as have a
CCJR episode during the ACO's performance year. Each model incorporates
a reconciliation process, where total included spending during the
performance period or episode are calculated, as well as any potential
savings achieved by the model or program. Given that we are proposing
to allow for such beneficiary overlap, we believe it is important to
account for savings under CCJR and the other models and programs with
potential overlap in order that CMS can apply the respective individual
savings-related payment policies of the model or program, without
attributing the same savings to more than one model or program.
We believe that when overlap occurs, it is most appropriate to
attribute Medicare savings accrued during the CCJR time period
(hospital stay plus 90 days post-discharge) to CCJR to the extent
possible. The CCJR episode has a shorter duration and is initiated by a
major surgical procedure, requiring an inpatient hospitalization. In
contrast, the total cost of care models listed in Table 15 incorporate
6 to 12 month performance periods for participants and, in general,
have a broader focus on beneficiary health. Our intention is to ensure
that CCJR episodes are attributed the full expected savings to Medicare
to the extent possible. As such, we propose the following policies to
ensure that other models are able to account for the reconciliation
payments paid to CCJR hospitals to the extent possible prior to
performing their own reconciliation calculations and that, in all
appropriate circumstances, the CCJR model or the other model would make
an adjustment for savings achieved under the CCJR model and partially
paid back through shared savings/performance payments under other
initiatives to ensure that the full CCJR model savings to Medicare is
realized.
We propose that the total cost of care calculations under non-ACO
total cost of care models would be adjusted to the extent feasible to
account for beneficiaries that are aligned to participants in the model
and whose care is included in CCJR in order to ensure that the savings
to Medicare achieved under CCJR (the discount percentage) are not paid
back under these other models through shared savings or other
performance-based payment. Thus, the non-ACO total cost of care models
would adjust their calculations to ensure the CCJR discount percentage
is not paid out as savings or other performance-based payment to the
other model participants. As previously discussed, we believe that the
efficiencies achieved during the CCJR episode should be credited to the
entity that is closest to that care for the episode of care in terms of
time, location, and care management responsibility, rather than the
broader entity participating in a total cost of care model that spans a
longer duration. We propose that the non-ACO total cost of care models
to which this policy would apply would include CPCi, OCM, and MAPCP. We
seek comment on our proposal to account for overlap with those non-ACO
total cost of care models and any other current or forthcoming models.
We propose a different policy for accounting for overlap with MSSP
and other ACO models. We note that given the operational complexities
and requirements of the MSSP reconciliation process, it is not feasible
for MSSP to make an adjustment to account for the discount to Medicare
under a CCJR episode under existing program rules and processes.
Additionally, for programmatic consistency among ACO models and
programs, given that our ACO models generally are tested for the
purpose of informing future potential changes to MSSP, we believe that
the ACO model overlap adjustment policy should be aligned with the MSSP
policy. Thus, we propose that under CCJR, we would make an adjustment
to the reconciliation amount if available to account for any of the
applicable discount for an episode resulting in Medicare savings that
is paid back through shared savings under MSSP or any other ACO model,
but only when a CCJR participant hospital also participates in the ACO
and the beneficiary in the CCJR episode is also aligned to that ACO.
This adjustment would be necessary to ensure that the applicable
discount under CCJR is not reduced because a portion of that discount
is paid out in shared savings to the ACO and thus, indirectly, back to
the hospital.
However, we propose not to make an adjustment under CCJR when a
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beneficiary receives an LEJR procedure at a participant hospital and is
aligned to an ACO in which the hospital is not participating. While
this proposal would leave overlap unaccounted for in such situations,
we do not believe it would be appropriate to hold responsible for
repayment the hospital that managed the beneficiary during the episode
through a CCJR adjustment, given that the participant hospital may have
engaged in care redesign and reduced spending during the CCJR episode.
The participant hospital may be unaware that the beneficiary is also
aligned to an ACO. However, we recognize that as proposed this policy
would allow an unrelated ACO full credit for the Medicare savings
achieved during the episode. The evaluation of the CCJR model, as
discussed in section IV of this proposed rule, would examine overlap in
such situations and the potential effect on Medicare savings.
We note that our proposed policy as outlined in this proposed rule
would entail CCJR reclaiming from the participant hospital any discount
percentage paid out as shared savings for MSSP or ACO models only when
the hospital is an ACO participant and the beneficiary is aligned with
that ACO, while other total cost of care models such as CPCi would
adjust for the discount percentage in their calculations. While it is
operationally feasible for smaller total cost of care models in
testing, such as CPCi, to make an adjustment to account for any CCJR
discount percentage paid out as sharing savings or other performance-
based payments, the operational complexities and requirements of the
large permanent Medicare ACO program, MSSP, make it infeasible for that
program to make an adjustment in such cases, and we believe that other
ACO models in testing that share operating principles with the MSSP
should follow the same policies as the CCJR MSSP adjustment for certain
overlapping ACO beneficiaries. As the landscape of CMS models and
programs changes, we may revisit this policy through future rulemaking.
We seek comment on our proposals for adjustments to account for
overlap between CCJR and shared savings programs and total cost of care
models.
8. Proposals To Limit or Adjust Hospital Financial Responsibility
a. Overview
As discussed in section III.A of this proposed rule, we propose
designating as the financially responsible providers in CCJR all acute
care hospitals paid under the IPPS that are located in the selected
geographic areas for this test of 90-day post-discharge LEJR episodes,
with the exception of some hospitals that we propose to exclude because
of participation in BPCI (Models 1, 2, or 4) for LEJR episodes. We are
interested in ensuring a broad test of episode payment for this
clinical condition among different types of hospitals, including those
who may not otherwise choose to participate in an episode payment
model. Many of the participant hospitals would likely be key service
providers in their communities for a variety of medical and surgical
conditions extending well beyond orthopedic procedures. We want to gain
experience with this model before extending it to hospitals in uncommon
circumstances. In addition, we acknowledge that hospitals designated
for participation in CCJR currently vary with respect to their
readiness to function under an episode payment model with regard to
their organizational and systems capacity and structure, as well as
their beneficiary population served. Some hospitals may more quickly be
able to demonstrate high quality performance and savings than others,
even though we propose that the episode target prices be based
predominantly on the hospital's own historical episode utilization in
the early years of CCJR.
We also note that providers may be incentivized to excessively
reduce or shift utilization outside of the CCJR episode, even with the
quality requirements discussed in section III.C.5 of this proposed
rule. In order to mitigate any excessive repayment responsibility for
hospitals or reduction or shifting of care outside the episode,
especially beginning in performance year 2 of the model when we propose
to begin to phase in responsibility for repaying Medicare for excess
episode spending, we propose several specific policies that are also
referenced in section III.C.6.b. of this proposed rule.
b. Proposed Limit on to Raw NPRA Contribution to Repayment Amounts and
Reconciliation Payments
(1) Proposed Limit on Raw NPRA Contribution to Repayment Amounts
When hospital repayment responsibility begins in the second
performance year of CCJR, under this proposed rule, hospitals would be
required to repay Medicare for episode expenditures that are greater
than the applicable target price. As discussed in the section III.C.3.c
of this proposed rule regarding our proposed pricing adjustment for
high payment episodes, hospitals participating in CCJR would not bear
financial responsibility for actual episode payments greater than a
ceiling set at two standard deviations above the mean regional episode
payment. Nevertheless, hospitals would begin to bear repayment
responsibility beginning in performance year 2 for those episodes where
actual episode expenditures are greater than the target price up to the
level of the regional episode ceiling. In aggregate across all
episodes, the money owed to Medicare by a hospital for actual episode
spending above the applicable target price could be substantial if a
hospital's episodes generally had high payments. As an extreme example,
if a hospital had all of its episodes paid at two standard deviations
above the mean regional episode payment, the hospital would need to
repay Medicare a large amount of money, especially if the number of
episodes was large.
To limit a hospital's overall repayment responsibility for the raw
NPRA contribution to the repayment amount under this model, we propose
a 10 percent limit on the raw NPRA contribution to the repayment amount
in performance year 2 and a 20 percent limit on the raw NPRA
contribution to the repayment amount in performance year 3 and
subsequent years. Hereinafter we refer to these proposed repayment
limits as stop-loss limits. In performance year 2 as we phase in
repayment responsibility, the hospital would owe Medicare under the
proposed CCJR payment model no more than 10 percent of the hospital's
target price for the anchor MS-DRG multiplied by the number of the
hospital's CCJR episodes anchored by that MS-DRG during the performance
year, for each anchor MS-DRG in the model. Ten percent provides an even
transition with respect to maximum repayment amounts from performance
year 1, where the hospital bears no repayment responsibility, to the
proposed stop-loss limit in performance years 3 through 5 of 20
percent. In performance years 3 through 5 when repayment responsibility
is fully phased in, no more than 20 percent of the hospital's target
price for the MS-DRG multiplied by the number of the hospital's CCJR
episodes with that MS-DRG in that performance year would be owed by the
hospital to Medicare under the proposed CCJR payment model. The
proposed stop-loss percentage of 20 percent would be symmetrical in
performance years 3 through 5 with the proposed limit on the raw NPRA
contribution to reconciliation payments discussed in the following
section.
We believe that a stop-loss limit of 20 percent is appropriate when
the hospital bears full repayment responsibility,
[[Page 41254]]
based on our assessment of the changes in practice pattern and
reductions in quality of care that could lead to significant repayment
responsibility under the CCJR model, as compared to historical LEJR
episode utilization. We estimate that the IPPS payment for the anchor
hospital stay makes up approximately 50 percent of the episode target
price, and we expect that the anchor hospital stay offers little
opportunity for efficiencies to be achieved by reducing Medicare
expenditures. In contrast, we expect significant episode efficiencies
could be achieved in the 90 days following discharge from the anchor
hospital stay through reductions in related hospital readmissions and
increased utilization of appropriate lower intensity PAC providers,
specifically increased utilization of home health services and
outpatient therapy and reduced utilization of SNFs and IRFs. Hospital
readmissions and facility-based PAC increase the typical Medicare
episode payment by 30 to 45 percent over episodes that do not include
these services. The proposed 20 percent stop-loss limit related to the
total episode payment corresponds to approximately 40 percent of
episode payment for the post-discharge period only, where the major
opportunities for efficiency through care redesign occur. Thus, taking
into consideration the historical patterns used to set target prices,
we believe it is reasonable to hold participant hospitals responsible
for repayment of actual episode spending that is up to 20 percent
greater than the target price. If a participant hospital's repayment
amount due to the raw NPRA would otherwise have exceeded the stop-loss
limit of 20 percent (comparable to 40 percent of Medicare payment for
the post-discharge period), the hospital's episodes would include much
poorer episode efficiency as compared to the hospital's historical
episodes, with large proportions of episodes including related
readmissions and facility-based PAC, costly services that we do not
expect to be necessary for most beneficiaries whose care is well-
coordinated and appropriate throughout a high quality LEJR episode.
The following hypothetical example illustrates how the proposed
stop-loss percentage would be applied in a given performance year for
the episodes of a participant hospital. In performance year 3, a
participant hospital had ten episodes triggered by MS-DRG 469, with a
target price for these episodes of $50,000. The hospital's episode
actual spending for these ten episodes was $650,000. The hospital's raw
NPRA that would otherwise be $150,000 ((10 x $50,000)-$650,000) would
be capped at the 20 percent stop-loss limit of $100,000 (.2 x 10 x
$50,000) so the hospital would owe CMS $100,000, rather than $150,000.
In performance year 3, the same participant hospital also has 100
episodes triggered by MS-DRG 470, with a target price for these
episodes of $25,000. The hospital's episode actual spending for these
100 episodes was $2,800,000. The hospital's raw NPRA would be $300,000
((100 x $25,000)-$2,800,000), an amount that would be due to CMS in
full as it would not be subject to the 20 percent stop-loss limit of
$500,000 (.2 x 100 x $25,000).
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[GRAPHIC] [TIFF OMITTED] TP14JY15.009
As illustrated in Figure 4 where we display results from our
national model for the proposed CCJR performance year 2 policies when
the phase-in of repayment responsibility begins and under the
assumption that utilization remains constant, we estimate that the 10
percent stop-loss limit would impact the amount of repayment due to the
raw NPRA for about 11 percent of hospitals. For performance year 3, the
20 percent stop-loss limit would affect significantly fewer hospitals,
only about 3 percent. We note that the stop-loss limit for years 3
through 5 where repayment responsibility is fully implemented is
consistent with the BPCI Model 2 policy. While Figure 3 assumes no
change in utilization patterns, under the model test we expect that the
proposed stop-loss limits could actually affect a smaller percentage of
hospitals in each performance year because we expect LEJR episode care
redesign incentivized by the model's financial opportunities to
generally reduce unnecessary utilization, thereby reducing actual
episode spending and, correspondingly, any associated repayment amounts
due to the raw NPRA. We note that we would include any post-episode
spending amount due to Medicare according to the policy proposed in
section III.C.8.d of this proposed rule in assessing the total
repayment amount due to the raw NPRA against the stop-loss limit for
the performance year to determine a hospital's total payment due to
Medicare, if applicable.
We seek comment on our proposal to adopt a 10 percent stop-loss
limit in performance year 2 and 20 percent stop-loss limit in
performance year 3 and beyond in CCJR as hospital repayment
responsibility for excess episode spending above the target price is
phased in and then maintained in the model.
(2) Proposed Limit on Raw NPRA Contribution to Reconciliation Payments
We believe a limit on reconciliation payments for CCJR would be
appropriate for several reasons. Due to the proposed nature of the CCJR
model during performance year 1, when hospitals have no repayment
responsibility for excess episode spending above the target price, CMS
bears full financial responsibility for Medicare actual episode
payments for an episode that exceed the target price, and we believe
our responsibility should have judicious limits. Therefore, we believe
it would be reasonable to cap a hospital's reconciliation payment due
to the raw NPRA as a percentage of episode payment on the basis of
responsible stewardship of CMS resources. In addition, we note that
beginning in performance year 1, participant hospitals would be
eligible for reconciliation payments due to the NPRA if actual episode
expenditures are
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less than the target price, assuming the proposed quality thresholds
are met. This proposal for reconciliation payments due to the NPRA
provides a financial incentive to participant hospitals from the
beginning of the model to manage and coordinate care throughout the
episode with a focus on ensuring that beneficiaries receive the lowest
intensity, medically appropriate care throughout the episode that
results in high quality outcomes. Therefore, we also believe it would
be reasonable to cap a hospital's reconciliation payment due to the raw
NPRA based on concerns about potential excessive reductions in
utilization under the CCJR model that could lead to beneficiary harm.
In determining what would constitute an appropriate reconciliation
payment limit due to the raw NPRA, we believe it should provide
significant opportunity for hospitals to receive reconciliation
payments for greater episode efficiency that includes achievement of
quality care and actual episode payment reductions below the target
price, while avoiding creating significant incentives for sharply
reduced utilization that could be harmful to beneficiaries. Thus, for
all 5 performance years of the model, we propose a limit on the raw
NPRA contribution to the reconciliation payment of no more than 20
percent of the hospital's target prices for each MS-DRG multiplied by
the number of the hospital's episodes for that MS-DRG. Hereinafter we
refer to this proposed reconciliation payment limit as the stop-gain
limit. This proposed stop-gain limit is parallel to the 20 percent
stop-loss limit proposed for performance year 3 and beyond. We believe
that a parallel stop-gain and stop-loss limit is important to provide
proportionately similar protections to CMS and participant hospitals
for their financial responsibilities under CCJR, as well as to protect
the health of beneficiaries.
As illustrated in Figure 3 where we display results from our
national model for the proposed CCJR performance year 2 policies under
the assumption that utilization remains constant, we estimate that the
20 percent stop-gain limit would impact the reconciliation payment
amount due to the raw NPRA of almost no hospitals. We note that a stop-
gain limit of 20 percent is consistent with BPCI Model 2 policy. While
Figure 3 assumes no change in utilization patterns, under the model
test we expect that the proposed stop-gain limit could actually affect
a few hospitals in each performance year because we expect LEJR episode
care redesign incentivized by the model's financial opportunities to
generally reduce unnecessary utilization, thereby reducing actual
episode spending and, correspondingly, increasing any associated
reconciliation payment amounts due to the raw NPRA. Nevertheless, we
believe the proposed stop-gain limit of 20 percent provides substantial
opportunity for hospitals to achieve savings over the target price
without excessive reductions in utilization, and those savings would be
paid back to hospitals fully in most cases without being affected by
the stop-gain limit. We seek comment on our proposal to adopt a 20
percent stop-gain limit for all performance years of CCJR.
We note that we plan to monitor beneficiary access and utilization
of services and the potential contribution of the stop-gain limit to
any inappropriate reduction in episode services. We refer readers to
section III.F. of this proposed rule for our proposals on monitoring
and addressing hospital performance under CCJR.
c. Proposed Policies for Certain Hospitals To Further Limit Repayment
Responsibility
As discussed in section III.C.3. of this proposed rule, we propose
that participant hospitals would be subject to repayment responsibility
for episode actual spending in excess of the applicable target price
beginning in performance year 2. Hospitals participating in CCJR would
not be responsible for actual episode payments greater than a ceiling
set at two standard deviations above the mean regional episode payment
as described earlier in this section. Additionally, we propose a 10
percent limit on the raw NPRA contribution to the repayment mount in
performance year 2 and a 20 percent limit on the raw NPRA contribution
to the repayment amount in performance year 3 and beyond, as described
in the previous section of this proposed rule.
Though our proposals provide several safeguards to ensure that
participant hospitals have limited repayment responsibility due to the
raw NPRA, we are proposing additional protections for certain groups of
hospitals that may have a lower risk tolerance and less infrastructure
and support to achieve efficiencies for high payment episodes.
Specifically, we are proposing additional protections for rural
hospitals, SCHs, Medicare Dependent Hospitals and Rural Referral
Centers (RCCs). We note that these categories of hospitals often have
special payment protections or additional payment benefits under
Medicare because we recognize the importance of preserving Medicare
beneficiaries' access to care from these hospitals. In MedPAC's Report
to the Congress in June 2012, MedPAC examined issues related to rural
Medicare beneficiaries and found that ``The primary objective of rural
special payments is to ensure that Medicare does its part to support
the financial viability of rural providers that are necessary for
beneficiaries' access to care. Some form of special payments will be
needed to maintain access in areas with low population density where
providers inevitably have low patient volumes and lack economies of
scale.'' \40\
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\40\ MedPAC Report to Congress June 2012, Chapter 5, page 121.
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We propose that a rural hospital would have additional protections
under the stop-loss limit proposal. For the purpose of this model, we
are proposing to define a rural hospital as an IPPS hospital that is
either located in a rural area in accordance with Sec. 412.64(b) or in
a rural census tract within an MSA defined at Sec. 412.103(a)(1) or
has reclassified to rural in accordance with Sec. 412.103 Such rural
hospitals would have additional protections under the stop-loss limit
proposal. Consistent with the findings in MedPAC's June 2012 Report to
the Congress, we believe rural hospitals may have a lower risk
tolerance and less infrastructure and support to achieve efficiencies
for high payment episodes, particularly if they are the rural hospital
is the only hospital in an area.
Our preliminary analysis examining national spending for MS-DRGs
469 and 470 from October 1, 2013 to September 30, 2014 showed that MS-
DRGs 469 and 470 cases represent a slightly higher proportion of cases
and spending for rural hospitals than the national average (for
example, MS-DRG 470 episode spending represents 12 percent of IPPS
spending for rural hospitals and represents 9 percent of IPPS spending
nationally).\41\ Additionally, our analysis on the distribution of
national spending of MS-DRGs 469 and 470 episodes by service type (that
is inpatient, outpatient, SNF, Home Health, Physician Part B, DME),
found that on average, inpatient services account for the most spending
for an MS-DRGs 469 and 470 episode (53 percent of spending for an MS-
DRG 469 episode and 55 percent of spending for MS-DRG 470 episode). SNF
services account for 27 percent of spending for MS-DRG 469 and 18
percent of spending for MS-DRG 470. The spending distribution for all
rural IPPS hospitals also differs from the
[[Page 41257]]
national average. For rural hospitals, inpatient services for CCJR
episodes account for more spending than the national average (56
percent for MS-DRG 469 and 57 percent for MS-DRG 470 for rural
hospitals) and SNF spending is higher than the national average (29
percent for MS-DRG 469 and 21 percent for MS-DRG 470 for rural
hospitals). It is evident that this category of hospitals has different
spending patterns than the national average. Furthermore, hospitals in
rural areas often face other unique challenges. Rural hospitals may be
the only source of healthcare services for beneficiaries living in
rural areas, and beneficiaries have limited alternatives should rural
hospitals be subject to financial changes under this model.
Additionally, because rural hospitals may be in areas with fewer
providers including fewer physicians and PAC facilities, rural
hospitals may have more limited options in coordinating care and
reducing spending while maintain quality of care under this model. We
believe that urban hospitals may not have similar concerns as they are
often in areas with many other providers and have greater opportunity
to develop efficiencies under this model. Given that rural hospitals
have different episode spending patterns, have different challenges in
coordinating care and reducing cost than urban hospitals and serve as a
primary access to care for beneficiaries, we believe that we should
have a more protective stop-loss limit policy as described later in
this section.
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\41\ Medicare FFS Parts A and B claims, CCJR episodes as
proposed, between October 1, 2013 and September 30, 2014.
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Additionally, we propose to provide additional protections for SCHs
as defined in Sec. 412.92, Medicare Dependent Hospitals as defined in
Sec. 412.108 and RRCs as defined in Sec. 412.96. Hospitals paid under
the IPPS can qualify for SCH status if they meet one of the following
criteria:
Located at least 35 miles from other like hospitals.
