82_FR_39468 82 FR 39310 - Medicare Program; Cancellation of Advancing Care Coordination Through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model (CMS-5524-P)

82 FR 39310 - Medicare Program; Cancellation of Advancing Care Coordination Through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model (CMS-5524-P)

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services

Federal Register Volume 82, Issue 158 (August 17, 2017)

Page Range39310-39333
FR Document2017-17446

This proposed rule proposes to cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model and to rescind the regulations governing these models. It also proposes to revise certain aspects of the Comprehensive Care for Joint Replacement (CJR) model, including: Giving certain hospitals selected for participation in the CJR model a one-time option to choose whether to continue their participation in the model; technical refinements and clarifications for certain payment, reconciliation and quality provisions; and a change to increase the pool of eligible clinicians that qualify as affiliated practitioners under the Advanced Alternative Payment Model (APM) track.

Federal Register, Volume 82 Issue 158 (Thursday, August 17, 2017)
[Federal Register Volume 82, Number 158 (Thursday, August 17, 2017)]
[Proposed Rules]
[Pages 39310-39333]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17446]



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Vol. 82

Thursday,

No. 158

August 17, 2017

Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 510 and 512





Medicare Program; Cancellation of Advancing Care Coordination Through 
Episode Payment and Cardiac Rehabilitation Incentive Payment Models; 
Changes to Comprehensive Care for Joint Replacement Payment Model (CMS-
5524-P); Proposed Rule

Federal Register / Vol. 82 , No. 158 / Thursday, August 17, 2017 / 
Proposed Rules

[[Page 39310]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 510 and 512

[CMS-5524-P]
RIN 0938-AT16


Medicare Program; Cancellation of Advancing Care Coordination 
Through Episode Payment and Cardiac Rehabilitation Incentive Payment 
Models; Changes to Comprehensive Care for Joint Replacement Payment 
Model (CMS-5524-P)

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule proposes to cancel the Episode Payment 
Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model 
and to rescind the regulations governing these models. It also proposes 
to revise certain aspects of the Comprehensive Care for Joint 
Replacement (CJR) model, including: Giving certain hospitals selected 
for participation in the CJR model a one-time option to choose whether 
to continue their participation in the model; technical refinements and 
clarifications for certain payment, reconciliation and quality 
provisions; and a change to increase the pool of eligible clinicians 
that qualify as affiliated practitioners under the Advanced Alternative 
Payment Model (APM) track.

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 October 16, 2017.

ADDRESSES: In commenting, please refer to file code CMS-5524-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    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-5524-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 to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-5524-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    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, call telephone number (410) 786-7195 
in advance to schedule your arrival with one of our staff members.
    Comments erroneously 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, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    For questions related to the CJR model: CJR@cms.hhs.gov.
    For questions related to the EPMs: EPMRULE@cms.hhs.gov.

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 prior to the submission deadline will also be 
available for public inspection as they are received, generally 
beginning approximately three weeks after publication of a document, at 
the headquarters of the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of 
each week from 8:30 a.m. to 4 p.m. 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/.

Acronyms

ACE Acute Care Episode Demonstration
ACO Accountable Care Organization
AMI Acute Myocardial Infarction
APM Alternative Payment Model
BPCI Bundled Payments for Care Improvement
CABG Coronary Artery Bypass Graft
CCN CMS Certification Number
CCSQ Center for Clinical Standards and Quality
CEHRT Certified Electronic Health Record Technology
CEO Chief Executive Officer
CFO Chief Financial Officer
CJR Comprehensive Care for Joint Replacement
CMS Centers for Medicare & Medicaid Services
CR Cardiac rehabilitation
CY Calendar Year
E/M Evaluation and Management
EPM Episode payment model
FFS Fee-for-service
FR Federal Register
HACRP Hospital-Acquired Condition Reduction Program
HHS U.S. Department of Health and Human Services
HVBP Hospital Value-Based Purchasing Program
ICD-CM International Classification of Diseases, Clinical 
Modification
IFC Interim Final Rule with Comment Period
IPPS Inpatient Prospective Payment System
LEJR Lower-extremity joint replacement
MPFS Medicare Physician Fee Schedule
MP Malpractice
MSA Metropolitan Statistical Area
MS-DRG Medical Severity Diagnosis-Related Group
NPI National Provider Identifier
NPRA Net Payment Reconciliation Amount
NQF National Quality Forum
OMB Office of Management and Budget
PE Practice Expense
PGP Physician Group Practice

[[Page 39311]]

PRO Patient-Reported Outcome
PY Performance year
QP Qualifying APM Participant
RFA Regulatory Flexibility Act
RSCR Risk-Standardized Complication Rate
RVU Relative Value Unit
SHFFT Surgical hip/femur fracture treatment
THA Total hip arthroplasty
TIN Taxpayer Identification Number
TKA Total knee arthroplasty
UMRA Unfunded Mandates Reform Act

I. Executive Summary

A. Purpose

    The purpose of this proposed rule is to propose to cancel the 
Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) 
incentive payment model, established by the Center for Medicare and 
Medicaid Innovation (Innovation Center) under the authority of section 
1115A of the Social Security Act (the Act), and to rescind the 
regulations at 42 CFR part 512. Additionally, this proposed rule 
proposes to prospectively make participation voluntary for all 
hospitals in approximately half of the geographic areas selected for 
participation in the Comprehensive Care for Joint Replacement (CJR) 
model (that is, in 33 of the 67 Metropolitan Statistical Areas (MSAs) 
selected; (see 80 FR 73299 Table 4)) and for low-volume and rural 
hospitals in all of the geographic areas selected for participation in 
the CJR model. We are also proposing several technical refinements and 
clarifications for certain CJR model payment, reconciliation, and 
quality provisions, and a change to the criteria for the Affiliated 
Practitioner List to broaden the CJR Advanced Alternative Payment Model 
(APM) track to additional eligible clinicians.
    We note that review and reevaluation of policies and programs, as 
well as revised rulemaking, are within an agency's discretion, and that 
discretion