Located in a rural area, located between 25 and 35 miles
from other like hospitals, and no more than 25 percent of residents or
Medicare beneficiaries who become hospital inpatients in the hospital's
service area are admitted to other like hospitals located within a 35-
mile radius of the hospital or the hospital has fewer than 50 beds and
would meet the 25 percent criterion if not for the fact that some
beneficiaries or residents were forced to seek specialized care outside
of the service area due to the unavailability of necessary specialty
services at the hospital.
Hospital is rural and located between 15 and 25 miles from
other like hospitals but because of local topography or periods of
prolonged severe weather conditions, the other like hospitals are
inaccessible for at least 30 days in each of 2 out of 3 years.
Hospital is rural and the travel time between the hospital
and the nearest like hospital is at least 45 minutes.
If an IPPS hospital qualifies to be a SCH, the hospital can be paid
the higher of the federal payment rate paid to IPPS hospitals or a
cost-based hospital-specific rate as described in Sec. 412.78. Under
OPPS, a rural SCH can receive a 7.1 percent add on payment for most
services with certain exceptions, in accordance with Sec. 419.43(g).
These criteria to qualify for SCH status demonstrate that SCHs are
likely to be the sole hospital in an area. Furthermore, additional
payments provided under Medicare FFS for SCHs, demonstrates Medicare's
interest in ensuring these hospitals are able to provide services to
the Medicare beneficiaries who may have limited access to providers in
their area. As a result, we believe that we should provide SCHs
additional protections from hospital responsibility for repayment in
this model. We note that we propose to exclude these add-on payments
for SCHs, as described in section III.C.3.a of this proposed rule.
MDHs are defined as a hospital that meets the following criteria:
Located in a rural area.
Has 100 beds or less.
Is not a SCH.
Sixty percent of the hospital's inpatient days or
discharges were attributable to individuals entitled to Medicare Part A
benefits during specified time periods as provided in Sec. 412.108.
MDHs also qualify for special additional payments under the IPPS
where an MDH can receive the higher of a payment under the federal
standard rate for IPPS hospitals or the payment under federal standard
rate for IPPS hospitals plus 75 percent of the difference in payments
between a cost based hospital-specific rate and the federal standard
rate as described in Sec. 412.108(c). These criteria demonstrate that
MDHs are small, rural hospitals that have a high Medicare case mix
percentage and receive additional payments under the IPPS to ensure
financial stability and preserve beneficiary access to care to these
hospitals. Thus, we believe these factors demonstrate that we should
provide additional safeguards from hospital responsibility for
repayment in order to preserve access to care. We note that we propose
to exclude these payment enhancements for MDHs, as described in section
III.C.3.a. of this proposed rule.
RRCs are defined as IPPS hospitals with at least 275 beds that meet
the following criteria:
Fifty percent of the hospital's Medicare patients are
referred from other hospitals or from physicians who are not on the
staff of the hospital.
At least 60 percent of the hospital's Medicare patients
live more than 25 miles from the hospital.
At least 60 percent of all services the hospital furnishes
to Medicare patients are furnished to patients who live more than 25
miles from the hospital.
If a hospital does not meet the criteria described previously, a
hospital can also qualify for RRC status if a hospital meets the
following criteria:
For specified period of time, the hospital has a case-mix
that equals the lower of the median case mix index (CMI) value for all
urban hospitals nationally; or the median CMI value for urban hospitals
located in its region, excluding those hospitals receiving indirect
medical education payments.
Its number of discharges is at least--
++ 5,000 (or 3,000 for an osteopathic hospital); or
++ The median number of discharges for urban hospitals in the
census region in which it is located, set by the CMS through IPPS
rulemaking.
Additionally, a hospital must meet one of the following
criteria:
++ More than 50 percent of its active medical staff are specialists
who meet the conditions specified at Sec. 412.96(c)(3).
++ At least 60 percent of all discharges are for inpatients who
reside more than 25 miles from the hospital.
++ At least 40 percent of all inpatients treated are referred from
other hospitals or from physicians who are not on the hospital's staff.
As an RRC, a hospital can qualify for several additional payments
under the IPPS. For example, an RRC is not subject to the 12 percent
cap on Medicare Disproportionate Share Hospital payments that a rural
hospital would otherwise be subject to, in accordance with Sec.
412.106(d). Although RRCs are larger and have a higher Medicare patient
mix, they often serve as the sole provider to treat higher acuity
cases, as demonstrated by the RRC qualification criteria. As a result
of these unique characteristics of these hospitals, RRCs can receive
additional payments under Medicare FFS. Thus, it is also important to
provide additional protections for RRCs such that participation in this
model does not
[[Page 41258]]
result in significant financial loss that may reduce access for
Medicare beneficiaries.
For these reasons, we propose a stop-loss limit of 3 percent of
episode payments for these categories of hospitals in performance year
2 and a stop-loss limit of 5 percent of episode payments for
performance years 3 through 5. More specifically, in performance year
2, a rural hospital, SCH, RRC or MDH that is a participant hospital
would owe Medicare due to the raw NPRA no more than 3 percent of the
hospital's target price for the anchor MS-DRG multiplied by the number
of the hospital's CCJR episodes with that anchor MS-DRG in the
performance year. Additionally, in performance years 3 through 5, a
rural hospital, SCH, RRC or MDH that is a participant hospital would
owe Medicare due to the raw NPRA no more than 5 percent of the
hospital's target price for the anchor MS-DRG multiplied by the number
of the hospital's CCJR episodes with that anchor MS-DRG in the
performance year. We believe a different stop-loss limit policy is
warranted given the different spending patterns and the unique hospital
characteristics for these groups of hospitals as described earlier. We
believe this proposal strikes an appropriate balance between protecting
hospitals that often serve as the only access of care for Medicare
beneficiaries and having these hospitals meaningfully participate in
the model. We note that this proposal does not impact the proposed
stop-gain policy for these categories of hospitals. Rural hospitals,
SCHs, MDHs and RRCs still have the opportunity to participate in full
gains at 20 percent similar to other hospitals.
Hospitals can apply for SCH, MDH and RRC status through their MACs
and Regional Office at any time. MACs maintain the list of SCHs, MDHs,
and RRCs in the CMS Provider Specific File, which they update on a
quarterly basis. The special hospital designations recorded in the
Provider Specific File are used in Medicare claims pricing to ensure
that these hospitals are paid according to their special hospital
designation. Additionally, CMS can identify which hospitals are
considered rural for the purpose of this policy, using the Provider
Specific File to identify physical geographic location of a hospital
and the MACs to identify whether an urban hospital has reclassified to
rural under 42 CFR 412.103 or located in a rural census tract of an MSA
defined under 42 CFR 412.103(a)(1). Thus, we propose to identify rural
hospitals, MDHs, SCHs and RRCs at the time of reconciliation using the
Provider Specific File updated in December of the end of the
performance year and information from the MACs, and those hospitals
would be subject to the 3 percent stop-loss limit policy for that
performance year 2, and 5 percent stop-loss limit policy in performance
years 3 through 5. For example, to identify the hospitals that would
receive a 3 percent stop-loss limit for performance year 2, we would
use the Provider Specific File updated in December 2017. We note that
the special Medicare payment designation of MDH status has been
extended through FY 2017 by legislation under the Medicare Access and
CHIP Reauthorization Act of 2015. As a result, the proposed additional
protections for hospital responsibility for repayment for MDHs would
only apply to the extent that MDH status exists under Medicare. In
other words, should MDH expire on or after September 30, 2017, we would
not identify hospitals as MDHs to receive the 5-percent stop-loss limit
policy for performance year 3. Though MDH status is set to expire after
the third quarter of 2017, we would still identify MDHs to receive the
3-percent stop loss limit policy for all of performance year 2.
We note that we also considered excluding rural hospitals, SCHs,
MDHs and RRCs from the CCJR model altogether due to our concerns of
placing significant responsibility for actual episode payment above the
target price on these hospitals. Additionally, we were also concerned
that from an evaluation perspective, we would not have sufficient
sample size of CCJR episodes from these categories of hospitals to have
significant results of how these groups of hospitals perform under this
model. We weighed our reasons for excluding these hospitals with the
potential qualitative information we would gain from payment innovation
tests on rural hospitals in this model. We concluded that because the
CCJR model strives to test episode payment for a broad variety of
hospitals, it would be preferable to include these hospitals in the
CCJR model and provide additional protections from a large repayment
responsibility. We welcome public comment on our proposed stop-loss
limit for rural hospitals, SCHs, MDHs and RRCs and on our alternative
consideration to exclude these hospitals entirely from the CCJR model.
d. Proposed Hospital Responsibility for Increased Post-Episode Payments
We noted that while the proposed CCJR episode would extend 90-days
post-discharge from the anchor hospitalization, some hospitals may have
an incentive to withhold or delay medically necessary care until after
an episode ends to reduce their actual episode payments. We do not
believe this would be likely, especially given the relatively long
episode duration. However, in order to identify and address such
inappropriate shifting of care, we propose to calculate for each
performance year the total Medicare Parts A and B expenditures in the
30-day period following completion of each episode for all services
covered under Medicare Parts A and B, regardless of whether or not the
services are included in the proposed episode definition (section III.B
of this proposed rule), as is consistent with BPCI Model 2. Because we
base the proposed episode definition on exclusions, identified by MS-
DRGs for readmissions and ICD-9-CM diagnosis codes for Part B services
as discussed in section III.B. of this proposed rule, and Medicare
beneficiaries may typically receive a wide variety of related (and
unrelated) services during the CCJR episode that extends 90 days
following discharge from the anchor hospitalization, there is some
potential for hospitals to inappropriately withhold or delay a variety
of types of services until the episode concludes, without attending
carefully to the episode definition, especially for Part B services
where diagnosis coding on claims may be less reliable. This
inappropriate shifting could include both those services that are
related to the episode (for which the hospital would bear financial
responsibility as they would be included in the actual episode spending
calculation) and those that are unrelated (which would not be included
in the actual episode spending calculation), because a hospital engaged
in shifting of medically necessary services outside the episode for
potential financial reward may be unlikely to clearly distinguish
whether the services were related to the episode or not in the
hospital's decisions.
This calculation would include prorated payments for services that
extend beyond the episode as discussed in section III.C.3.b. of this
proposed rule. Specifically, we would identify whether the average 30-
day post-episode spending for a participant hospital in any given
performance year is greater than three standard deviations above the
regional average 30-day post-episode spending, based on the 30-day
post-episode spending for episodes attributed to all CCJR eligible
hospitals in the same region as the participant hospital. We propose
that beginning in performance year 2, if the hospital's average post-
episode spending exceeds
[[Page 41259]]
this threshold, the participant hospital would repay Medicare for the
amount that exceeds such threshold, subject to the stop-loss limits
proposed elsewhere in this proposed rule. We seek comment on this
proposal to make participant hospitals responsible for making
repayments to Medicare based on high spending in the 30 days after the
end of the episode and for our proposed methodology to calculate the
threshold for high post-episode spend.
9. Proposed Appeal Procedures
Under the CCJR model, we propose that we would determine target
prices for episodes of care using the methodology described in section
III.C. of this proposed rule. We propose to institute a reconciliation
payment process as described in section III.C.6, of this proposed rule,
and we propose to retrospectively calculate a participant hospital's
actual episode performance relative to its target price after the
completion of each performance year. The difference between the actual
episode spending of each CCJR episode and the target price of that
episode (calculated as target price subtracted by CCJR actual episode
payment) would be aggregated for all episodes initiated at a
participant hospital during each performance year. This calculation for
a participant hospital would be adjusted for post-episode payment
increases and stop gain and stop loss limits, as described in section
III.C.6.a. of this proposed rule. We propose to use quality measure
percentiles to determine hospital eligibility to receive the
reconciliation payment and use the successful reporting of the
voluntary PRO THA/TKA data to adjust the reconciliation payment, as
described in section III.C.5. of this proposed rule. The NPRA would be
reflected in a report sent to the participant hospital called the CCJR
Reconciliation Report.
We also propose to institute appeals processes for the CCJR model
that would allow participant hospitals to appeal matters related to
reconciliation and payment (that are previously discussed in this
section), as well as non-payment related issues, such as enforcement
matters detailed in section III.C.12.
a. Payment Processes
The proposed processes with regard to reconciliation, payment, use
of quality measures to determine payment, and stop-loss and stop-gain
policies are set forth in detail in sections III.C.5-8. In this
section, we propose an appeals processes that will apply to the matters
addressed in sections III.C.5-8, as well as matters not related to
payment or reconciliation. These appeals processes will apply to the
following payment and reconciliation processes:
Starting with the CCJR Reconciliation Report for
performance year 1, if the CCJR Reconciliation Report indicates the
reconciliation amount is positive, CMS would issue a payment, in a form
and manner specified by CMS, for that amount to the awardee within 30
calendar days from the issue date of the CCJR Reconciliation Report,
unless the participant hospital selects to pursue the calculation error
and reconsideration review processes, in which case payment will be
delayed as detailed later in this section.
For performance year 1, if the CCJR reconciliation report
indicates a repayment amount, the participant hospital would not be
required to make payment for that amount to CMS, as we have proposed
not to hold hospitals financially responsible for negative NPRAs for
the first performance year. In addition, if it is determined that a
CCJR hospital has a positive NPRA for performance year 1, and the
subsequent calculation for performance year 1 the following year, as
described in section III.C.6. of this proposed rule, determines that in
aggregate the performance year 1 NPRA and the subsequent calculation
amount for performance year 1 is a negative value (adding together the
NPRA amount from the reconciliation for performance year 1 as well as
the amount determined in the subsequent calculation, which would be
detailed on the CCJR reconciliation report for performance year 2), the
hospital would only be financially responsible for a repayment amount
that would net the performance year 1 NPRA and subsequent calculation
for year 1 to zero. This would be true for performance year 1 only,
given our proposal to begin phasing in financial responsibility in year
2 of the model as discussed in section III.C.2.c. of this proposed
rule. For performance years 2 through 5 of the model, for example, if
the NPRA for performance year 1 for a given hospital were $3,000, and
the subsequent calculation performed in Q2 2018 to account for claims
run-out and overlaps determined a repayment amount of $3,500 for claims
incurred and overlap during performance year 1, $3,000 would be applied
to the CCJR reconciliation report for performance year 2. If the NPRA
for performance year 2 were $5,000, the repayment amount of $3,000
would be netted against the $5,000, and the reconciliation payment for
performance year 2 would be $2,000. Given that downside risk has been
waived for performance year 1, the remaining $500 would not be added to
the CCJR reconciliation report for performance year 2. However,
beginning with the reconciliation process for performance year 3, any
repayment amounts generated through the subsequent calculation process
detailed in section III.C.6.b. would be netted against any repayment or
reconciliation amount on the respective CCJR reconciliation reports for
performance years 2, 3, 4, and 5. Starting with the reconciliation for
performance year 2, if the CCJR Reconciliation Report indicates the
NPRA is negative, the participant hospital would make payment for the
absolute value of that amount to CMS within 30-calendar days from the
issue date of the CCJR Reconciliation Report, in a form and manner
specified by CMS. Where the participant hospital does not issue payment
within 30-calendar days, we will issue a demand letter requiring
payment be made immediately.
The reconciliation or repayment amount may include
adjustments, arising from matters from the previous performance year,
as necessary to account for subsequent calculations performed for
performance years that were specified in earlier CCJR Reconciliation
Reports, as discussed in section III.C.6. of this proposed rule. For
example, we would potentially make determinations of additional monies
owed by Medicare to participant hospitals or vice versa in subsequent
periods based on the availability of updated Medicare administrative
data. These subsequent calculations would be contained in the
succeeding reconciliation report. For example, the subsequent
calculations applicable to performance year 1 would be contained in the
reconciliation report for performance year 2.
If the participant hospital fails to pay CMS the amount
owed by the date indicated in the demand letter, CMS will recoup owed
monies from participant hospital's present and future Medicare payments
to collect all monies due to CMS. While we propose that a participant
hospital may enter into financial arrangements with CCJR collaborators
that allow for some risk-sharing, as discussed in section III.C. of
this proposed rule, the participant hospital would be solely liable for
the repayment of the negative repayment amount to CMS. Where the
participant hospital fails to repay CMS in full for all monies owed,
CMS would invoke all legal means to collect the debt, including
referral of the remaining debt to the United States Department of the
Treasury, pursuant to 31 U.S.C. 3711(g).
[[Page 41260]]
b. Calculation Error
We propose the following calculation error process for participant
hospitals to contest matters related to payment or reconciliation, of
which the following is a non-exhaustive list: The calculation of the
participant hospital's reconciliation amount or repayment amount as
reflected on a CCJR reconciliation report; the calculation of NPRA; the
calculation of the percentiles of quality measure performance to
determine eligibility to receive a reconciliation payment; and the
successful reporting of the voluntary PRO THA/TKA data to adjust the
reconciliation payment. Participant hospitals would review their CCJR
reconciliation report and be required to provide written notice of any
error, in a calculation error form that must be submitted in a form and
manner specified by CMS. Unless the participant provides such notice,
the reconciliation report would be deemed final within 30 calendar days
after it is issued, and CMS would proceed with payment or repayment. If
CMS receives a timely notice of an error in the calculation, CMS would
respond in writing within 30 calendar days to either confirm or refute
the calculation error, although CMS would reserve the right to an
extension upon written notice to the participant hospital. We propose
that if a participant hospital does not submit timely notice of
calculation error in accordance with the timelines and processes
specified by CMS, the participant hospital would be precluded from
later contesting any of the following matters contained in the CCJR
reconciliation report for that performance year: any matter involving
the calculation of the participant hospital's reconciliation amount or
repayment amount as reflected on a CCJR reconciliation report; any
matter involving the calculation of NPRA; the calculation of the
percentiles of quality measure performance to determine eligibility to
receive a reconciliation payment; and the successful reporting of the
voluntary PRO THA/TKA data to adjust the reconciliation payment.
c. Dispute Resolution
(1) Limitations on Review
In accordance with section 1115A(d) of the Act, there is no
administrative or judicial review under sections 1869 or 1878 of the
Act or otherwise for the following:
The selection of models for testing or expansion under
section 1115A of the Act.
The selection of organizations, sites or participants to
test those models selected.
The elements, parameters, scope, and duration of such
models for testing or dissemination.
Determinations regarding budget neutrality under
subsection 1115A(b)(3).
The termination or modification of the design and
implementation of a model under subsection 1115A(b)(3)(B).
Decisions about expansion of the duration and scope of a
model under subsection 1115A(c), including the determination that a
model is not expected to meet criteria described in paragraph (1) or
(2) of such subsection.
(2) Matters Subject to Dispute Resolution
We propose that a participant hospital may appeal an initial
determination that is not precluded from administrative or judicial
review by requesting reconsideration review by a CMS official. The
request for review must be submitted for receipt by CMS within 10 days
of the notice of the initial determination. Initial determinations that
are not precluded from administrative or judicial review would include
the involuntary termination of a participant hospital's participation
in the CCJR model.
(3) Dispute Resolution Process
We propose the following dispute resolution process. First, we
propose that only a participant hospital may utilize the dispute
resolution process. Second, in order to access the dispute resolution
process a participant hospital must have timely submitted a calculation
error form, as previously discussed, for any matters related to
payment. We propose these matters would include any amount or
calculation indicated on a CCJR reconciliation report, including
calculations not specifically reflected on a CCJR reconciliation report
but which generated figures or amounts reflected on a CCJR
reconciliation report. The following is a non-exhaustive list of the
matters we propose would need to be first adjudicated by the
calculation error process as previously detailed: calculations of
reconciliation or repayment amounts; calculations of NPRA; and any
calculations or percentile distribution involving quality measures that
we propose could affect reconciliation or repayment amounts. If a
participant hospital wants to engage in the dispute resolution process
with regard to one of these matters, we propose it would first need to
submit a calculation error form. Where the participant hospital does
not timely submit a calculation error form, we propose the dispute
resolution process would not be available to the participant hospital
with regard to those matters for the reconciliation report for that
performance year.
If the participant hospital did timely submit a calculation error
form and the participant hospital is dissatisfied with CMS's response
to the participant hospital's notice of calculation error, the hospital
would be permitted to request reconsideration review by a CMS
reconsideration official. The reconsideration review request would be
submitted in a form and manner and to an individual or office specified
by CMS. The reconsideration review request would provide a detailed
explanation of the basis for the dispute and include supporting
documentation for the participant hospital's assertion that CMS or its
representatives did not accurately calculate the NPRA or post-episode
spending amount in accordance with CCJR rules. The following is a non-
exhaustive list of representative payment matters:
Calculations of NPRA, post-episode spending amount, target
prices or any items listed on a reconciliation report.
The application of quality measures to a reconciliation
payment, including the calculation of the percentiles thresholds of
quality measure performance to determine eligibility to receive
reconciliation payments, or the successful reporting of the voluntary
PRO THA/TKA data to adjust the reconciliation payment.
Any contestation based on the grounds that CMS or its
representative made an error in calculating or recording such amounts.
Where the matter is unrelated to payment, such as termination from
the model, the participant hospital need not submit a calculation error
form. We propose to require the participant hospital to timely submit a
request for reconsideration review, in a form and manner to be
determined by CMS. Where such request is timely received, we propose
CMS would process the request as discussed later in this section.
We propose that the reconsideration review would be an on-the-
record review (a review of briefs and evidence only). The CMS
reconsideration official would make reasonable efforts to notify the
hospital in writing within 15 calendar days of receiving the
participant hospital's reconsideration review request of the date and
time of the review, the issues in dispute, the review procedures, and
the procedures (including format and deadlines) for submission of
evidence (the ``Scheduling Notice''). The CMS reconsideration official
would make reasonable efforts to schedule the
[[Page 41261]]
review to occur no later than 30 days after the date of the Scheduling
Notice. The provisions at Sec. 425.804(b), (c), and (e) (as in effect
on the publication date of this proposed rule) would apply to reviews
conducted pursuant to the reconsideration review process for CCJR. The
CMS reconsideration official would make reasonable efforts to issue a
written determination within 30 days of the review. The determination
would be final and binding.
We solicit comment on our proposals related to appeals rights under
this model. The two-step appeal process for payment matters--(1)
calculation error form, and (2) reconsideration review--is used broadly
in other CMS models. We seek comment on whether we should develop an
alternative appeal process. We are also interested in whether there
should be appeal rights for reductions or eliminations of NPRA as a
result of enforcement actions, as discussed in section III.C.12 of this
proposed rule, and if so, whether the process for such appeals should
differ from the processes proposed here.
In accordance with section 1115A of the Act, we are proposing to
codify these proposals in regulation in the new proposed part 510 of
the CFR.
10. Proposed Financial Arrangements and Beneficiary Incentives
a. Financial Arrangements and Beneficiary Incentives
As discussed earlier in this proposed rule, we propose that CCJR
would be a retrospective episode payment model, under which Medicare
payments for services included in an episode of care would continue to
be made to all providers and suppliers under the existing payment
systems, and episode payment would be based on later reconciliation of
episode actual spending under those Medicare payment systems to the
episode target price. If the episode actual spending is less than the
target price, the participant hospital would receive a reconciliation
payment, assuming quality performance thresholds are met and the stop-
gain threshold is not exceeded. If the episode actual spending exceeds
the target price, beginning in performance year 2 hospitals would repay
the difference to Medicare up to the stop-loss threshold.
We believe that participant hospitals may wish to enter into
financial arrangements with providers and suppliers caring for
beneficiaries in CCJR episodes in order to align the financial
incentives of those providers and suppliers with the model goals of
improving quality and efficiency for LEJR episodes. For example, given
that the proposed episode duration is 90 days following discharge from
the anchor hospital stay and the episodes are broadly defined (see
section III.B of this proposed rule), many providers and suppliers
other than the participant hospital will furnish related services to
beneficiaries during episodes. Those providers and suppliers may
include physicians, physician group practices, skilled nursing
facilities (SNFs), home health agencies (HHAs), inpatient
rehabilitation facilities (IRFs), long term care hospitals (LTCHs),
outpatient therapy providers, and others. We expect that participant
hospitals will identify key providers and suppliers for CCJR
beneficiaries in their communities and then establish close
partnerships with them to assist the hospital in redesigning care for
LEJR episodes to improve quality and efficiency, coordinating and
managing care for beneficiaries, monitoring episode performance, and
refining care pathways. These providers and suppliers may invest
substantial time and other resources in these activities, yet they
would neither be the direct recipients of any reconciliation payments
from Medicare, nor directly responsible for repaying Medicare for
excess episode spending. Therefore, we believe it is possible that a
participant hospital that may receive a reconciliation payment from
Medicare or may need to repay Medicare may want to enter into financial
arrangements with other providers and suppliers to share risks and
rewards under CCJR.
In addition to providers and suppliers with which the participant
hospital may want to enter into financial arrangements to share risks
and reward, we expect that participant hospitals may choose to engage
with organizations that are neither providers nor suppliers to assist
with matters such as: episode data analysis; local provider and
supplier engagement; care redesign planning and implementation;
beneficiary outreach; CCJR beneficiary care coordination and
management; monitoring participant hospital compliance with the terms
and conditions of the CCJR model; or other model-related activities.
These organizations may play important roles in a hospital's plans to
implement the CCJR model based on the experience these organizations
may bring to the hospital's successful participation in the model, such
as prior experience with bundled payment initiatives, care coordination
expertise, familiarity with the local community, and knowledge of
Medicare claims data. We expect that all relationships established
between participant hospitals and these organizations for purposes of
the CCJR model would only be those permitted under existing law and
regulation, including any relationships that would include the
participant hospital's sharing of CCJR model risks and rewards with
these organizations. We would expect that all of these relationships
would solely be based on the level of engagement of the organization's
resources to directly support the participant hospitals' CCJR model
implementation.
Additionally, because the proposed broadly defined LEJR episodes
extend 90-days post-discharge from the anchor hospital stay, we believe
that participant hospitals caring for CCJR beneficiaries may want to
offer beneficiary incentives to encourage beneficiary adherence to
recommended treatment and active patient engagement in recovery. Such
incentives should be closely related to the provision of high quality
care during the episode and advance a clinical goal for a CCJR
beneficiary, and should not serve as inducements to beneficiaries to
seek care from the participant hospital or other specific suppliers and
providers. Such incentives may help participant hospitals reach their
quality and efficiency goals for CCJR episodes, while benefitting
beneficiaries' health and the Medicare Trust Fund if hospital
readmissions and complications are reduced while recovery continues
uninterrupted or accelerates.
(1) Financial Arrangements Under the CCJR Model
As previously noted, we believe that given the financial incentives
of episode payment in CCJR, participant hospitals in the model may want
to engage in financial arrangements to share reconciliation payments or
hospital internal cost savings or both, as well as responsibility for
repaying Medicare, with providers and suppliers making contributions to
the hospital's episode performance on spending and quality. Such
arrangements would allow the participant hospitals to share all or some
of the reconciliation payments they may be eligible to receive from
CMS, or the participant hospital's internal cost savings that result
from care for beneficiaries during a CCJR episode. Likewise, such
arrangements could allow the participant hospitals to share the
responsibility for the funds needed to repay Medicare with providers
and suppliers engaged in caring for CCJR beneficiaries, if those
providers and suppliers have a role in the hospital's episode spending
or quality performance. We propose to use the term ``CCJR
collaborator'' to refer to
[[Page 41262]]
such providers and suppliers, who may include the following:
SNFs.
HHAs.
LTCHs.
IRFs.
Physician Group Practices (PGPs).
Physicians, nonphysician practitioners, and outpatient
therapy providers.
We believe that CCJR collaborators should have a role in the
participant hospital's episode spending or quality performance.
Accordingly, we propose that the CCJR collaborator would directly
furnish related items or services to a CCJR beneficiary during the
episode and/or specifically participate in CCJR model LEJR episode care
redesign activities, such as attending CCJR meetings and learning
activities; drafting LEJR episode care pathways; reviewing CCJR
beneficiaries' clinical courses; developing episode analytics; or
preparing reports of episode performance, under the direction of the
participant hospital or another CCJR collaborator that directly
furnishes related items and services to CCJR beneficiaries. Note that
we propose later in this section a limit on Gainsharing Payments (as
that term is defined later in this section) to physician or
nonphysician CCJR collaborators, as well as to physician group
practices, related to PFS payments for services furnished to CCJR
beneficiaries. Therefore, in addition to playing a role in the
participant hospital's episode spending or quality performance,
physician, nonphysician, and physician group practice CCJR
collaborators must additionally directly furnish services to CCJR
beneficiaries in order to receive a Gainsharing Payment as result of
their financial arrangement with the participant hospital. We seek
comment on our proposed definition of CCJR collaborators, as well as
our proposed definition of a provider's or supplier's role in the
participant hospital's episode spending or quality performance.
We propose that certain financial arrangements between a
participant hospital and a CCJR collaborator be termed a ``CCJR Sharing
Arrangement,'' and that the terms of each CCJR Sharing Arrangement be
set forth in a written agreement between the participant hospital and
the CCJR collaborator. We propose to use the term ``Participation
Agreement'' to refer to such agreements. We propose that a ``CCJR
Sharing Arrangement'' would be a financial arrangement contained in a
Participation Agreement to share only the following: (1) CCJR
reconciliation payments (as that term is defined in section III.C of
this proposed rule); (2) the participant hospital's internal cost
savings (as that term is defined later in this section); and (3) the
participant hospital's responsibility for repayment to Medicare, as
discussed later in this section. Where a payment from a participant
hospital to a CCJR collaborator is made pursuant to a CCJR Sharing
Arrangement, we propose to define that payment as a ``Gainsharing
Payment.'' A Gainsharing Payment may only be only composed of the
following: (1) Reconciliation payments; (2) internal cost savings; or
(3) both. Where a payment from a CCJR collaborator to a participant
hospital is made pursuant to a CCJR Sharing Arrangement, we propose to
define that payment as an ``Alignment Payment.'' We propose that CCJR
Sharing Arrangements that provide for Alignment Payments would not
relieve the participant hospital of its ultimate responsibility for
repayment to CMS. Many of the programmatic requirements discussed later
in this proposed rule for Gainsharing Payments and Alignment Payments
are similar to those in Model 2 of the BPCI initiative.
The CCJR Sharing Arrangements between participant hospitals and
CCJR collaborators must be solely related to the contributions of the
CCJR collaborators to care redesign that achieve quality and efficiency
improvements under this model for CCJR beneficiaries. All Gainsharing
Payments or Alignment Payments between participant hospitals and CCJR
collaborators resulting from these arrangements must be auditable by
HHS, as discussed later in this section, to ensure their financial and
programmatic integrity. We emphasize that any CCJR collaborator that
receives a Gainsharing Payment or makes an Alignment Payment must have
furnished services included in the episode to CCJR beneficiaries.
Furthermore, the payment arrangements for Gainsharing Payments or
Alignment Payments contained in a CCJR Sharing Arrangement must be
actually and proportionally related to the care of beneficiaries in a
CCJR episode, and the CCJR collaborator must be contributing to the
care redesign strategies of the participant hospital.
We considered whether CCJR collaborators should be termed
``participants'' in this model, or whether the term ``participant''
should refer only to the participant hospitals located in MSAs selected
for participation. If CCJR collaborators are participants in the model,
we propose that their activities with regard to CCJR beneficiaries
would be regulated directly by CMS. However, if CCJR collaborators are
not participants, but rather are participating entities and individuals
in the CCJR model through signed agreements with participant hospitals,
their activities with regard to CCJR beneficiaries would be governed by
the Participation Agreement between a CCJR collaborator and a
participant hospital. Given the large number of potential CCJR
collaborators, the expected varied nature of their respective
arrangements with participant hospitals, and the potential
administrative burden in reporting information to CMS, we believe the
activities of CCJR collaborators with regard to CCJR beneficiaries
would be best managed by participant hospitals. As we discussed earlier
in this proposed rule, one justification for proposing that acute care
hospitals be the provider type financially responsible under the CCJR
model is the position of the hospital with respect to other providers
and suppliers, in terms of coordinating care for CCJR beneficiaries.
Given that position, we propose that where participant hospitals enter
into Participation Agreements that contain CCJR Sharing Arrangements
with CCJR collaborators, the participant hospital must also be
responsible for ensuring that those providers and suppliers comply with
the terms and requirements of this proposed rule. We seek comments on
this proposal; specifically, whether CCJR collaborators should be
termed participants in this model and subject to the applicable
requirements, or whether the responsibility for compliance with the
model's requirements is better managed by participant hospitals. We are
particularly interested in comments that address the advantages and
disadvantages of making CCJR collaborators participants in the model,
and whether there are certain provider or supplier types that CMS
should consider including as ``participants'' in the model.
The following discussion outlines our proposed requirements and
responsibilities of participant hospitals that engage in such CCJR
Sharing Arrangements. We believe these proposed requirements and
responsibilities are essential to ensuring that all CCJR Sharing
Arrangements are for the sole purpose of aligning the financial
incentives of collaborating providers and suppliers with those of the
participant hospital toward the CCJR model goals of improved LEJR
episode care quality and efficiency. We believe that the rationale for
and details of these arrangements must be documented and auditable by
HHS, with a direct tie between the arrangements and the
[[Page 41263]]
participant hospital's episode performance. Finally, we believe that
the proposed limitations to the arrangements, as described later in
this section, are necessary to ensure the integrity of the CCJR model
by minimizing incentives for problematic behaviors, such as patient
steering. We seek comments on all proposed requirements regarding CCJR
Sharing Arrangements.
With respect to whether certain entities or individuals should be
prevented from participating in the CCJR model, either as participant
hospitals or CCJR collaborators, we considered whether CMS should
conduct screening for program integrity purposes. Many CMS models
conduct screening during the application process and periodically
thereafter. These screenings examine provider and supplier program
integrity history, including any history of Medicare program exclusions
or other sanctions and affiliations with individuals or entities that
have a history of program integrity issues. Where a screening reveals
that a provider or supplier has a history of program integrity issues
or affiliations with individuals or entities that have a history of
program integrity issues, we may remove that provider or supplier from
the model. We utilize these screening processes for many CMS models,
including the BPCI initiative.
For several reasons, we believe that this type of screening for
participant hospitals is inapplicable to the CCJR model. Most
importantly, this model seeks to evaluate the performance in the model
of hospitals located in a particular MSA. We believe it is important
that all hospitals that meet the criteria for participation in the
model be included, even if those hospitals have a history of program
integrity issues. Further, we propose that CMS would evaluate the
quality of care and institute beneficiary protections in ways that
would go beyond some of the efforts of previous or existing CMS models.
We solicit comments on this proposal, including whether screening of
participant hospitals or CCJR collaborators might be appropriate or
useful in aiding HHS' program integrity efforts and identifying
untrustworthy parties or parties with program integrity history
problems.
(a) CCJR Sharing Arrangement Requirements
We propose that each CCJR Sharing Arrangement must include and set
forth in writing at a minimum--
A specific methodology and accounting formula for
calculating and verifying internal cost savings, if the participant
hospital elects to share internal cost savings through Gainsharing
Payments with CCJR collaborators. We propose to define internal cost
savings as the measurable, actual, and verifiable cost savings realized
by the participant hospital resulting from care redesign undertaken by
the participant hospital in connection with providing items and
services to beneficiaries within specific CCJR episodes of care.
Internal cost savings would not include savings realized by any
individual or entity that is not the participant hospital. Each CCJR
Sharing Arrangement must include specific methodologies for accruing
and calculating internal cost savings of the participant hospital,
where the hospital intends to share internal cost savings through a
CCJR Sharing Arrangement with a CCJR collaborator. The specific
methodologies for accruing and calculating internal cost savings must
be transparent, measurable, and verifiable in accordance with Generally
Accepted Accounting Principles (GAAP) and Government Auditing Standards
(The Yellow Book). The methodology must set out the specific care
redesign elements to be undertaken by the participant hospital or the
CCJR collaborator or both;
A description of the methodology and accounting formula
for calculating the percentage or dollar amount of a reconciliation
payment received from CMS that will be paid as a Gainsharing Payment
from the participant hospital to the CCJR collaborator;
A description of the methodology, frequency or dates of
distribution, and accounting formula for distributing and verifying any
and all Gainsharing Payments;
A description of the arrangement between the participant
hospital and the CCJR collaborator regarding Alignment Payments, where
the hospital and CCJR collaborator agree through a CCJR Sharing
Arrangement to share risk for repayment amounts due to CMS, as
reflected on a CCJR reconciliation report. The description of this
arrangement must include safeguards to ensure that such Alignment
Payments are made solely for purposes related to sharing responsibility
for funds needed to repay Medicare in the CCJR model. This description
should also include a methodology, frequency of payment, and accounting
formula for payment and receipt of any and all Alignment Payments;
A provision requiring the participant hospital to recoup
Gainsharing Payments paid to CCJR collaborators if Gainsharing Payments
were based on the submission of false or fraudulent data;
Plans regarding care redesign, changes in care
coordination or delivery that are applied to the participant hospital
or CCJR collaborators or both, and any description of how success will
be measured;
Management and staffing information, including type of
personnel or contactors that will be primarily responsible for carrying
out changes to care under the model;
The participant hospital must maintain records identifying
all CCJR collaborators, and the participant hospital's process for
determining and verifying the eligibility of CCJR collaborators to
participate in Medicare; and
All CCJR Sharing Arrangements must require compliance,
from both the participant hospital and the CCJR collaborator, with the
proposed polices regarding beneficiary notification set forth in
section III.F of this proposed rule.
With respect to these requirements for Participation Agreements and
CCJR Sharing Arrangements, we considered whether we should require
participant hospitals and CCJR collaborators to periodically report
this information to CMS for purposes of enforcement of these proposed
regulations. However, we are mindful of the administrative burden in
reporting this information as well as the challenges associated with
creating a universal collection tool that would account for all the
various iterations of financial arrangements into which participant
hospitals and CCJR collaborators may enter. Therefore, we are proposing
to require participant hospitals to retain this documentation as
previously described, as well as in section III.C.10(d) of this
proposed rule. We seek comment on this proposal as well as whether CMS
should require participant hospitals and CCJR collaborators to
periodically report data such as: Gainsharing Payments and/or Alignment
Payments distributed and received; name and identifier (NPI, CCN, TIN)
of all CCJR collaborators; and any other relevant information related
to Participation Agreements and CCJR Sharing Arrangements that would
assist HHS with enforcement of these regulations.
We solicit comments about all of the requirements set out in the
preceding discussion, including whether additional or different
safeguards would be needed to ensure program integrity, protect against
abuse, and ensure that the goals of the model are met.
[[Page 41264]]
(b) Participation Agreement Requirements
We propose that the Participation Agreement must obligate the
parties to comply, and must obligate the CCJR collaborator to require
any of its employees, contractors or designees to comply, without
limitation, to with the following requirements:
Each individual's or entity's participation in the CCJR
Sharing Arrangement is voluntary and without penalty for
nonparticipation.
Any Gainsharing Payments made pursuant to a CCJR Sharing
Arrangement must be made only from the participant hospital to the CCJR
collaborator with whom the participant hospital has signed a
Participation Agreement containing a CCJR Sharing Arrangement.
Additionally, we propose to require the following for all CCJR Sharing
Arrangements between a participant hospital and a CCJR collaborator
that is a physician group practice:
++ Where a Gainsharing Payment is made to a CCJR collaborator that
is a physician group practice, all monies contained in such a
Gainsharing Payment must be shared only with physician or nonphysician
practitioners that furnished a service to a CCJR beneficiary during an
episode of care in the calendar year from which the Net Payment
Reconciliation Amount (NPRA), as that term is defined in section
III.C.6. of this proposed rule, or internal cost savings was generated,
either or both of which are the only permitted sources of funds for a
Gainsharing Payment. We further propose that each CCJR Sharing
Arrangement between a participant hospital and a CCJR collaborator that
is physician group practice must stipulate that the physician group
practice may not retain any portion of a Gainsharing Payment or
distribute, by any method, any portion of a Gainsharing Payment to
physician or nonphysician practitioners who did not furnish a service
to a CCJR beneficiary during an episode of care in the calendar year
from which the NPRA or internal cost savings was generated.
Any Alignment Payments made pursuant to a CCJR Sharing
Arrangement may be made only to the participant hospital from the
entity or individual with whom the participant hospital has signed a
Participation Agreement containing a CCJR Sharing Arrangement.
Each CCJR Sharing Arrangement must require that the CCJR
collaborator be in compliance with all Medicare provider enrollment
requirements at Sec. 424.500 et seq., including having a valid and
active TIN or NPI.
Any internal cost savings or reconciliation payments that
the participant hospital seeks to share through CCJR Sharing
Arrangements must meet the requirements set forth in the final CCJR
rule (as finalized) and be administered by the participant hospital in
accordance with GAAP. In no event may the participant hospital
distribute any amounts pursuant to a CCJR Sharing Arrangement that are
not comprised of either internal cost savings or a reconciliation
payment, as those terms are defined in this proposed rule. All amounts
determined to be internal cost savings by the participant hospital must
reflect actual, internal cost savings achieved by the participant
hospital through implementation of care redesign elements identified
and documented by the participant hospital. In no case may internal
cost savings reflect ``paper'' savings from accounting conventions or
past investment in fixed costs.
Any Alignment Payments that the participant hospital
receives through a CCJR Sharing Arrangement must meet the requirements
set forth in the final CCJR rule (as finalized) and be administered by
the participant hospital in accordance with GAAP.
CCJR Sharing Arrangements must not include any amounts
that are not Alignment Payments or Gainsharing Payments.
Further, we propose that each Participation Agreement--
++ Between the participant hospital and a CCJR collaborator must
obligate the CCJR collaborator to provide the participant hospital and
HHS access to the CCJR collaborator's records, information, and data
for purposes of monitoring and reporting and any other lawful purpose.
Records, information, and data regarding the CCJR Sharing Arrangement
must have sufficient detail to verify compliance with all material
terms of the CCJR Sharing Arrangement and the terms of the CCJR model;
++ Must require the participant hospital and the CCJR collaborator
to include in their compliance programs specific oversight of their
CCJR participation agreements and compliance with the requirements of
the CCJR mode;
++ Must require compliance, from both the participant hospital and
the CCJR collaborator, with the proposed polices regarding beneficiary
notification set forth in section III.F; and
++ Must require the board or other governing body of the
participant hospital to have responsibility for overseeing the
participant hospital's participation in the model, its arrangements
with CCJR collaborators, its payment of Gainsharing Payments and
receipt of Alignment Payments, and its use of beneficiary incentives in
the CCJR model.
Participation Agreements must require all CCJR
collaborators to comply with any evaluation, monitoring, compliance,
and enforcement activities performed by HHS or its designees for the
purposes of operating the CCJR model.
Each Participation Agreement must require the CCJR
collaborator to permit site visits from CMS, or one of its designees,
for purposes of evaluating the model.
We solicit comments about all of the requirements set out in the
preceding discussion, including whether additional or different
safeguards would be needed to ensure program integrity, protect against
abuse, and ensure that the goals of the model are met.
(c) Gainsharing Payment and Alignment Payment Conditions and
Restrictions
We propose the following conditions and restrictions concerning
Gainsharing Payments and Alignment Payments made pursuant to a CCJR
Sharing Arrangement:
No entity or individual, whether or not a party to a
Participation Agreement, may condition the opportunity to receive
Gainsharing Payments in CCJR on the volume or value of past or
anticipated referrals or other business generated to, from, or among a
participant hospital, any CCJR collaborators, and any individual or
entity affiliated with a participant hospital or CCJR collaborator.
Participant hospitals would not be required to share
reconciliation payments, internal cost savings, or responsibility for
repayment to CMS with other providers and suppliers. However, where a
participant hospital elects to engage in those activities, we propose
that such activities be limited to the provisions prescribed in this
proposed rule.
We propose that Gainsharing Payments must be distributed
on an annual basis, and are required to meet the following criteria:
++ Must be clearly identified and comply with all provisions in
this proposed rule, as well as all applicable laws, statutes, and
rules;
++ Must not be a loan, advance payments, or payments for referrals
or other business; and
++ Must be made by electronic funds transfer (EFT).
We propose that Alignment Payments from a CCJR
collaborator to a
[[Page 41265]]
participant hospital may be made at any interval, and are required to
meet the following criteria:
++ Must be clearly identified and comply with all provisions in
this proposed rule, as well as all applicable laws, statutes, and
rules;
++ Must not be issued, distributed, or paid prior to the
calculation by CMS of a reconciliation report reflecting a negative Net
Payment Reconciliation Amount (NPRA);
++ Must not be a loan, advance payments, or payments for referrals
or other business; and
++ Must be made by electronic funds transfer (EFT).
We propose that each CCJR Sharing Arrangement stipulate
that any CCJR collaborator that is subject to any action involving
noncompliance with the provisions of this propose rule, engaged in
fraud or abuse, providing substandard care, or have other integrity
problems not be eligible to receive any Gainsharing Payments related to
NPRA generated during the time that coincides with the action involving
any of the issues previously listed until the action has been resolved.
No entity or individual, as whether or not a party to a
Participation Agreement, may condition the opportunity to make or
receive Alignment Payments in CCJR on the volume or value of past or
anticipated referrals or other business generated to, from, or among a
participant hospital, any CCJR collaborators, and any individual or
entity affiliated with a participant hospital or CCJR collaborator.
In a calendar year, the aggregate amount of the total
Gainsharing Payments distributed by the participant hospital that are
derived from a CCJR reconciliation payment may not exceed the amount of
the reconciliation payment that the participant hospital received from
CMS.
In a calendar year, the aggregate amount of the total
Alignment Payments received by the participant hospital may not exceed
50 percent of the participant hospital's repayment amount due to CMS.
If no repayment amount is due, then no Alignment Payments may be
received by the participant hospital.
We propose that the participant hospital must retain at
least 50 percent of its responsibility for repayment to CMS, pursuant
to the repayment amount reflected in each annual reconciliation report,
under the CCJR model. Given that the participant hospital will be
responsible for developing and coordinating care redesign strategies in
response to its participation in the CCJR model, we believe it is
important that the participant hospital retain a significant portion of
its responsibility for repayment to CMS. For example, upon receipt of a
reconciliation report indicating that the participant hospital owes
$100 to CMS, the participant hospital would be permitted to receive no
greater than $50 in Alignment Payments, in the aggregate, from its CCJR
collaborators.
Further, we propose that a CCJR Sharing Arrangement must
limit the amount a single CCJR collaborator may make in Alignment
Payments to a single participant hospital. We propose that a single
CCJR collaborator not make an Alignment Payment to a participant
hospital that represents an amount greater than 25 percent of the
repayment amount reflected on the participant hospital's annual
reconciliation report. For example, upon receipt of a reconciliation
report indicating that the participant hospital owes $100 to CMS, the
participant hospital would be permitted to receive no more than $25 in
an Alignment Payment from a single entity or individual who is a CCJR
collaborator of the participant hospital.
Gainsharing Payments and Alignment Payments must not
induce the participant hospital, CCJR collaborators, or the employees,
contractors, or designees of the participant hospital or CCJR
collaborators to reduce or limit medically necessary services to any
Medicare beneficiary.
Individual physician and nonphysician practitioners,
whether or not a party to a CCJR Sharing Arrangement, must retain their
ability to make decisions in the best interests of the patient,
including the selection of devices, supplies, and treatments.
Entities furnishing services to beneficiaries during a
CCJR episode, whether or not a party to a CCJR Sharing Arrangement,
must retain their ability to make decisions in the best interests of
the patient, including the selection of devices, supplies, and
treatments.
Gainsharing methodologies for calculating Gainsharing
Payments and Alignment Payments must not directly account for volume or
value of referrals, or business otherwise generated, between or among a
participant hospital, any CCJR collaborators, and any individual or
entity affiliated with a participant hospital or CCJR collaborator.
Gainsharing Payments must be derived solely from
reconciliation payments or internal cost savings or both.
The total amount of Gainsharing Payments for a calendar
year paid to an individual physician or nonphysician practitioner who
is a CCJR collaborator must not exceed a cap. The cap is 50 percent of
the total Medicare approved amounts under the Physician Fee Schedule
(PFS) for services furnished to the participant hospital's CCJR
beneficiaries during a CCJR episode by that physician or nonphysician
practitioner. This cap of 50 percent on Gainsharing Payments to
individual physician or nonphysician practitioner is consistent with
the same policy for the BPCI initiative. The purpose of this cap is to
limit the amount of Gainsharing Payments an individual practitioner may
receive due to his/her provision of services included in the CCJR
model.
The total amount of Gainsharing Payments for a calendar
year paid to an physician group practice that is a CCJR collaborator
must not exceed a cap. The cap is 50 percent of the sum of the total
Medicare approved amounts under the Physician Fee Schedule (PFS) for
services furnished by physician or nonphysician practitioner members of
the physician group practice to the participant hospital's CCJR
beneficiaries during a CCJR episode by those physicians or nonphysician
practitioners.
We solicit comments about all of the requirements set out in the
preceding discussion, including whether additional or different
safeguards would be needed to ensure program integrity, protect against
abuse, and ensure that the goals of the model are met.
(d) Documentation and Maintenance of Records
We propose to require participant hospitals and CCJR collaborators
to comply with audit and document retention requirements similar to
those required by the Medicare Shared Savings Program, BPCI Model 2,
and other Innovation Center models. Specifically, with respect to all
Participation Agreements and CCJR Sharing Arrangements, the participant
hospital and CCJR collaborator must:
Comply with the retention requirements regarding
Participation Agreements and CCJR Sharing Arrangements set forth in
subsection III.C.10(a)-(d).
Maintain and give CMS, the Office of Inspector General of
the Department of Health and Human Services (OIG), and the Comptroller
General or their designee(s) access to all books, contracts, records,
documents, and other evidence (including data related to utilization
and payments, quality performance measures, billings, and CCJR Sharing
Arrangements related to
[[Page 41266]]
CCJR) sufficient to enable the audit, evaluation, inspection, or
investigation of the participant hospital's compliance, as well as the
compliance of any CCJR collaborator that has a CCJR Sharing Arrangement
with the participant hospital, with CCJR requirements, the
Participation Agreement, the quality of services furnished, the
obligation to repay any reconciliation payments owed to CMS, the
calculation, distribution, receipt, or recoupment of Gainsharing
Payments or Alignment Payments.
Maintain such books, contracts, records, documents, and
other evidence for a period of 10 years from the last day of the
participant hospital's participation in the CCJR model or from the date
of completion of any audit, evaluation, inspection, or investigation,
whichever is later, unless--
++ CMS determines there is a special need to retain a particular
record or group of records for a longer period and notifies the
participant hospital or CCJR collaborator at least 30 calendar days
before the normal disposition date; or
++ There has been a dispute or allegation of fraud or similar fault
against the participant hospital or any CCJR collaborator in which case
the records must be maintained for an additional 6 years from the date
of any resulting final resolution of the dispute or allegation of fraud
or similar fault.
Notwithstanding any CCJR Sharing Arrangements between the
participant hospital and CCJR collaborators, the participant hospital
must have ultimate responsibility for adhering to and otherwise fully
complying with all provisions of the CCJR model.
OIG Authority is not limited or restricted by the
provisions of the CCJR model, including the authority to audit,
evaluate, investigate, or inspect the participant hospital, CCJR
collaborators, or any other person or entity or their records, data, or
information, without limitation.
None of the provisions of the CCJR model limits or
restricts any other government authority permitted by law to audit,
evaluate, investigate, or inspect the participant hospital, CCJR
collaborators, or any other person or entity or their records, data, or
information, without limitation.
We solicit comments about all of the requirements set out in the
preceding discussion, including whether additional or different
safeguards would be needed to ensure program integrity, protect against
abuse, and ensure that the goals of the model are met.
(2) Beneficiary Incentives Under the CCJR Model
We believe that the CCJR model will incent participant hospitals to
furnish directly and otherwise coordinate services throughout the
episode that lead to higher quality care for the beneficiary and lower
episode spending. We believe that one mechanism that may be useful to
the participant hospital in achieving these goals is the provision of
certain items and services to the beneficiary during the episode of
care. We also considered whether this policy on beneficiary incentives
should extend to providers and suppliers, other than the participant
hospital, that furnish services during the CCJR episode of care.
However, as discussed in section III.A, given our belief that the
participant hospital is best positioned to coordinate the care of
beneficiaries, we believe they are also better suited than other
providers and suppliers to provide beneficiary incentives. Thus, we
propose to include in the CCJR model certain in-kind patient engagement
incentives to the beneficiary, subject to the following conditions:
The incentive must be provided by the participant hospital
to the beneficiary during CCJR episode of care.
There must be a reasonable connection between the item or
service and the beneficiary's medical care.
The item or service must be a preventive care item or
service or an item or service that advances a clinical goal for a CCJR
beneficiary, including the following: Increasing the beneficiary's
engagement in the management of his or her own health care; adherence
to a treatment or drug regimen; adherence to a follow-up care plan;
reduction of readmissions and complications resulting from LEJR
procedures; and management of chronic diseases and conditions that may
be affected by the LEJR procedure.
Items of technology comply with certain safeguards
regarding value, as discussed later in this section.
The participant hospital must maintain contemporaneous
documentation of the incentives provided to beneficiaries for a period
of 10 years.
The cost of the incentives is not shifted to another
federal health care program.
For example, under this proposal, participant hospitals could
provide incentives such as post-surgical monitoring equipment to track
patient weight and vital signs for post-surgical patients discharged
directly to home, but they could not provide theater tickets, which
would bear no reasonable connection to the patient's medical care.
Similarly, we are proposing that participant hospitals might provide
post-surgical monitoring equipment, but not broadly used technology
that is more valuable to the beneficiary than equipment that is
reasonably necessary for the patient's post-surgical care. In such
circumstances, a reasonable inference arises that the technology would
not be reasonably connected to the medical care of the patient. Among
other things, this safeguard precludes incentives that might serve to
induce beneficiaries inappropriately to receive other medical care that
is not included in the episode.
We propose that participant hospitals would be required to maintain
contemporaneous documentation of such items and services furnished that
exceed $10, including the date and identity of the beneficiary to whom
the item or service was provided. We further propose that the required
documentation be maintained for a period of 10 years.
We propose that items and services involving technology provided to
beneficiaries may not exceed $1,000 in retail value at the time of
donation for any one beneficiary in any one CCJR episode. Items of
technology exceeding $50 in retail value at the time of donation must
remain the property of the participant hospital and must be retrieved
from the beneficiary at the end of the episode, with the documentation
of the date of retrieval. In addition, the amount and nature of the
technology must be the minimum necessary to achieve the goals
previously noted earlier in this section. Finally, we propose that
beneficiary incentives may not be tied to the receipt of services
outside the episode of care and that the cost of the incentives cannot
be shifted to a federal health care program. The aforementioned
proposals regarding beneficiary incentives are consistent with the
policies on beneficiary incentives in other CMS models, such as the
BPCI initiative.
We seek comment on our proposal for beneficiary incentives under
CCJR. In addition to general comments on the proposal, we are
interested in comments on whether the $1,000 limit on technology items
and services is necessary, reasonable, and appropriate. We also solicit
comment on whether retrieving technology valued at more than $50 is too
burdensome and whether elimination of that requirement will prevent
abuse. We also solicit comment on the documentation requirement for
items and services furnished that exceed $10, or whether a different
amount would be more
[[Page 41267]]
appropriate and less burdensome. We welcome comments on additional
program integrity safeguards for these arrangements.
(3) Compliance With Fraud and Abuse Laws
Certain arrangements between and among participant hospitals and
third parties or beneficiaries may implicate the civil monetary penalty
(CMP) law (sections 1128A(a)(5), (b)(1) and (b)(2) of the Act), the
Federal Anti-kickback statute (section 1128B(b)(1) and (2) of the Act),
or the physician self-referral prohibition (section 1877 of the Act).
In many cases, arrangements that implicate these laws can be structured
to comply with them by using existing safe harbors and exceptions.
Section 1115A(d)(1) of the Act authorizes the Secretary to waive
certain specified fraud and abuse laws as may be necessary solely for
purposes of testing of payment models under section 1115A(b) of the
Act. A waiver is not needed for an arrangement that does not implicate
the fraud and abuse laws or that implicates the fraud and abuse laws
but either fits within an existing exception or safe harbor, as
applicable, or does not otherwise violate the law. Accordingly,
pursuant to section 1115A(d)(1) of the Act, the Secretary will consider
whether waivers of certain fraud and abuse laws are necessary to test
the CCJR model as the model develops. The vehicle for promulgating
waivers, if any, is under consideration. Such waivers, if any, would be
promulgated separately from this proposed regulation by OIG (as to
sections 1128A and 1128B of the Act) and CMS (as to section 1877 of the
Act), to which the respective authorities have been delegated.
The requirements of the CCJR final rule will bear on the need for
and scope of any fraud and abuse waivers that might be granted for the
CCJR model. Because of the close nexus between the final regulations
governing the structure and operations of the CCJR model and the
development of any fraud and abuse waivers necessary to carry out the
provisions of the model, CMS and OIG may, when considering the need for
or scope of any waivers, consider comments submitted in response to
this proposed rule and the provisions of the CCJR final rule.
11. Proposed Waivers of Medicare Program Rules
a. Overview
We believe it may be necessary and appropriate to provide
additional flexibilities to hospitals participating in CCJR, as well as
other providers that furnish services to beneficiaries in CCJR
episodes. The purpose of such flexibilities would be to increase LEJR
episode quality and decrease episode spending or internal costs or both
of providers and suppliers that results in better, more coordinated
care for beneficiaries and improved financial efficiencies for
Medicare, providers, and beneficiaries. These possible additional
flexibilities could include use of our waiver authority under section
1115A of the Act, which provides authority for the Secretary to waive
such requirements of title XVIII of the Act as may be necessary solely
for purposes of carrying out section 1115A of the Act with respect to
testing models described in section 1115A(b) of the Act. This provision
affords broad authority for the Secretary to waive statutory Medicare
program requirements as necessary to carry out the provisions of
section 1115A of the Act.
As we have stated elsewhere in sections I.B and III.A of this
proposed rule, our previous and current efforts in testing episode
payment models have led us to believe that models where entities bear
financial responsibility for total Medicare spending for episodes of
care hold the potential to incentivize the most substantial
improvements in episode quality and efficiency. As discussed in section
III.C of this proposed rule, we are proposing that hospitals
participating in this model be eligible for reconciliation payments
based on improved performance starting in performance year 1, and we
would phase-in repayment responsibility for excess episode spending
starting in performance year 2. We believe that where participant
hospitals bear repayment responsibility for excess episode spending
beyond the target price while high quality care is valued, they will
have an increased incentive to coordinate care furnished by the
hospital and other providers and suppliers throughout the episode to
improve the quality and efficiency of care. With these incentives
present, there may be a reduced likelihood of over-utilization of
services that could otherwise result from waivers of Medicare program
rules. Given these circumstances, waivers of certain program rules for
providers and suppliers furnishing services to CCJR beneficiaries may
be appropriate to offer more flexibility than under existing Medicare
rules for such providers and suppliers, so that they may provide
appropriate, efficient care for beneficiaries. An example of such a
program rule that could be waived to potentially allow more efficient
LEJR episode care would be the 3-day inpatient hospital stay
requirement prior to a covered SNF stay for beneficiaries who could
appropriately be discharged to a SNF after less than a 3-day inpatient
hospital stay.
In addition, we believe that waivers of certain Medicare program
rules are necessary to make reconciliation payments to or recoup
payments from participant hospitals as a result of the Net Payment
Reconciliation Amount (NPRA) for each performance year as discussed in
section III.C.6.a. of this proposed rule, as well as to exclude
beneficiary cost-sharing from these reconciliation payments or
recoupments.
We welcome comments on possible waivers under section 1115A of the
Act of certain Medicare program rules beyond those specifically
discussed in this proposed rule that might be necessary to test this
model. We will consider the comments that are received during the
public comment period and our early model implementation experience and
may make future proposals regarding program rule waivers during the
course of the model test. We are especially interested in comments
explaining how such waivers could provide providers and suppliers with
additional ways that are not permitted under existing Medicare rules to
increase quality of care and reduce unnecessary episode spending, but
that could be appropriately used in the context of CCJR where
participant hospitals bear full responsibility for total episode
spending by performance year 3. We are also interested in receiving
comments regarding the timing and manner in which such waivers, were
they to be offered, would be implemented. For example, would it be
necessary and appropriate to offer program waivers early in the model
test to allow providers and suppliers adequate time to adjust their
care coordination strategies to implement changes permitted by the
waivers, despite there being no full repayment responsibility for
excess episode spending until performance year 3? What program
integrity and beneficiary protection risks could be introduced by
waivers of the program rules described later in this section of this
proposed rule and how could we mitigate those risks? What other issues
should be considered when making use of waiver authority with respect
to program rules? What operational issues do CMS and providers and
suppliers furnishing services to beneficiaries in the model need to
consider and what processes would need to be in place to implement
these alternative program policies?
[[Page 41268]]
What implications would there be for provider and supplier
infrastructure, including IT and other systems and processes? What
provider education would be needed? We note that any waivers included
in a final rule would be offered to participant hospitals, but
depending on the specifics of each waiver, might be applied to services
furnished by providers and suppliers other than the hospital. Where
that is the case, we seek input on how we may best educate and
disseminate information using methods effective in reaching providers
and suppliers. Additionally, we seek comment on how we would
appropriately and accurately track the use of waivers by providers and
suppliers other than participant hospitals.
Specific program rules for which we propose waivers under the CCJR
model to support provider and supplier efforts to increase quality and
decrease episode spending and for which we invite comments are included
in the sections that follow. We propose that these waivers of program
rules would apply to the care of beneficiaries who are in CCJR episodes
at the time when the waiver is used to bill for a service that is
furnished to the beneficiary, even if the episode is later cancelled as
described in section III.B.3.b of this proposed rule. If a service is
found to have been billed and paid by Medicare under circumstances only
allowed by a program rule waiver for a beneficiary not in the CCJR
model at the time the service was furnished, CMS would recoup payment
for that service from the provider or supplier who was paid, and
require that provider and supplier to repay the beneficiary for any
coinsurance previously collected.
We also generally seek comment on any additional Medicare program
rules that it may be necessary to waive using our authority under
section 1115A of the Act in order to effectively test the CCJR model
that we could consider in the context of our early model implementation
experience to inform any future proposals we may make.
b. Post-Discharge Home Visits
We expect that the broadly defined LEJR episodes with a duration of
90 days following hospital discharge as we propose in section III.B. of
this proposed rule will result in participant hospitals redesigning
care by increasing care coordination and management of beneficiaries
following surgery. This will require participant hospitals to pay close
attention to any underlying medical conditions that could be affected
by the anchor hospitalization and improving coordination of care across
care settings and providers. Beneficiaries may have substantial
mobility limitations during LEJR episodes following discharge to their
home or place of residence that may interfere with their ability to
travel easily to physicians' offices or other health care settings.
Adopting new strategies to increase beneficiary adherence to and
engagement with recommended treatment and follow-up care following
discharge from the hospital or PAC setting will also be important to
high quality episode care. Scientific evidence exists \42\ to support
the use of home nursing visits among Medicare beneficiaries in
improving care coordination following hospital discharge. In addition,
we believe the financial incentives in this episode payment model will
encourage hospitals to closely examine the most appropriate PAC
settings for beneficiaries so that the clinically appropriate setting
of the lowest acuity is recommended following discharge from the anchor
hospitalization. We expect that all these considerations will lead to
greater interest on the part of hospitals and other providers and
suppliers caring for CCJR beneficiaries in furnishing services to
beneficiaries in their home or place of residence. Such services could
include visits by licensed clinicians other than physicians and
nonphysician practitioners
---------------------------------------------------------------------------
\42\ Naylor MD, Brooten D, Campbell R, Jacobsen BS, Mezey MD,
Pauly MV, Schwartz JS. JAMA. 1999:281(7):613-620. doi:10/1001/
jama.281.7.613
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In order for Medicare to pay for home health services, a
beneficiary must be determined to be ''home-bound''. Specifically,
sections 1835(a) and 1814(a) of the Act require that a physician
certify (and recertify) that in the case of home health services under
the Medicare home health benefit, such services are or were required
because the individual is or was ''confined to the home'' and needs or
needed skilled nursing care on an intermittent basis, or physical or
speech therapy or has or had a continuing need for occupational
therapy. A beneficiary is considered to be confined to the home if the
beneficiary has a condition, due to an illness or injury, that
restricts his or her ability to leave home except with the assistance
of another individual or the aid of a supportive device (that is,
crutches, a cane, a wheelchair or a walker) or if the beneficiary has a
condition such that leaving his or her home is medically
contraindicated. While a beneficiary does not have to be bedridden to
be considered confined to the home, the condition of the beneficiary
must be such that there exists a normal inability to leave home and
leaving home requires a considerable and taxing effort by the
beneficiary. Absent this condition, it would be expected that the
beneficiary could typically get the same services in an outpatient or
other setting. Thus, the homebound requirement provides a way to help
differentiate between patients that require medical care at home versus
patients who could more appropriately receive care in a less costly
outpatient setting. Additional information regarding the homebound
requirement is available in the Medicare Benefit Manual (Pub 100-02);
Chapter 7, ``Home Health Services,'' Section 30.1.1, ``Patient Confined
to the Home.''
We considered whether a waiver of the homebound requirement would
be appropriate under the CCJR model, particularly beginning in
performance year 2, where hospitals begin to bear repayment
responsibility for excess episode spending. Waiving the homebound
requirement would allow additional beneficiaries to receive home health
care services in their home or place of residence. As previously
discussed, physician certification that a beneficiary meets the
homebound requirement is a prerequisite for Medicare coverage of home
health services, and waiving the homebound requirement could result in
lower episode spending in some instances. For example, if a beneficiary
is allowed to have home health care visits, even if the beneficiary is
not considered homebound, the beneficiary may avoid a hospital
readmission. All other requirements for the Medicare home health
benefit would remain unchanged. Thus, under such a waiver, only
beneficiaries who otherwise meet all program requirements to receive
home health services would be eligible for coverage of home health
services without being homebound.
However, we are not proposing to waive the homebound requirement
under CCJR for several reasons. Based on the typical clinical course of
beneficiaries after LEJR procedures, we believe that many beneficiaries
would meet the homebound requirement for home health services
immediately following discharge from the anchor hospitalization or
following discharge to their home or place of residence from a SNF that
furnished PAC services immediately following the hospital discharge, so
they could receive medically necessary home health services under
existing program rules. Home health episodes are 60 days in duration,
and payment adjustments are made for beneficiaries who require only a
few visits during the episode or who
[[Page 41269]]
are discharged during the episode. For those CCJR beneficiaries who
could benefit from home visits by a licensed clinician for purposes of
assessment and monitoring of their clinical condition, care
coordination, and improving adherence with treatment but who are not
homebound, we do not believe that paying for these visits as home
health services under Medicare is necessary or appropriate, especially
given that Medicare payments for home health services are set based on
the clinical care furnished to beneficiaries who are truly homebound.
Finally, in other CMS episode payment models, such as BPCI, we have not
waived the homebound requirement for home health services.
In BPCI, we have provided a waiver of the ``incident to'' rule to
allow a physician or nonphysician practitioner participating in care
redesign under a participating BPCI provider to bill for services
furnished to a beneficiary who does not qualify for Medicare coverage
of home health services as set forth under Sec. 409.42 where the
services are furnished in the beneficiary's home during the episode
after the beneficiary's discharge from an acute care hospital. The
``incident to'' rules are set forth in Sec. 410.26(b)(5), which
requires services and supplies furnished incident to the service of a
physician or other practitioner must be provided under the direct
supervision (as defined at Sec. 410.32(b)(3)(ii)) of a physician or
other practitioner.
In BPCI, the waiver is available only for services that are
furnished by licensed clinical staff under the general supervision (as
defined at Sec. 410.32(b)(3)(i)) of a physician (or other
practitioner), regardless of whether the individual is an employee,
leased employee, or independent contractor of the physician (or other
practitioner), or of the same entity that employs or contracts with the
physician (or other practitioner), and while the services may be
furnished by licensed clinical staff they must be billed by the
physician (or other practitioner) in accordance with CMS instructions
using a Healthcare Common Procedures Coding System (HCPCS) G-code
created by CMS specifically for the BPCI initiative. As discussed in
section III.B of this proposed rule, participants in the BPCI
initiative are permitted to select the duration of an episode as either
30 days, 60 days or 90 days. In the case of the incident to waiver
under BPCI, the waiver allows physician and nonphysician practitioners
to furnish the services not more than once in a 30-day episode, not
more than twice in a 60-day episode, and not more than three times in a
90-day episode. All other Medicare coverage and payment criteria must
be met.
For the CCJR model, we propose to waive the ``incident to'' rule
set forth in Sec. 410.26(b)(5), to allow a CCJR beneficiary who does
not qualify for home health services to receive post-discharge visits
in his or her home or place of residence any time during the episode.
The waiver would not apply for beneficiaries who would qualify for home
health services under the Medicare program, as set forth under Sec.
409.42. Therefore these visits could not be billed for such
beneficiaries. We propose to allow licensed clinicians, such as nurses,
either employed by a hospital or not, to furnish the service under the
general supervision of a physician, who may be either an employee or a
contractor of the hospital. We propose to allow services furnished
under such a waiver to be billed under the PFS by the physician or
nonphysician practitioner or by the hospital to which the supervising
physician has reassigned his or her benefits. In the latter scenario,
we note that the post-discharge home visit services would not be
``hospital services,'' even when furnished by clinical staff of the
hospital.
We propose that up to 9 post-discharge home visits could be billed
and paid during each 90-day post-anchor hospitalization CCJR episode.
Given the average PAC length of stay of approximately 45 days for these
episodes and the incentives under CCJR to improve efficiency, which may
shorten PAC stays, 9 visits would represent a home visit on average of
once per week for two-thirds of the 90-day episode duration, the period
of time when the typical beneficiary may have concluded PAC in an
efficient episode. We believe that a home visit of once a week to a
non-homebound beneficiary who has concluded PAC and who could also
receive services in the physician's office or hospital outpatient
department as needed, along with telehealth visits in the home from a
physician or NPP as proposed in the next section, should be sufficient
to allow comprehensive assessment and management of the beneficiary
throughout the LEJR episode. We propose that the service be billed with
HCPCS code GXXXX (Coordinated quality care--joint replacement model
home visit for patient assessment performed by a qualified health care
professional for an individual not considered homebound, including, but
not necessarily limited to patient assessment of clinical status,
safety/fall prevention, functional status/ambulation, medication
reconciliation/management, compliance with orders/plan of care,
performance of activities of daily living, and making beneficiary
connections to community and other services; (for use only in the
Medicare-approved coordinated quality care--joint replacement model);
may not be billed for a 30-day period covered by a transitional care
management code) and paid at approximately $50 under the PFS. The
standard PFS ratesetting methodologies establish relative value units
(RVUs) based on the resources required to furnish the typical service.
Final RVUs under the CY 2016 PFS for the proposed new HCPCS code for
CCJR home visits will be included in the CCJR final rule. In addition,
we propose to update the values each year to correspond to final values
established under the PFS.
The waiver would not apply with respect to a CCJR beneficiary who
has qualified, or would qualify, for home health services when the
visit was furnished. We expect that the visits by licensed clinicians
could include patient assessment, monitoring, assessment of functional
status and fall risk, review of medications, assessment of adherence
with treatment recommendations, patient education, communication and
coordination with other treating clinicians, care management to improve
beneficiary connections to community and other services, etc. These
post-discharge home visits would remove barriers to follow-up care
outside of the home with providers and suppliers and allow the
beneficiary to be treated in his or her home environment or place of
residence, where potential safety concerns, such as tripping hazards,
could quickly be identified and remediated. Given these occasions for
further patient assessment and intervention, we believe that where such
post-discharge home visits are furnished, there are opportunities to
increase patient-centered care coordination and decrease episode
spending, potentially resulting in higher quality care for
beneficiaries and increased episode efficiency which may benefit the
beneficiaries, the Medicare Trust Fund, and participant hospitals.
We also propose to waive current Medicare billing rules in order to
allow the separate reporting of these post-discharge home visits during
surgical global periods. The PFS payment for the surgical procedure
includes 90 days of post-operative care furnished by the surgeon. Post-
operative follow-up care is not separately billable by the surgeon or,
unless there is a transfer of care, by another practitioner. The
current construction of the global packages included in PFS payments
reflects a
[[Page 41270]]
narrow view of surgical follow-up care that does not encompass broader,
more comprehensive models of post-operative care, such as an episode
model like CCJR. As we have noted in the past, it is also difficult to
determine the appropriate valuation of the various components of the
current global packages (2015 Physician Fee Schedule 79 FR 67584). We
do not believe that the CCJR post-discharge home visits, which can
include nursing assessments for chronic conditions for which care may
be affected by the surgery, would replace or substantially duplicate
the kind of post-operative visits involved in furnishing post-operative
follow-up care for the global surgery procedure under the PFS. Instead,
we anticipate that the work of these post-discharge visits will be
similar to the work furnished by the physician coordinating the
patient's overall episode care. Therefore, we propose to waive the
global surgery billing rules to allow the surgeon or other
practitioners to furnish and bill for the post-discharge home visits
during surgical global periods.
We plan to monitor utilization patterns of post-discharge home
visits under CCJR to monitor for overutilization and significant
reductions in medical home health services. We seek comments on the
proposed waiver of the ``incident to'' rule to pay for a maximum number
of post-discharge home visits to beneficiaries who do not qualify for
home health services by licensed clinicians under the general
supervision of a physician.
c. Billing and Payment for Telehealth Services
As discussed in the previous section, we expect that the CCJR model
design features will lead to greater interest on the part of hospitals
and other providers and suppliers caring for CCJR beneficiaries in
furnishing services to beneficiaries in their home or place of
residence, including physicians' professional services. While
physicians may furnish and be paid by Medicare for home visits under
the PFS, few visits are actually furnished to Medicare beneficiaries
because of the significant physician resources required for such visits
and the general structure of most physician office-based practices. For
example, in 2014 only 2.6 million physician or nonphysician
practitioner home visits were furnished to Medicare beneficiaries in
contrast to almost 250 million office or other outpatient evaluation
and management visits furnished by physicians or nonphysician
practitioners. CCJR would create new incentives for comprehensive
episode care management for beneficiaries, including early
identification and intervention regarding changes in health status
following discharge from the anchor hospitalization. We understand that
participant hospitals may want to engage physicians in furnishing
timely visits to homebound or non-homebound CCJR beneficiaries in their
homes or places of residence to address concerning symptoms or
observations raised by beneficiaries themselves, clinicians furnishing
home health services, or licensed clinicians furnishing post-discharge
home visits, while physicians committed to LEJR care redesign may not
be able to revise their practice patterns to meet this home visit need
for CCJR beneficiaries.
Under section 1834(m) of the Act, Medicare pays for telehealth
services furnished by a physician or practitioner under certain
conditions even though the physician or practitioner is not in the same
location as the beneficiary. The telehealth services must be furnished
to a beneficiary located in one of the eight types of originating sites
specified in section 1834(m)(4)(C)(ii) of the Act and the site must
satisfy at least one of the requirements of section 1834(m)(4)(C)(i)(I)
through (III) of the Act. Generally, for Medicare payment to be made
for telehealth services under the Physician Fee Schedule several
conditions must be met, as set forth under Sec. 410.78(b).
Specifically, the service must be on the Medicare list of telehealth
services and meet all of the following other requirements for payment:
The service must be furnished via an interactive
telecommunications system.
The service must be furnished to an eligible telehealth
individual.
The individual receiving the services must be in an
eligible originating site.
When all of these conditions are met, Medicare pays a facility fee
to the originating site and provides separate payment to the distant
site practitioner for the service. Section 1834(m)(4)(F)(i) of the Act
defines Medicare telehealth services to include professional
consultations, office visits, office psychiatry services, and any
additional service specified by the Secretary, when furnished via a
telecommunications system. For the list of approved Medicare telehealth
services, see the CMS Web site at www.cms.gov/Medicare/Medicare-General-information/telehealth/. Under section 1834(m)(4)(F)(ii) of the
Act, CMS has an annual process to consider additions to and deletions
from the list of telehealth services. We do not include any services as
telehealth services when Medicare does not otherwise make a separate
payment for them.
Some literature suggests that technologies that enable health care
providers to deliver care to patients in locations remote from
providers are being increasingly used to complement face-to-face
patient-provider encounters in both urban and rural areas.\43\ In these
cases, the use of remote access technologies may improve the
accessibility and timeliness of needed care, increase communication
between providers and patients, enhance care coordination, and improve
the efficiency of care. We note that certain professional services that
are commonly furnished remotely using telecommunications technology are
paid under the same conditions as in-person physicians' services, and
thus do not require a waiver to be considered as telehealth services.
Such services that do not require the patient to be present in person
with the practitioner when they are furnished are covered and paid in
the same way as services delivered without the use of
telecommunications technology when the practitioner is in person at the
medical facility furnishing care to the patient.
In other CMS episode payment models, such as BPCI Models 2 and 3,
we determined it was necessary to waive the geographic site
requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act.
This waiver allows telehealth services to be furnished to eligible
telehealth individuals when they are located at one of the eight
originating sites at the time the service is furnished via a
telecommunications system but without regard to the site meeting one of
the geographic site requirements. For CCJR, we propose a waiver of this
same provision as well as waiver of the requirement that the eligible
telehealth individual be in an originating site when the otherwise
eligible individual is receiving telehealth services in his or her home
or place of residence. This waiver would allow providers and suppliers
furnishing services to CCJR beneficiaries to utilize telemedicine for
beneficiaries that are not classified as rural and to allow the
greatest degree of efficiency and communication between providers and
suppliers and beneficiaries by allowing beneficiaries to receive
telehealth services at their home or place of residence. We believe
that these waivers are essential to maximize the opportunity to improve
the quality of care and efficiency for LEJR episodes under CCJR.
[[Page 41271]]
Specifically, like the telehealth waiver for BPCI, we propose to
waive the geographic site requirements of section 1834(m)(4)(C)(i)(I)
through (III) of the Act that limit telehealth payment to services
furnished within specific types of geographic areas or in an entity
participating in a federal telemedicine demonstration project approved
as of December 31, 2000. Waiver of this requirement would allow
beneficiaries located in any region to receive services related to the
episode to be furnished via telehealth, as long as all other Medicare
requirements for telehealth services are met. Any service on the list
of Medicare approved telehealth services and reported on a claim with
an ICD-9 principal diagnosis code that is not excluded from the
proposed CCJR episode definition (see section III.B.2 of this proposed
rule) could be furnished to a CCJR beneficiary, regardless of the
beneficiary's geographic location. Under CCJR, this waiver would
support care coordination and increasing timely access to high quality
care for all CCJR beneficiaries, regardless of geography. Additionally,
we propose, only for the purpose of testing the CCJR model, waiving the
originating site requirements of section 1834(m)(4)(C)(ii)(I)-(VIII) of
the Act that specify the particular sites at which the eligible
telehealth individual must be located at the time the service is
furnished via a telecommunications system. Specifically, we propose to
waive the requirement only when telehealth services are being furnished
in the CCJR' beneficiary's home or place of residence during the
episode. Any service on the list of Medicare approved telehealth
services and reported on a claim with an ICD-9 principal diagnosis code
that is not excluded from the proposed CCJR episode definition (see
section III.B.2 of this proposed rule) could be furnished to a CCJR
beneficiary in his or her home or place of residence, unless the
service's HCPCS code descriptor precludes delivering the service in the
home or place of residence. For example, subsequent hospital care
services could not be furnished to beneficiaries in their home since
those beneficiaries would not be inpatients of the hospital.
The existing set of codes used to report evaluation and management
(E/M) visits are extensively categorized and defined by the setting of
the service, and the codes describe the services furnished when both
the patient and the practitioner are located in that setting. Section
1834(m) of the Act provides for particular conditions under which
Medicare can make payment for office visits when a patient is located
in a health care setting (the originating sites authorized by statute)
and the eligible practitioner is located elsewhere. However we do not
believe that the kinds of E/M services furnished to patients outside of
health care settings via real-time, interactive communication
technology are accurately described by any existing E/M codes. This
would include circumstances when the patient is located in his or her
home and the location of the practitioner is unspecified. Therefore, in
order to create a mechanism to report E/M services accurately under the
CCJR model, we propose to create a specific set of HCPCS G-codes to
describe the E/M services furnished to CCJR beneficiaries in their
homes via telehealth.
Among the existing E/M visit services, we envision these services
would be most similar to those described by the office and other
outpatient E/M codes. Therefore, we propose to structure the new codes
similarly to the office/outpatient E/M codes but adjusted to reflect
the location as the beneficiary's residence and the virtual presence of
the practitioner. Specifically, we propose to create a parallel
structure and set of descriptors currently used to report office or
other outpatient E/M services, (CPT codes 99201 through 99205 for new
patient visits and CPT codes 99212 through 99215 for established
patient visits.) For example, the proposed G-code for a level 3 E/M
visit for an established patient would be a telehealth visit for the
evaluation and management of an established patient in the patient's
home, which requires at least 2 of the following 3 key components:
An expanded problem focused history;
An expanded problem focused examination;
Medical decision making of low complexity.
Counseling and coordination of care with other physicians, other
qualified health care professionals or agencies are provided consistent
with the nature of the problem(s) and the patient's or family's needs
or both. Usually, the presenting problem(s) are of low to moderate
severity. Typically, 15 minutes are spent with the patient or family or
both via real-time, audio and video intercommunications technology.
We note that we are not proposing a G-code to parallel the level 1
office/outpatient visit for an established patient, since that service
does not require the presence of the physician or other qualified
health professional. We also believe this would duplicate the home
visits for non-homebound beneficiaries previously proposed in this
section.
We propose to develop payment rates for these new telehealth G-
codes for E/M services in the patient's home that are similar to the
payment rates for the office/outpatient E/M services, since the codes
will describe the work involved in furnishing similar services.
Therefore, we propose to include the resource costs typically incurred
when services are furnished via telehealth. In terms of the relative
resource costs involved in furnishing these services, we believe that
the efficiencies of virtual presentation generally limit resource costs
other than those related to the professional time, intensity, and
malpractice risk to marginal levels. Therefore, we propose to adopt
work and malpractice (MP) RVUs associated with the corresponding level
of office/outpatient codes as the typical service because the
practitioner's time and intensity and malpractice liabilities when
conducting a visit via telehealth are comparable to the office visit.
Final RVUs under the CY 2016 PFS will be included in the CCJR final
rule. Additionally, we propose to update these values each year to
correspond to final values established under the PFS. We considered
whether each level of visit typically would warrant support by
auxiliary licensed clinical staff within the context of the CCJR model.
The cost of such staff and any associated supplies, for example, would
be incorporated in the practice expense (PE) RVUs under the PFS. For
the lower level visits, levels 1 through 3 for new and 2 and 3 for
established visits, we did not believe that the visit would necessarily
require auxiliary medical staff to be available in the patient's home.
We anticipate these lower level visits would be the most commonly
furnished and would serve as a mechanism for the patient to consult
quickly with a practitioner for concerns that can be easily described
and explained by the patient. We do not propose to include PE RVUs for
these services, since we do not believe that virtual visits envisioned
for this model typically incur the kinds of costs included in the PE
RVUs under the PFS. For higher level visits, we typically would
anticipate some amount of support from auxiliary clinical staff. For
example, wound examination and minor wound debridement would be
considered included in an E/M visit and would require licensed clinical
staff to be present in the beneficiary's home during the telehealth
visit in order for
[[Page 41272]]
the complete service to be furnished. We believe it would be rare for a
practitioner to conduct as complex and detailed a service as a level 4
or 5 E/M home visit via telehealth for CCJR beneficiaries in LEJR
episodes without licensed clinical staff support in the home.
However, we also note that this proposed model already includes
several avenues for licensed clinical staff to be in the patient's
home, either through a separately paid home visit as proposed for the
model or through home health services as discussed earlier in this
section of this proposed rule. Therefore, although we consider support
by auxiliary clinical staff to be typical for level 4 or 5 E/M visits
furnished to CCJR beneficiaries in the home via telehealth, we do not
propose to incorporate these costs through PE RVUs. Given the
anticipated complexity of these visits, we would expect to observe
level 4 and 5 E/M visits to be reported on the same claim with the same
date of service as a home visit or during a period of authorized home
health care. If neither of these occurs, we propose to require the
physician to document in the medical record that auxiliary licensed
clinical staff were available on site in the patient's home during the
visit and if they were not, to document the reason that such a high-
level visit would not require such personnel.
We note that because the services described by the proposed G-
codes, by definition, are furnished remotely using telecommunications
technology, they therefore are paid under the same conditions as in-
person physicians' services and they do not require a waiver to the
requirements of section 1834(m) of the Act. We also note that because
these home telehealth services are E/M services, all other coverage and
payment rules regarding E/M services would continue to apply.
Under CCJR, this proposal to waive the originating site
requirements and create new home visit telehealth HCPCS codes would
support the greatest efficiency and timely communication between
providers and beneficiaries by allowing beneficiaries to receive
telehealth services at their places of residence.
With respect to home health services paid under the home health
prospective payment system (HH PPS), we emphasize that telehealth
visits under this model cannot substitute for in-person home health
visits per section 1895(e)(1)(A) of the Act. Furthermore, telehealth
services by social workers cannot be furnished for CCJR beneficiaries
who are in a home health episode of care because medical social
services are included as home health services per section 1861(m) of
the Act and paid for under the Medicare HH PPS. However, telehealth
services permitted under section 1834 of the Act and furnished by
physicians or other practitioners, specifically physician assistants,
nurse practitioners, clinical nurse specialists, certified nurse
midwives, nurse anesthetists, psychologists, and dieticians, can be
furnished for CCJR beneficiaries who are in a home health episode of
care. Finally, sections 1835(a) and 1814(a) of the Act require that the
patient has a face-to-face encounter with the certifying physician or
an allowed nonphysician practitioner (NPP) working in collaboration
with or under the supervision of the certifying physician before the
certifying physician certifies that the patient is eligible for home
health services. Under Sec. 424.22(a)(1)(v), the face-to-face
encounter can be performed up to 90 days prior to the start of home
health care or within 30 days after the start of home health care.
Section 424.22(a)(1)(v)(A) also allows a physician, with privileges,
who cared for the patient in an acute or PAC setting (from which the
patient was directly admitted to home health) or an allowed NPP working
in collaboration with or under the supervision of the acute or PAC
physician to conduct the face-to-face encounter.
Although sections 1835(a) and 1814(a) of the Act allow the face-to-
face encounter to be performed via telehealth, we are not proposing
that the waiver of the telehealth geographic site requirement for
telehealth services and the the originating site requirement for
telehealth services furnished in the CCJR beneficiary's home or place
of residence would apply to the face-to-face encounter required as part
of the home health certification when that encounter is furnished via
telehealth. In other words, when a face-to-face encounter furnished via
telehealth is used to meet the requirement for home health
certification, the usual Medicare telehealth rules apply with respect
to geography and eligibility of the originating site. We expect that
this policy will not limit CCJR beneficiaries' access to medically
necessary home health services because beneficiaries receiving home
health services during a CCJR episode will have had a face-to-face
encounter with either the physician or an allowed NPP during their
anchor hospitalization or a physician or allowed NPP during a post-
acute facility stay prior to discharge directly to home health
services.
Under the proposed waiver of the geographic site requirement and
originating site requirement, all telehealth services would be required
to be furnished in accordance with all Medicare coverage and payment
criteria, and no additional payment would be made to cover set-up
costs, technology purchases, training and education, or other related
costs. The facility fee paid by Medicare to an originating site for a
telehealth service would be waived if there is no facility as an
originating site (that is, the service was originated in the
beneficiary's home). Finally, providers and suppliers furnishing a
telehealth service to a CCJR beneficiary in his or her home or place of
residence during the episode would not be permitted to bill for
telehealth services that were not fully furnished when an inability to
provide the intended telehealth service is due to technical issues with
telecommunications equipment required for that service. Beneficiaries
would be able to receive services furnished pursuant to the telehealth
waivers only during the CCJR LEJR episode.
We plan to monitor patterns of utilization of telehealth services
under CCJR to monitor for overutilization or reductions in medically
necessary care, and significant reductions in face-to-face visits with
physicians and NPPs. We plan to specifically monitor the distribution
of new telehealth home visits that we are proposing, as we anticipate
greater use of lower level visits. Given our concern that auxiliary
licensed clinical staff be present for level 4 and 5 visits, we will
monitor our proposed requirement that these visits be billed on the
same claim with the same date of service as a home nursing visit,
during a period authorized home health care, or that the physician
document the presence of auxiliary licensed clinical staff in the home
or an explanation as to the specific circumstances precluding the need
for auxiliary staff for the specific visit. We seek comments on the
proposed waivers with respect to telehealth services, and the proposed
creation of the home visit telehealth codes.
d. SNF 3-Day Rule
We expect that the CCJR model will encourage participant hospitals
and their provider and supplier partners to redesign care for LEJR
episodes across the continuum of care extending to 90 days post-
discharge from the anchor hospital stay. We believe that hospitals will
seek to develop and refine the most efficient care pathways so
beneficiaries
[[Page 41273]]
receive the lowest intensity, clinically appropriate care at each point
in time throughout the episode. We understand that in some cases,
particularly younger beneficiaries undergoing total knee replacement,
certain beneficiaries receiving LEJR procedures may be appropriately
discharged from the acute care hospital to a SNF in less than the 3
days required under the Medicare program for coverage of the SNF stay.
While total knee arthroplasty (TKA) remains payable by Medicare to the
hospital only when furnished to hospital inpatients, we have heard from
some stakeholders that these procedures may be safely furnished to
hospital outpatients with a hospital outpatient department stay of only
24 hours. Finally, we note that the current geometric mean hospital
length of stay for LEJR procedures for beneficiaries without major
complications or comorbidities (MS-DRG 470) is only 3 days and that for
MS-DRG 469 for beneficiaries with such complications or comorbidities
is 6 days. Thus, we believe it is possible that hospitals working to
increase episode efficiency may identify some CCJR beneficiaries who
could be appropriately discharged from the hospital to a SNF in less
than 3 days, but that early discharge would eliminate Medicare coverage
for the SNF stay unless a waiver of Medicare requirements were provided
under CCJR.
The Medicare SNF benefit is for beneficiaries who require a short-
term intensive stay in a SNF, requiring skilled nursing or skilled
rehabilitation care or both. Pursuant to section 1861(i) of the Act,
beneficiaries must have a prior inpatient hospital stay of no fewer
than 3-consecutive days in order to be eligible for Medicare coverage
of inpatient SNF care. We refer to this as the SNF 3-day rule. We note
that the SNF 3-day rule has been waived or is not a requirement for
Medicare SNF coverage under other CMS models or programs, including
BPCI Model 2. BPCI Model 2 awardees that request and are approved for
the waiver can discharge Model 2 beneficiaries in less than 3 days from
an anchor hospital stay to a SNF, where services are covered under
Medicare Part A as long as all other coverage requirements for such
services are satisfied.
Currently, FFS Medicare beneficiary discharge patterns to a SNF
immediately following hospitalization for an LEJR procedure vary
regionally across the country, from a low of approximately 10 percent
of Medicare beneficiaries to a high of approximately 85 percent.\44\
Additionally, a study of Medicare beneficiaries has shown that over the
period of time between 1991 and 2008, as the inpatient hospital length-
of-stay for total hip arthroplasty (THA) decreased from an average of
9.1 days to an average of 3.7 days, the average percentage of primary
THA patients discharged directly to home declined from 68 percent to 48
percent while the proportion discharged directly to skilled care
(primarily SNFs) increased from 17.8 percent to 34.3 percent.\45\
During this same period of time, 30-day all-cause readmission increased
from 5.8 percent to 8.5 percent. Similar to the CCJR payment policies
we propose in section III.C of this proposed rule, which would require
participating CCJR hospitals to repay Medicare for excess episode
spending beginning in performance year 2, participants in BPCI Model 2
assume financial responsibility for episode spending for beneficiaries
included in a Model 2 episode. Episode payment models like BPCI and
CCJR have the potential to mitigate the existing incentives under the
Medicare program to overuse SNF benefits for beneficiaries, as well as
to furnish many fragmented services that do not reflect significant
coordinated attention to and management of complications following
hospital discharge. The removal of these incentives in an episode
payment model lays the groundwork for offering participant hospitals
greater flexibility around the parameters that determine SNF stay
coverage. BPCI participants considering the early discharge of a
beneficiary pursuant to the waiver during a Model 2 episode must
evaluate whether early discharge to a SNF is clinically appropriate and
SNF services are medically necessary. Next, they must balance that
determination and the potential benefits to the hospital in the form of
internal cost savings due to greater financial efficiency with the
understanding that a subsequent hospital readmission, attributable to
premature discharge or low quality SNF care, could substantially
increase episode spending while also resulting in poorer quality of
care for the beneficiary. Furthermore, early hospital discharge for a
beneficiary who would otherwise not require a SNF stay (that is, the
beneficiary has no identified skilled nursing or rehabilitation need
that cannot be provided on an outpatient basis) following a hospital
stay of typical length does not improve episode efficiency under an
episode payment model such as BPCI or CCJR.
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\44\ ``Analysis of Medicare claims with admission dates from
July 1, 2013 through June 30, 2014 accessed through the Chronic
Conditions Warehouse.''
\45\ Cram P, Lu X, Kaboli PJ, et al. Clinical Characteristics
and Outcomes of Medicare Patients Undergoing Total Hip Arthroplasty,
1991-2008. JAMA. 2011;305(15):1560-1567.
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Because of the potential benefits we see for participating CCJR
hospitals, their provider partners, and beneficiaries, we propose to
waive in certain instances the SNF 3-day rule for coverage of a SNF
stay following the anchor hospitalization under CCJR beginning in
performance year 2 of the model when repayment responsibility for
actual episode spending that exceeds the target price begins. We
propose to use our authority under section 1115A of the Act with
respect to certain SNFs that furnish Medicare Part A post-hospital
extended care services to beneficiaries included in an episode in the
CCJR model. We believe this waiver is necessary to the model test so
that participant hospitals can redesign care throughout the episode
continuum of care extending to 90 days post-discharge from the anchor
hospital stay in order to maximize quality and hospital financial
efficiency, as well as reduce episode spending under Medicare. However,
we are not proposing to waive this requirement in performance year 1,
when participating hospitals are not responsible for excess actual
episode spending. We believe that there is some potential for early
hospital discharge followed by a SNF stay to increase actual episode
spending over historical patterns unless participant hospitals are
particularly mindful of this potential unintended consequence. Without
participant hospital repayment responsibility in performance year 1, we
are concerned that Medicare would be at full risk under the model for
increased episode spending because, without a financial incentive to
closely manage care, hospitals might be more likely to discharge
beneficiaries to SNFs early leading to increased episode spending for
which the hospital would bear no responsibility. Beginning in
performance year 2 and continuing through performance year 5, we
propose to waive the SNF 3-day rule because participant hospitals will
bear partial or full responsibility (capped at the proposed stop-loss
limit described in section III.C. of this proposed rule) for excess
episode actual spending, thereby providing a strong incentive in those
years for participant hospitals to redesign care with both quality and
efficiency outcomes as priorities. All other Medicare rules for
coverage and payment of Part A-covered SNF services would continue to
apply to CCJR
[[Page 41274]]
beneficiaries in all performance years of the model.
In addition, because the average length of stay for Medicare
beneficiaries hospitalized for LEJR procedures without major
complications or comorbidities is already relatively short at 3 days
and in view of our concerns over protecting immediate CCJR beneficiary
safety and optimizing health outcomes, we propose to require that
participant hospitals may only discharge a CCJR beneficiary under this
proposed waiver of the SNF 3-day rule to a SNF rated an overall of
three stars or better by CMS based on information publicly available at
the time of hospital discharge. Problem areas due to early hospital
discharge may not be discovered through model monitoring and evaluation
activities until well after the episode has concluded, and the
potential for later negative findings alone may not afford sufficient
beneficiary protections. CMS created a Five-Star Quality Rating System
for SNFs to allow SNFs to be compared more easily and to help identify
areas of concerning SNF performance. The Nursing Home Compare Web site
(www.medicare.gov/NursingHomeCompare/) gives each SNF an overall rating
of between 1 and 5 stars. Skilled nursing facilities with 5 stars are
considered to have much above average quality, and SNFs with one star
are considered to have quality much below average. Published SNF
ratings include distinct ratings of health inspection, staffing, and
quality measures, with ratings for each of the three sources combined
to calculate an overall rating. These areas of assessment are all
relevant to the quality of SNF care following discharge from the anchor
hospitalization initiating a CCJR episode, especially if that discharge
occurs after less than three days in the hospital. A study of the
clinical factors that kept patients in a Danish hospital unit dedicated
to discharge in three days or fewer following total hip and knee
arthroscopy procedures found that that pain, dizziness, and general
weakness were the main clinical reasons for longer hospitalization, as
well as problems with personal care and walking 70 meters with
crutches.\46\ Medicare beneficiaries discharged from the hospital to a
SNF in less than three days may be at higher risk of these
uncomfortable symptoms and disabling functional problems not being
fully resolved at hospital discharge, although we expect that under the
CCJR episode payment model participant hospitals will have a strong
interest in ensuring appropriate discharge timing so that hospital
readmissions and complications are minimized. Nevertheless, because of
the potential greater risks following early inpatient hospital
discharge, we believe it is appropriate that all CCJR beneficiaries
discharged from the participant hospital to a SNF in less than 3 days
be admitted to a SNF that has demonstrated that it is capable of
providing quality care to patients with significant unresolved post-
surgical symptoms and problems. We believe such a SNF would need to
provide care of at least average overall quality, which would be
represented by an overall SNF 3-star or better rating.
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\46\ Husted H, Lunn TH, Troelsen A, Gaarm-Larsen L, Kristensen
BB, Kehlet H. Why still in hospital after fast-track hip and knee
arthroplasty? Acta Orthopaedica. 2011; 82(6)679-684.
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We propose that the waiver be available for the CCJR beneficiary's
care. The SNF would insert a Treatment Authorization Code on the claim
for a beneficiary in the model where the SNF seeks to the use the
waiver. This process would promote coordination between the SNF and the
participant hospital, as the SNF would need to be in close
communication with the participant hospital to ensure that the
beneficiary is in the model at the time the waiver is used. We propose
that where the beneficiary would be eligible for inclusion in a CCJR
episode of care at the time of hospital discharge, use of the waiver
would be permitted where it is medically necessary and appropriate to
discharge the beneficiary to a SNF prior to a 3-day inpatient stay.
Beneficiaries would be eligible to receive services furnished under
the 3-Day Rule waiver only during the CCJR episode. We plan to monitor
patterns of SNF utilization under CCJR, particularly with respect to
hospital discharge in less than 3 days to a SNF, to ensure that
beneficiaries are not being discharged prematurely to SNFs and that
they are able to exercise their freedom of choice without patient
steering. We seek comment on our proposal to waive the SNF 3-day stay
rule for stays in SNFs rated overall as three stars or better following
discharge from the anchor hospitalization in CCJR episodes.
e. Waivers of Medicare Program Rules To Allow Reconciliation Payment or
Repayment Actions Resulting From the Net Payment Reconciliation Amount
In order to make reconciliation payment to or carry out recoupment
from a participant hospital that results from the NPRA calculation for
each performance year as discussed in section III.C.6.a. of this
proposed rule, we believe we would need to waive certain Medicare
program rules. Therefore, in accordance with the authority granted to
the Secretary in section 1115A(d)(1) of the Act, we would waive
requirements of the Act for all Medicare Part A and Part B payment
systems only to the extent necessary to make reconciliation payments or
receive repayments based on the NPRA that reflect the episode payment
methodology under this proposed payment model for CCJR participant
hospitals selected in accordance with CMS's proposed selection
methodology. In addition, we do not propose that reconciliation
payments or repayments change beneficiary cost-sharing from the regular
Medicare program cost-sharing for the related Part A and Part B
services that were paid for CCJR beneficiaries and aggregated to
determine actual episode spending in the calculation of the NPRA. We
therefore would waive the requirements of sections 1813 and 1833(a) of
the Act to the extent that they would otherwise apply to reconciliation
payments or repayments from a participant hospital under the CCJR
model. We seek comment on our proposed waivers related to repayment and
recoupment actions as a result of the NRPA calculated.
12. Proposed Enforcement Mechanisms
CMS must have certain mechanisms to enforce compliance with the
requirements of the model, either by the participant hospital, or by an
entity or individual participating in the CCJR model by furnishing a
service to a beneficiary during a CCJR episode. The following
discussion details the enforcement mechanisms we propose to make
available to CMS for the CCJR model.
We propose an enforcement structure that would be consistent with
other CMMI models. We believe that Model 2 of the BPCI initiative is an
appropriate model for comparison, given that Model 2 and CCJR share
many of the same policy characteristics, particularly with respect to
episode definition. For example, the participation agreement between
CMS and a participant (called an Awardee) in BPCI Model 2 provides that
CMS may immediately or with advance notice terminate the awardee's
participation in the model or require the Awardee to terminate its
agreement (``participant agreement'') with a participating provider or
supplier that is not in compliance with BPCI requirements. In such
circumstances, CMS may direct the Awardee to terminate its participant
agreement with a participating provider or supplier because the Awardee
has a participation agreement with CMS, whereas the participating
provider or supplier does
[[Page 41275]]
not. CMS may require termination of the Awardee or a participating
provider or supplier if--
CMS determines that it no longer has the funds to support
the BPCI model;
CMS terminates the model pursuant to section
1115A(b)(3)(B) of the Act; or
The BPCI awardee or an individual or entity participating
in BPCI under the awardee does any of the following:
++ Takes any action that threatens the health or safety of
patients; avoids at-risk Medicare beneficiaries, as this term is
defined in Sec. 425.20; or avoids patients on the basis of payer
status.
++ Is subject to sanctions or final actions of an accrediting
organization or federal, state or local government agency that could
lead to the inability to comply with the requirements and provisions of
the BPCI agreement.
++ Takes or fails to take any action that CMS determines for
program integrity reasons is not in the best interests of the BPCI
initiative.
++ Is subject to action by HHS (including OIG and CMS) or the
Department of Justice to redress an allegation of fraud or significant
misconduct, including intervening in a False Claims Act qui tam matter,
issuing a pre-demand or demand letter under a civil sanction authority,
or similar actions.
Under the terms of the BPCI agreement, upon CMS's termination of
the agreement for any of the reasons previously listed in this section,
CMS may immediately cease the distribution of positive reconciliation
payments to the awardee and the awardee must immediately cease the
distribution of any gainsharing payments.
Many CMMI models also allow for CMS to impose remedial actions to
address noncompliance by either a participant that has a direct
relationship (participation agreement) with CMS, or by any individual
or entity participating in the CMMI model pursuant to an agreement with
the participant hospital. For example, with respect to the BPCI Model
2, where CMS determines that there may be noncompliance, CMS may take
any or all of the following actions:
Notify the BPCI awardee of the specific performance
problem.
Require the awardee to provide additional data to CMS or
its designees.
Require the awardee to stop distributing funds to a
particular individual or entity.
Require the awardee to forego the receipt of any positive
reconciliation payments from CMS.
Request a corrective action plan from the awardee.
++ If CMS requests a corrective action plan, then the following
requirements apply to awardees in the BPCI initiative:
-- The awardee must submit a corrective action plan for CMS approval by
the deadline established by CMS.
-- The corrective action plan must address what actions the awardee
will take within a specified time period to ensure that all
deficiencies are corrected and that it remains in compliance with the
BPCI agreement.
Under the CCJR model, we propose that CMS would have the
enforcement mechanisms detailed in this section available for use
against participant hospitals and any entity or individual furnishing a
service to a beneficiary during a CCJR episode, where the participant
hospital or such entity or individual: (1) Does not comply with the
CCJR model requirements; or (2) are identified as noncompliant via CMS'
monitoring of the model or engage in behavior related to any of the
reasons previously described that apply to the BPCI initiative. These
mechanisms will support the goals of CCJR to maintain or improve
quality of care. Given that participant hospitals may receive
reconciliation payments, and choose to distribute or share those
payments with other providers or suppliers (``CCJR collaborators'') we
believe that enhanced scrutiny and monitoring of participant hospitals
and CCJR collaborators under the model is necessary and appropriate.
Participant hospitals and CCJR collaborators will also be subject to
all existing requirements and conditions for Medicare participation not
otherwise waived under section 1115A(d)(1) of the Act.
We propose that CMS would have the option to use any one or more of
the following enforcement mechanisms for participant hospitals in CCJR.
We further propose that these enforcement mechanisms could be
instituted and applied in any order, as is consistent with other CMMI
models:
Warning letter--We propose to give CMS the authority to
issue a warning letter to participant hospitals to put them on notice
of behavior that may warrant additional action by CMS. This letter
would inform participant hospitals of the issue or issues identified by
CMS leading to the issuance of the warning letter.
Corrective Action Plan--We propose to give CMS the
authority to request a corrective action plan from participant
hospitals. We propose the following requirements for corrective action
plans:
++ The participant hospital would be required to submit a
corrective action plan for CMS approval by the deadline established by
CMS.
++ The corrective action plan would be required to address what
actions the participant hospital will take within a specified time
period to correct the issues identified by CMS.
++ The corrective action plan could include provisions requiring
that the participant hospital terminate Participation Agreements with
CCJR collaborators that are determined by HHS to be engaging in
activities involving noncompliance with the provisions of this proposed
rule, engaged in fraud or abuse, providing substandard care, or
experiencing other integrity problems.
++ The participant hospital's failure to comply with the corrective
action plan within the specified time period could result in additional
enforcement action, including: (1) Termination; (2) automatic
forfeiture of all or a portion of any reconciliation payments as that
term is defined in section III.C. of this proposed rule; (3) CMS's
discretionary reduction or elimination of all or a portion of the
hospital's reconciliation payment; or (4) a combination of such
actions.
Reduction or elimination of reconciliation amount--We
propose to give CMS the authority to reduce or eliminate a participant
hospital's reconciliation amount based on noncompliance with the
model's requirements, negative results found through CMS' monitoring
activities, or the participant hospital's noncompliance associated with
a corrective action plan (as noted previously). For example, where CMS
requires a participant hospital to submit a corrective action plan, the
result of the participant hospital's failure to timely comply with that
requirement could be a 50 percent reduction in the reconciliation
amount due to the participant hospital at the end a performance year,
where the participant hospital's reconciliation report reflects a
positive reconciliation amount. We solicit comments on whether negative
monitoring results and noncompliance with program requirements or
corrective action plans should result in automatic forfeiture of all or
a portion of positive NPRA, the amount that could be forfeited or
reduced, the number of performance periods over which NPRA may be
forfeited or reduced per instance or episode of noncompliance, whether
the amount should be a fixed percentage of NPRA or a variable amount
depending on the nature and severity of the noncompliance, and the
criteria
[[Page 41276]]
CMS should use in deciding the severity of noncompliance.
Where the participant hospital's reconciliation report reflects a
repayment amount, forfeiture of a reconciliation amount would not be an
option for that performance year. In such a case, we considered whether
CMS would require the participant hospital to forfeit a certain
percentage of a reconciliation amount in the reconciliation report for
a future performance year. However, in the case of a failure to comply
with the model's requirements, presence of negative results found
through CMS's monitoring activities, or noncompliance associated with a
corrective action plan, we believe a policy that would increase the
amount of repayment amount on the reconciliation report for the
performance year in which the noncompliance occurred by the participant
hospital is more likely to result in compliance from the hospital.
Therefore, we propose to add 25 percent to a repayment amount on a
reconciliation report, where the participant hospital fails to timely
comply with a corrective action plan or is noncompliant with the
model's requirements, We seek comments on this forfeiture policy,
including the percentage to be added to a repayment amount on a
reconciliation report; the number of performance periods over which a
reconciliation amount may be forfeited or reduced per instance or
episode of noncompliance; whether the amount should be a fixed
percentage of a reconciliation amount or repayment amount, as
applicable, or a variable amount depending on the nature and severity
of the noncompliance; and the criteria CMS should use in deciding the
severity of noncompliance.
Termination from the model--Given the provisions we have
proposed outlining the participation of hospitals in the model, we
believe that, in contrast to other CMS models, termination from the
CCJR model would contradict the model's design. As a result, in some
circumstances termination from the model may be unlikely to be a
sufficient mechanism to deter noncompliance by participant hospitals.
While we believe termination is a remedy unlikely to be frequently used
by CMS in this model, we nonetheless leave open the possibility that in
extremely serious circumstances termination might be appropriate, and
for that reason, we propose to include it as an available enforcement
option. Where a participant hospital is terminated from the CCJR model,
we propose that the hospital would remain liable for all negative NPRA
generated from episodes of care that occurred prior to termination. We
propose that CMS may terminate the participation in CCJR of a
participant hospital when the participant hospital, or a CCJR
collaborator that has a Participation Agreement with a participant
hospital and performs functions or services related to CCJR activities,
fails to comply with any of the requirements of the CCJR model. We
further propose that CMS could terminate the participant hospital's
participation in the model, or require a participant hospital to
terminate a Participation Agreement with a CCJR collaborator for
reasons including, but not limited to the following:
CMS determines that it no longer has the funds to support
the CCJR model.
CMS terminates the model pursuant to section
1115A(b)(3)(B) of the Act.
The CCJR participant hospital, or an individual or entity
participating in CCJR under the participant hospital does any of the
following:
++ Takes any action that threatens the health or safety of
patients; avoids at-risk Medicare beneficiaries, as this term is
defined in Sec. 425.20; or avoids patients on the basis of payor
status.
++ Is subject to sanctions or final actions of an accrediting
organization or federal, state or local government agency that could
lead to the inability to comply with the requirements and provisions of
this proposed rule.
++ Takes or fails to take any action that CMS determines for
program integrity reasons is not in the best interests of the CCJR
model.
++ Is subject to action by HHS (including OIG and CMS) or the
Department of Justice to redress an allegation of fraud or significant
misconduct, including intervening in a False Claims Act qui tam matter,
issuing a pre-demand or demand letter under a civil sanction authority,
or similar actions.
++ Is subject to action involving violations of the physician self-
referral prohibition, civil monetary penalties law, federal anti-
kickback statute, antitrust laws, or any other applicable Medicare
laws, rules, or regulations that are relevant to the CCJR model
Other Enforcement Mechanisms--We seek to incorporate
policies regarding enforcement mechanisms that are necessary and
appropriate to test the CCJR model. Thus, we seek public comment on
additional enforcement mechanisms that would contribute to the
following goals:
++ Allow CMS to better operate or monitor the model.
++ Appropriately engage and encourage all entities and individuals
furnishing a service to a beneficiary during a CCJR episode to comply
with the requirements and provisions of the CCJR model.
++ Preserve the rights of Medicare beneficiaries to receive
medically necessary care, to not be endangered by providers and
suppliers engaging in noncompliant activities, and to be able to choose
from whom they want to receive care.
We seek public comment on these proposals and invite commenters to
propose additional safeguards we should consider in this proposed rule.
D. Quality Measures and Display of Quality Metrics Used in the CCJR
Model
1. Background
a. Purpose of Quality Measures in the CCJR Model
The priorities of the National Quality Strategy \47\ include making
care safer and more affordable, promoting effective communication and
coordination as well as engaging patients and families in their care.
We believe quality measures that encourage providers to focus on the
National Quality Strategy priorities will ultimately improve quality of
care and cost efficiencies. As described earlier in section III.C.5 of
this proposed rule, we are proposing that in order for a hospital in
the CCJR model to receive a reconciliation payment for the applicable
performance year, the participant hospital's measure results must meet
or exceed certain thresholds compared to the national hospital measure
results calculated for all HIQR-participant hospitals for all three
measures for each performance period. More specifically, for
performance years 1 through 3, a participant hospital's measure results
must be at or above the 30th percentile of the national hospital
measure results calculated for all hospitals under the HIQR Program for
each of the three measures for each performance period (for a detailed
discussion see section III.C.5.b of this proposed rule. For performance
years 4 and 5, a participant hospital's measure results must be at or
above the 40th percentile of the national hospital measure results (for
a detailed discussion see section III.C.5.b. of this proposed rule). In
this section, we fully describe the proposed quality measures that will
be used for public reporting and to determine whether a participant
[[Page 41277]]
hospital is eligible for the reconciliation payment under the CCJR
model. We are proposing a complication measure, readmission measure,
and a patient experience survey measure for the CCJR model. We note
that these measures will assess the priorities of safer care,
transitions of care and effective communication, and engagement of
patients in their care, respectively. Specifically, we are proposing
the following three CMS outcome measures:
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\47\ National Quality Strategy. Working for Quality: About the
National Quality Strategy. Available at: http://www.ahrq.gov/workingforquality/about.htm#develnqs. Accessed on April 15, 2015.
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The Hospital-level risk-standardized complication rate
(RSCR) following elective primary total hip arthroplasty (THA) and/or
total knee arthroplasty (TKA) (NQF #1550) (as referred to as THA/TKA
Complications measure (NQF #1550)).
The Hospital-level 30-day, all-cause risk-standardized
readmission rate (RSRR) following elective primary total hip
arthroplasty (THA) and/or total knee arthroplasty (TKA) (NQF #1551) (as
referred to as THA/TKA Readmissions measure (NQF #1551)).
HCAHPS Survey (NQF #0166).
For the inpatient hospital settings, these fully developed measures
are endorsed by the National Quality Forum (NQF), and recommended by
the NQF Measure Application Partnership (MAP) with subsequent
implementation in the HIQR Program, HVBP Program, and the HRRP (see FY
2015 IPPS/LTCH final rule 79 FR 50031, 50062, 50208 and 50209, and
50259). These measures are also publicly reported on Hospital Compare.
An important purpose of the proposed quality measures for the CCJR
model is to provide transparent information on hospital performance for
the care of patients undergoing eligible elective joint replacement
surgery and to ensure that care quality is either maintained or
improved. The proposed measures assess the following key outcomes for
patients undergoing elective joint replacement surgery:
Serious medical and surgical complications.
Unplanned readmissions.
Patient experience.
We note that complications and unplanned readmissions result in
excess inpatient and post-acute spending, and reductions in these
undesirable events will improve patient outcomes while simultaneously
lowering healthcare spending. The THA/TKA Complications measure (NQF
#550) will inform quality improvement efforts targeted towards
minimizing medical and surgical complications during surgery and the
postoperative period. The THA/TKA Readmission measure (NQF #1551)
captures the additional priorities of care provided in the transition
to outpatient settings and communication with patients and providers
during and immediately following inpatient admission. Improved quality
of care, specifically achieved through coordination and communication
among providers and with their patients and their caregivers, can
favorably influence performance on these measures. We believe
improvement in measure performance will also mean improved quality of
care and reduced cost.
Additionally, we continue to focus on patient experience during
hospitalizations, and believe that the HCAHPS Survey measure provides
not only the opportunity for patients to share their lower extremity
joint replacement hospital experience, but also for hospitals to
improve quality of care based on patient experience. For example, the
HCAHPS Survey ``categories of patient experience'' specifically
provides areas (for example, communication with doctors and nurses,
responsiveness of hospital staff, pain management) in which a hospital
could improve transition of care and increase patient safety (for
detailed description of patient experience areas covered by HCAHPS
surveys see section III.D.2.c. of this proposed). Additionally, the
survey includes measures related to nurse and physician communication,
pain management, timeliness of assistance, explanation of medications,
discharge planning and cleanliness of the hospitals to provide specific
areas for hospitals to improve on.\48\ Specific questions on provider
communication include the following:
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\48\ Manary MP, Boulding W, Staelin R, Glickman SW. The Patient
Experience and Health Outcomes. New England Journal of Medicine. Jan
2013; 368(3):201-203.
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How often the patient believed providers listened
carefully to his or her questions?
Whether the purpose of medications and associated adverse
events were explained?
Whether discussions on post-discharge instructions and
plans occurred so that the patient had a clear understanding of how to
take medications and an understanding of his or her responsibilities in
managing his or her health post-discharge?
All of these areas of patient experience would be invaluable to
improving hospital quality of care. We note that Manary, et al.\2\
suggest that by focusing on patient outcomes we can improve patient
experience and that timeliness of measuring patient experience is
important due to the potential for recall inaccuracies; survey
administration for HCAHPS surveys must begin between 2 and 42 days
after discharge from a hospital.
We are aware that there is concern whether there is a relationship
between patient satisfaction and quality of surgical care. To address
this question Tsai et al.\49\ recently assessed patient satisfaction
using the HCAHPS Survey results and correlated quality performance
using nationally implemented structural, process and outcome surgical
measures (that is, structural, process and outcome surgical measures in
the Hospital Value Based Purchasing, and the Hospital Readmission
Reduction Programs). The study found a positive relationship between
patient experience of care and surgical quality of care, among the
2,953 hospitals that perform six high cost and high frequency surgical
procedures that are also associated with morbidity and mortality in
Medicare beneficiaries. The study included hip replacement procedures,
and specifically noted that those hospitals with high patient
satisfaction also had high performance on nationally implemented
surgical quality measures (such as the Surgical Care Improvement
Project measures and 30-day risk-adjusted readmission and peri-
operative mortality outcome measures). Finally, we note that although
the HCAHPS Survey measure is not specific to joint replacements, the
survey provides all patients the opportunity to comment on their
hospital experience, including patients who have received lower
extremity joint replacements, which helps to inform hospitals on areas
for improvement. While HCAHPS scores are aggregated at the hospital
level, the surgical service line is one of three service lines
encompassed by the survey.\50\
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\49\ Tsai TC, Orav EJ, Jha AK. Patient Satisfaction and quality
of surgical care in US hospitals. Annals of Surgery. 2015; 261:2-8.
\50\ Giordano LA, Elliott MN, Goldstein E, Lehrman WG, Spencer
PA. Development, Implementation, and Public Reporting of the HCAHPS
Survey. Medical Care Research and Review. 2010;67(1):27-37.
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We strive to align as many measures and programs as is feasibly
possible. We believe proposing fully developed measures that are used
in other CMS hospital quality programs will minimize the burden on
participant hospitals for having to become familiar with new measures
and will allow us to appropriately capture quality data for the CCJR
model.
[[Page 41278]]
b. Public Display of Quality Measures in the CCJR Model
We believe that the display of measure results is an important way
to educate the public on hospital performance and increase the
transparency of the model. As discussed later in this section of this
proposed rule, for the CCJR model, we are proposing to display quality
measure results on the Hospital Compare Web site (http://www.hospitalcompare.hhs.gov/). We believe that the public and hospitals
are familiar with this Web site and how the information is displayed.
The proposed measures have been displayed on Hospital Compare over the
past few years. Finally, while also aligning the display of data for
the CCJR model with other CMS hospital quality programs, we believe
that the public and 'hospitals' familiarity with the Hospital Compare
Web site will make it simpler to access data.
2. Proposed Quality Measures for Performance Year 1 (CY 2016) and
Subsequent years
a. Hospital-Level Risk-Standardized Complication Rate (RSCR) Following
Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee
Arthroplasty (TKA) (NQF #1550)
(1) Background
THA and TKA are commonly performed procedures for the Medicare
population that improve quality of life. Between 2009 and 2012, there
were 337,419 total hip arthroplasty (THA) procedures and 750,569 total
knee arthroplasty (TKA) procedures for Medicare FFS patients 65 years
and older.\51\ The post-operation complications of these procedures are
high considering these are elective procedures, and usually, the
complications are devastating to patients. For example, rates for
periprosthetic joint infection, a rare but devastating complication,
have been reported at 2.3 percent for THA/TKA patients with rheumatoid
arthritis after 1 year of follow-up \52\ and 1.6 percent in Medicare
patients undergoing TKA after 2 years of follow up.\53\ Two studies
reported 90-day death rates following THA at 0.7 percent \54\ and 2.7
percent, respectively.\55\ Reported rates for pulmonary embolism
following TKA range from 0.5 percent to 0.9 percent.56 57 58
Reported rates for septicemia range from 0.1 percent, during the index
admission\59\ to 0.3 percent, 90 days following discharge for primary
TKA.\60\ Rates for bleeding and hematoma following TKA have been
reported at 0.94 percent \61\ to 1.7 percent.\62\ Combined, THA and TKA
procedures account for the largest payments for procedures under
Medicare.\63\ Both hip and knee arthroplasty procedures improve the
function and quality of life of patients with disabling arthritis, and
the volume and cost associated with these procedures are very high. We
believe it is important to assess the quality of care provided to
Medicare beneficiaries who undergo one or both of these procedures.
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\51\ Suter L, Grady JL, Lin Z et al.: 2013 Measure Updates and
Specifications: Elective Primary Total Hip Arthroplasty (THA) And/Or
Total Knee Arthroplasty (TKA) All-Cause Unplanned 30-Day Risk-
Standardized Readmission Measure (Version 2.0). 2013. http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
\52\ Bongartz, T, Halligan CS, Osmon D, et al. Incidence and
risk factors of prosthetic joint infection after total hip or knee
replacement in patients with rheumatoid arthritis. Arthritis Rheum.
2008; 59(12): 1713-1720.
\53\ Kurtz S, Ong K, Lau E, Bozic K, Berry D, Parvizi J.
Prosthetic joint infection risk after TKA in the Medicare
population. Clin Orthop Relat Res. 2010;468:5.
\54\ Cram P, Vaughan-Sarrazin MS, Wolf B, Katz JN, Rosenthal GE.
A comparison of total hip and knee replacement in specialty and
general hospitals. J Bone Joint Surg Am. Aug 2007;89(8):1675-1684.
Soohoo NF, Farng E, Lieberman JR, Chambers L, Zingmond, DS. Factors
That Predict Short-term Complication Rates After Total Hip
Arthroplasty. Clin Orthop Relat Res. Sep 2010;468(9):2363-2371.
\55\ Soohoo NF, Farng E, Lieberman JR, Chambers L, Zingmond, DS.
Factors That Predict Short-term Complication Rates After Total Hip
Arthroplasty. Clin Orthop Relat Res. Sep 2010;468(9):2363-2371. Cram
P, Vaughan-Sarrazin MS, Wolf B, Katz JN, Rosenthal GE. A comparison
of total hip and knee replacement in specialty and general
hospitals. J Bone Joint Surg Am. Aug 2007;89(8):1675-1684.
\56\ Mahomed NN, Barrett JA, Katz JN, et al. Rates and outcomes
of primary and revision total hip replacement in the United States
medicare population. J Bone Joint Surg Am. Jan 2003;85- A(1):27-32.
\57\ Khatod M, Inacio M, Paxton EW, et al. Knee replacement:
epidemiology, outcomes, and trends in Southern California: 17,080
replacements from 1995 through 2004. Acta Orthop. Dec
2008;79(6):812-819.
\58\ Solomon DH, Chibnik LB, Losina E, et al. Development of a
preliminary index that predicts adverse events after total knee
replacement. Arthritis & Rheumatism. 2006;54(5):1536-1542.
\59\ Browne, JA, Cook C, Hofmann A, Bolognesi MP. Postoperative
morbidity and mortality following total knee arthroplasty with
computer navigation. Knee. 2010;17(2): 152-156.
\60\ Cram P, Vaughan-Sarrazin MS, Wolf B, Katz JN, Rosenthal GE.
A comparison of total hip and knee replacement in specialty and
general hospitals. J Bone Joint Surg Am. Aug 2007;89(8):1675-1684.
\61\ Browne, JA, Cook C, Hofmann A, Bolognesi MP. Postoperative
morbidity and mortality following total knee arthroplasty with
computer navigation. Knee. 2010;17(2): 152-156.
\62\ Huddleston JI, Maloney WJ, Wang Y, Verzier N, Hunt DR,
Herndon JH. Adverse Events After Total Knee Arthroplasty: A National
Medicare Study. The Journal of Arthroplasty. 2009;24(6, Supplement
1): 95-100.
\63\ Bozic KJ, Rubash HE, Sculco TP, Berry DJ., An analysis of
Medicare payment policy for total joint arthroplasty. J
Arthroplasty. Sep 2008; 23(6 Suppl 1):133-138.
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The proposed measure developed by CMS, and currently implemented in
the Hospital IQR and Hospital Value-Based Purchasing Program, assesses
a hospital's risk standardized complication rate, which is the rate of
complications occurring after elective primary THA and TKA surgery. The
measure outcome is the rate of complications occurring after THA and
TKA during a 90-day period that begins with the date of the index
admission for a specific hospital; an index admission is the
hospitalization to which the complications outcome is attributed. The
following outcomes (either one or more) are considered complications in
this measure: Acute myocardial infarction, pneumonia, or sepsis/
septicemia within 7 days of admission; surgical site bleeding,
pulmonary embolism or death within 30 days of admission; or mechanical
complications, periprosthetic joint infection or wound infection within
90 days of admission. The data indicated that the median hospital-level
risk-standardized complication rate for 2008 was 4.2 percent, with a
range from 2.2 percent to 8.9 percent in hospitals. The variation in
complication rates suggests that there are important differences in the
quality of care delivered across hospitals, and that there is room for
quality improvement. In 2010, we developed the proposed measure of
hospital-level risk-standardized complication rate (RSCR) following
elective primary THA and TKA surgery, which was later endorsed by the
NQF (NQF #1550). In its Pre-Rulemaking Report for 2012,\64\ the Measure
Application Partnership (MAP) also recommended the inclusion of this
measure in the HIQR Program; we have not submitted this measure for use
in the post-acute care settings as the measure was developed for the
acute care hospital setting. This measure has been publicly reported on
Hospital Compare since FY 2014 and in the HIQR Program since FY 2015
(FY 2015 IPPS/LTCH final rule 79 FR 50062). Finally, we note a
comparison of the median hospital-level risk-standardized complication
rates for hospitals between April 1, 2011 and March 31, 2014
illustrates a performance gap (median RSCR of 3.1 percent with a range
from 1.4 percent to 6.9 percent) indicating
[[Page 41279]]
there is still room for quality improvement.\65\
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\64\ National Quality Forum. MAP Final Reports. Available at:
http://www.qualityforum.org/Publications/2012/02/MAP_Pre-Rulemaking_Report__Input_on_Measures_Under_Consideration_by_HHS_for_2012_Rulemaking.aspx. Accessed on April 1 6, 2015, page 78.
\65\ Suter L, Zang W, Parzynski C, et al. 2015 Procedure-
Specific Complication Measures Update and Specifications: Elective
Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty
(TKA) Risk-Standardized Complication Measure (Version 4.0). 2015.
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(2) Data Sources
We propose to use Medicare Part A and Part B FFS claims submitted
by the participant hospital as the data source to calculate the
measure. Index admission diagnoses and in-hospital comorbidities are
assessed using Medicare Part A claims. Additional comorbidities prior
to the index admission are assessed using Part A inpatient, outpatient,
and Part B office visit Medicare claims in the 1 to 2 months prior to
the index (initial) admission. Enrollment and post-discharge mortality
status are obtained from Medicare's enrollment database which contains
beneficiary demographic, benefits/coverage, and vital status
information.
(3) Cohort
The THA/TKA Complication measure (NQF #1550) includes Medicare FFS
beneficiaries, aged 65 years or older, admitted to non-federal acute
care hospitals for elective primary THA or TKA. THA and TKA procedures
eligible for inclusion are defined using ICD-9-CM codes 81.51 and
81.54, respectively. We propose that the cohort will include all
hospitals included in the CCJR model, but the CCJR model cohort may
differ slightly from the hospital cohort that is currently captured in
the measures through the HIQR program. That is, the CCJR model cohort
is a randomly selected group of acute care hospitals and therefore may
not include all of the HIQR program acute care hospitals (for a
detailed discussion on selection of hospitals for the model see section
III.A.4. of this proposed rule).
(4) Inclusion and Exclusion Criteria
An index admission is the hospitalization to which the complication
outcome is attributed. The measure includes the following index
admissions for patients:
Enrolled in Medicare FFS.
Aged 65 or over.
Enrolled in Part A and Part B Medicare for the 12 months
prior to the date of index admission and during the index admission.
Having a qualifying elective primary THA/TKA procedure;
elective primary THA/TKA procedures are defined as those procedures
without any of the following:
++ Femur, hip, or pelvic fractures coded in principal or secondary
discharge diagnosis fields of the index admission.
++ Partial hip arthroplasty (PHA) procedures with a concurrent THA/
TKA.
++ Revision procedures with a concurrent THA/TKA.
++ Resurfacing procedures with a concurrent THA/TKA.
++ Mechanical complication coded in the principal discharge
diagnosis field.
++ Malignant neoplasm of the pelvis, sacrum, coccyx, lower limbs,
or bone/bone marrow or a disseminated malignant neoplasm coded in the
principal discharge diagnosis field.
++ Removal of implanted devices/prostheses.
++ Transfer from another acute care facility for the THA/TKA.
The following admissions would be excluded from the measure:
Admissions for patients discharged against medical advice
(AMA).
Admissions for patients with more than two THA/TKA
procedure codes during the index hospitalization.
Consistent with the FY 2016 IPPS/LTCH proposed rule,
admissions for patients without at least 90 days post-discharge
enrollment in FFS Medicare; this exclusion is an update to the measure
signaled in the HIQR program section of the FY2016 IPPS/LTCH proposed
rule (80 FR 24572 through 24574) to ensure that disproportionate
Medicare FFS disenrollment does not bias the measure results.
After applying these exclusion criteria, we randomly select one
index admission for patients with multiple index admissions in a
calendar year. Therefore, we exclude the other eligible index
admissions in that year. Identification and use of a single index
admission in a calendar year is done because this measure includes
mortality as an outcome and the probability of death increases with
each subsequent admission, preventing each episode of care from being
mutually independent. Therefore only one index admission is selected to
maintain measure integrity.
We note that THA/TKA Complication measure (NQF #1550) does not
capture patients undergoing partial hip arthroplasty procedures. We
excluded partial hip arthroplasty procedures primarily because partial
hip arthroplasty procedures are done for hip fractures. Therefore, they
are not elective procedures. Also, partial hip arthroplasty procedures
are typically performed on patients who are older, frailer, and have
more comorbid conditions. Although this exclusion is not fully
harmonized with MS-DRG 469 and 470, which includes partial hip
arthroplasty procedures, this measure will still provide strong
incentive for improving and maintaining care quality across joint
replacement patients as hospitals typically develop protocols for lower
extremity joint arthroplasty that will address peri-operative and post-
operative care for both total and partial hip arthroplasty procedures.
As previously cited in the Episode Definition of the CCJR model
(section III.B. of this proposed rule) the frequency of administrative
claims data using ICD-9 codes for 2014 indicated that partial hip
arthroplasty (ICD-9 code: 81.52) accounted for 12 percent of the
administrative claims, while Total Hip replacement (ICD-9 code: 81.51)
and Total Knee replacement (ICD-9 code: 81.54) accounted for 87 percent
of the administrative claims for 2014. We also note that the same
surgeons and care teams frequently perform both procedures. Therefore,
quality improvement efforts initiated in response to the THA/TKA
Complication measure (NQF #1550) are likely to benefit patients
undergoing similar elective procedures, such as partial hip
arthroplasty and revision THA/TKA procedures, and possibly even non-
elective THA/TKA procedures, such as fracture-related THA.
(5) Risk-Adjustment
We note that CCJR-we chose to align this measure with the risk-
adjustment methodologies adopted for the HIQR program and the HRRP in
accordance with section 1886(b)(3)(B)(viii)(VIII) of the Act (FY 2013
IPPS/LTCH final rule 77 FR 53516 through 53518 and FY 2015 IPPS/LTCH
final rule; 79 FR 50024, 50031, and 50202). We note that the risk-
adjustment takes into account the patient case-mix to assess hospital
performance. The patient risk factors are defined using the
Hierarchical Condition Categories (CC), which are clinically relevant
diagnostic groups of ICD-9-CM codes.\66\ The CCs used in the risk
adjustment model for this measure, are provided on the CMS QualityNet
Web site (https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228772783162). We note that the measure uses all Part A and B administrative
claims ICD-9 codes for the year prior to and including the index
admission. The Part A and B administrative claims ICD-9 codes are
[[Page 41280]]
used to inform the risk prediction for each patient; diagnostic codes
from post-acute care settings are included in the measure, but this
information is only used to identify a hospital's patient case mix in
order to adequately adjust for differences in case mix across
hospitals. Use of the Part A and B data does not mean the measures are
applicable to post-acute care settings, only that they use
comprehensive data to predict the risk of the outcome and adjust for
hospital patient case mix. The measure would meet the requirement if it
applied since risk-adjustment adjusts for hospital patient mix,
including age and comorbidities, to ensure that hospitals that care for
a less healthy patient population are not penalized unfairly. The
measure methodology defines ''complications'' as acute myocardial
infarction (AMI); pneumonia; sepsis/septicemia; pulmonary embolism;
surgical site bleeding; death; wound infection; periprosthetic joint
infection; and mechanical complication within 0 to 90 days post the
index date of admission, depending on the complication. The decision on
the appropriate follow-up period of 0 to 90 days was based on our
analysis of 90-day trends in complication rates using the 2008 Medicare
FFS Part A Inpatient Data. We found that rates for mechanical
complications are elevated until 90 days post the date of index
admission. We found that the rates for four other complications--death,
surgical site bleeding, wound infection, and pulmonary embolism--are
elevated for 30 days, and that rates for AMI, pneumonia, and sepsis/
septicemia level off 7 days after the date of index admission.
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\66\ Pope G, Ellis R, Ash A, et al., Principal Inpatient
Diagnostic Cost Group Models for Medicare Risk Adjustment. Health
Care Financing Review. 2000;21(3):26.
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(6) Calculating the Risk-Standardized Complication Rate and Performance
Period
Analogous to how we calculate hospital risk-standardized
readmission rates with all readmission measures and risk-standardized
mortality rates with the mortality measures used in CMS hospital
quality programs, we calculate the hospital risk-standardized
complication rate by producing a ratio of the number of ``predicted''
complications (that is, the adjusted number of complications at a
specific hospital based on its patient population) to the number of
``expected'' complications (that is, the number of complications if an
average quality hospital treated the same patients) for each hospital
and then multiplying the ratio by the national raw complication rate.
The 3-year rolling performance period would be consistent with that
used for HIQR (FY 2015 IPPS/LTCH final rule 79 FR 50208 and 50209). For
performance year-one of the CCJR model, we propose that the performance
period for the THA/TKA Complication measure (NQF #1550) we propose to
be April 2013 through March 2016. As noted in this proposed rule, the
THA/TKA Readmissions measure (NQF #1551) uses a 30-day window of
follow-up, which is different from the 90-day window of follow-up used
in the THA/TKA Complications measure (NQF #1550). Section III.D.4. of
this proposed rule, Form and Manner, summarizes performance periods for
years 1 through 5 of the CCJR JR model.
We seek public comment on this proposal to assess quality
performance through implementation of the Hospital-level risk-
standardized complication rate (RSCR) following elective primary total
hip arthroplasty (THA) and/or total knee arthroplasty (TKA) (NQF #1550)
measure.
b. Hospital-Level 30-Day, All-Cause Risk-Standardized Readmission Rate
(RSRR) Following Elective Primary Total Hip Arthroplasty (THA) and/or
Total Knee Arthroplasty (TKA) (NQF #1551)
(1) Background
The objective of CMS's Hospital-level 30-day, all-cause risk-
standardized readmission rate (RSRR) following elective primary total
hip arthroplasty (THA) and/or total knee arthroplasty (TKA) (NQF #1551)
(as referred to as THA/TKA Readmission measure (NQF #1551)) measure is
to assess readmission from any cause within 30 days of discharge from
the hospital following elective primary THA and TKA. As previously
stated, outcome measures such as complications and readmissions are the
priority areas for the HIQR Program. Elective primary THA and TKA are
commonly performed procedures that improve quality of life. THA and TKA
readmissions are disruptive to patients' quality of life, costly to the
Medicare program, and data support that readmission rates can be
improved through better care coordination and other provider
actions.\67\ Furthermore, we believe that there is an opportunity for
hospitals to improve quality of life for the patient. From July 1, 2011
to June 30, 2014, Medicare FFS claims data indicate that 30-day
hospital-level risk-standardized readmission rates ranged from 2.6
percent to 8.5 percent among hospitals with a median rate of 4.8
percent. The mean risk-standardized readmission rate was 4.9
percent.\68\ This variation suggests there are important differences in
the quality of care received across hospitals, and that there is room
for improvement. A measure that addresses readmission rates following
THA and TKA provides an opportunity to provide targets for efforts to
improve the quality of care and reduce costs for patients undergoing
these elective procedures. The measure also increases transparency for
consumers and provides patients with information that could guide their
choices. We believe that a risk-adjusted readmission outcome measure
can provide a critical perspective on the provision of care, and
support improvements in care for the Medicare patient population
following THA/TKA hospitalization. We note that the THA/TKA Readmission
measure (NQF #1551) has wide stakeholder support, with NQF endorsement
in January 2012, and support by the MAP for the HIQR Program (2012 Pre-
Rulemaking report \19\), and for HRRP (2013 Pre-Rulemaking report
\69\). Finally, THA/TKA Readmission Measure (NQF #1551) has been
publicly reported since FY 2014 (79 FR 50062), and was implemented in
both the HIQR program (77 FR 53519 through 53521) and HRRP (78 FR 50663
and 50664).
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\67\ Mistiaen P, Francke AL, Poot E. Interventions aimed at
reducing problems in adult patients discharged from hospital to
home: a systematic meta-review. BMC Health Services Research.
2007;7:47.
\68\ Suter L, Desai N, Zang W, et al. 2015 2015 Procedure-
Specific Readmission Measures Updates and Specifications Report:
Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee
Arthroplasty (TKA) Risk-Standardized Readmission Measure (Version
4.0), Isolated Coronary Artery Bypass Graft (CABG) Surgery--Version
2.0. 2015; http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
\69\ National Quality Forum. MAP Final Reports. Available at:
http://www.qualityforum.org/Publications/2013/02/MAP_Pre-Rulemaking_Report_-_February_2013.aspx. Accessed on April 16, 2015,
page 143.
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(2) Data Sources
We propose to use Medicare Part A and Part B FFS claims submitted
by the participant hospital as the data source for calculation of the
THA/TKA Readmission measure (NQF #1551). Index admission diagnoses and
in-hospital comorbidity data are assessed using Medicare Part A claims.
Additional comorbidities prior to the index admission are assessed
using Part A inpatient, outpatient, and Part B office visit Medicare
claims in the 12 months prior to index (initial) admission. Enrollment
status is obtained from Medicare's enrollment database which contains
beneficiary demographic,
[[Page 41281]]
benefit/coverage, and vital status information.
(3) Cohort
The THA/TKA Readmission measure (NQF #1551) includes Medicare FFS
beneficiaries, aged 65 years or older, admitted to non-federal acute
care hospitals for elective primary THA or TKA. THA and TKA procedures
eligible for inclusion are defined using ICD-9-CM codes 81.51 and
81.54, respectively. We propose that the cohort will include all
hospitals included in the CCJR model, but the CCJR model cohort may
differ slightly from the hospital cohort that is currently captured in
the measures through the HIQR program. That is, the CCJR model cohort
is a randomly selected group of acute care hospitals and therefore may
not include all of the HIQR program acute care hospitals (for a
detailed discussion on selection of hospitals for the model see section
III.A. of this proposed rule.)
(4) Inclusion and Exclusion Criteria
We propose that an index admission is the anchor hospitalization to
which the readmission outcome is attributed. The measure includes index
admissions for patients:
Enrolled in Medicare FFS.
Aged 65 or over.
Discharged from non-federal acute care hospitals alive.
Enrolled in Medicare Part A and Part B for the 12 months
prior to the date of index admission and during the index admission.
Having a qualifying elective primary THA/TKA procedure;
elective primary THA/TKA procedures are defined as those procedures
without any of the following:
++ Femur, hip, or pelvic fractures coded in principal or secondary
discharge diagnosis fields of the index admission.
++ Partial hip arthroplasty (PHA) procedures with a concurrent THA/
TKA.
++ Revision procedures with a concurrent THA/TKA.
++ Resurfacing procedures with a concurrent THA/TKA.
++ Mechanical complication coded in the principal discharge
diagnosis field.
++ Malignant neoplasm of the pelvis, sacrum, coccyx, lower limbs,
or bone/bone marrow or a disseminated malignant neoplasm coded in the
principal discharge diagnosis field.
++ Removal of implanted devices/prostheses.
++ Transfer from another acute care facility for the THA/TKA.
This measure excludes index admissions for patients:
++ Without at least 30 days post-discharge enrollment in FFS
Medicare.
++ Discharged against medical advice (AMA).
++ Admitted for the index procedure and subsequently transferred to
another acute care facility.
++ With more than two THA/TKA procedure codes during the index
hospitalization.
Finally, for the purpose of this measure, admissions within 30 days
of discharge from an index admission are not eligible to also be index
admissions. Thus, no hospitalization will be counted as both a
readmission and an index admission in this measure.
This measure does not capture patients undergoing partial hip
arthroplasty procedures, as partial hip arthroplasties are primarily
done for hip fractures and are typically performed on patients who are
older, frailer, and have more comorbid conditions. Although this
exclusion is not fully harmonized with MS-DRG 469 and 470, which
includes partial hip arthroplasty procedures, this measure would still
provide strong incentive for improving and maintaining care quality
across joint replacement patients. We believe the THA/TKA Readmission
measure (NQF #1551) provides strong incentive for quality improvement
because hospitals typically develop protocols for lower extremity joint
arthroplasty that will address peri-operative and post-operative care
for both total and partial hip arthroplasties, and the same surgeons
and care teams frequently perform both procedures. Therefore, quality
improvement efforts initiated in response to the THA/TKA Readmission
measure (NQF #1551) are likely to benefit patients undergoing similar
elective procedures, such as partial hip arthroplasty and revision THA/
TKA procedures, and possibly even non-elective THA/TKA procedures, such
as fracture-related THA.
(5) Risk-Adjustment
We note that CCJR-we chose to align this measure with the risk-
adjustment methodologies adopted for Readmission measure (NQF #1551)
under the HIQR Program in accordance with section
1886(b)(3)(B)(viii)(VIII) of the Act, as finalized in FY 2013 IPPS/LTCH
PPS final rule (77 FR 53519 through 53521). We also note that the
measure risk- adjustment takes into account patient age and
comorbidities to allow a fair assessment of hospital performance. The
measure defines the patient risk factors for readmission using
diagnosis codes collected from all patient claims 1 year prior to
patient index hospitalization for THA and TKA. As previously noted in
the THA/TKA Complication measure (NQF #1550), Part A and B
administrative claims ICD-9 codes are used to inform the risk
prediction for each patient; diagnostic codes from post-acute care
settings are included in the measure, but this information is only used
to identify a hospital's patient case mix in order to adequately adjust
for differences in case mix across hospitals. Use of the Part A and B
data does not mean the measures are applicable to post-acute care
settings, only that they use comprehensive data to predict the risk of
the outcome and adjust for hospital patient case mix. We note that the
patient diagnosis codes are grouped using Hierarchical Condition
Categories (CCs), which are clinically relevant diagnostic groups of
ICD-9-CM codes.\70\ The CCs used in the risk adjustment model for this
measure, are provided on the CMS QualityNet Web site (https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1219069856694). In summary, age and comorbidities present at the time of
admission are adjusted for differences in hospital case mix (patient
risk factors). The measure uses the hierarchical logistic regression
model (HLM) statistical methodology for risk adjustment.
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\70\ Pope G, Ellis R, Ash A, et al., Principal Inpatient
Diagnostic Cost Group Models for Medicare Risk Adjustment. Health
Care Financing Review. 2000;21(3):26.
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(6) Calculating the Risk-Standardized Readmission Rate and Performance
period
We propose to calculate hospital risk-standardized readmission
rates consistent with the methodology used to risk standardize all
readmission measures and mortality measures used in CMS hospital
quality programs. Using HLM, we calculate the hospital-level elective
primary THA/TKA risk-standardized readmission rate by producing a ratio
of the number of ''predicted'' readmissions (that is, the adjusted
number of readmissions at a specific hospital) to the number of
''expected'' readmissions (that is, the number of readmissions if an
average quality hospital treated the same patients) for each hospital
and then multiplying the ratio by the national raw readmission rate.
The 3-year rolling performance period would be consistent with that
used for the HIQR program (FY 2015 IPPS/LTCH final rule 79 FR 50208 and
50209). For performance year-one of the CCJR model, we propose that the
performance period for the THA/TKA Readmission measure (NQF
[[Page 41282]]
#1551) would be July 2013 through June 2016. As noted in this proposed
rule for the section on the THA/TKA Complications measure (NQF #1550),
there is a 90-day window of follow-up which is different from the THA/
TKA Readmissions measure (NQF #1551). Section III.D.4.Form and Manner,
of this proposed rule summarizes performance periods for years 1
through 5 of the CCJR model years.
We invite public comments on this proposal to include Hospital-
level 30-day, all-cause risk-standardized readmission rate (RSRR)
following elective primary total hip arthroplasty (THA) and/or total
knee arthroplasty (TKA) (NQF #1551) or both in the CCJR model to assess
quality performance. We also invite public comment on inclusion of
other potential quality measures in the model.
c. Hospital Consumer Assessment of Healthcare Providers and Systems
(HCAHPS) Survey
(1) Background
The HCAHPS Survey (NQF #0166) is a CMS survey and a national,
standardized, publicly reported survey of patients' experience of
hospital care. The HCAHPS Survey is endorsed by the NQF (#0166); CMS is
the measure steward. The HCAHPS survey, also known as CAHPS[supreg]
Hospital Survey, is a survey instrument and data collection methodology
for measuring patients' perceptions of their hospital experience. The
HCAHPS Survey asks recently discharged patients 32 questions about
aspects of their hospital experience that they are uniquely suited to
address. The core of the survey contains 21 items that ask ``how
often'' or whether patients experienced a critical aspect of hospital
care. The survey also includes four items to direct patients to
relevant questions, five items to adjust for the mix of patients across
hospitals, and two items that support Congressionally-mandated reports
(see 77 FR 53513 through 53515). Eleven HCAHPS measures (seven
composite measures, two individual items and two global items) are
currently publicly reported on the Hospital Compare Web site for each
hospital participating in the HIQR Program (see 79 FR 50259.) Each of
the seven currently reported composite measures is constructed from two
or three survey questions. The seven composites summarize the
following:
How well doctors communicate with patients.
How well nurses communicate with patients.
How responsive hospital staff are to patients' needs.
How well hospital staff helps patients manage pain.
How well the staff communicates with patients about
medicines.
Whether key information is provided at discharge.
How well the patient was prepared for the transition to
post-hospital care.
Lastly, the two individual items address the cleanliness and
quietness of patients' rooms, while the two global items report
patients' overall rating of the hospital, and whether they would
recommend the hospital to family and friends. We propose to adopt a
measure in the CCJR model that uses HCAHPS survey data to assess
quality performance and capture patient experience of care.
(2) Data Sources
The HCAHPS Survey is administered to a random sample of adult
inpatients between 48 hours and 6 weeks after discharge. As previously
discussed in section III.D.5. of this proposed rule, the HCAHPS survey
data is collected on inpatient experience, is not limited to Medicare
beneficiaries, and does not distinguish between types of Medicare
beneficiaries. Patients admitted in the medical, surgical and maternity
care service lines are eligible for the survey; the survey is not
restricted to Medicare beneficiaries. Hospitals may use an approved
survey vendor, or collect their own HCAHPS data (if approved by CMS to
do so) (for a detailed discussion see 79 FR 50259). To accommodate
hospitals, the HCAHPS Survey can be implemented using one of the
following four different survey modes:
Mail.
Telephone.
Mail with telephone follow-up.
Active Interactive Voice Recognition (IVR).
Regardless of the mode used, hospitals are required to make
multiple attempts to contact patients. Hospitals may use the HCAHPS
Survey alone, or include additional questions after the 21 core items
discussed previously. Hospitals must survey patients throughout each
month of the year, and hospitals participating in the HIQR Program must
target at least 300 completed surveys over 4 calendar quarters in order
to attain the reliability criterion CMS has set for publicly reported
HCAHPS scores (see 79 FR 50259). The survey itself and the protocols
for sampling, data collection, coding, and file submission can be found
in the current HCAHPS Quality Assurance Guidelines manual, available on
the HCAHPS Web site located at: http://www.hcahpsonline.org. (The
HCAHPS Survey is available in several languages, and all official
translations of the HCAHPS Survey instrument are available in the
current HCAHPS Quality Assurance Guidelines at http://www.hcahpsonline.org/qaguidelines.aspx.)
(3) Cohort
Hospitals, or their survey vendors, submit HCAHPS data in calendar
quarters (3 months). Consistent with other quality reporting programs,
we propose that HCAHPS scores would be publicly reported on Hospital
Compare based on 4 consecutive quarters of data. For each public
reporting, the oldest quarter of data is rolled off, and the newest
quarter is rolled on (see 79 FR 50259).
(4) Inclusion and Exclusion Criteria
The HCAHPS Survey is broadly intended for patients of all payer
types who meet the following criteria:
Eighteen years or older at the time of admission.
Admission includes at least one overnight stay in the
hospital.
Non-psychiatric MS-DRG/principal diagnosis at discharge.
Alive at the time of discharge.
There are a few categories of otherwise eligible patients who are
excluded from the sample frame as follows:
``No-Publicity'' patients--Patients who request that they
not be contacted.
Court/Law enforcement patients (that is, prisoners);
patients residing in halfway houses are included.
Patients with a foreign home address (U.S. territories--
Virgin Islands, Puerto Rico, Guam, American Samoa, and Northern Mariana
Islands are not considered foreign addresses and are not excluded).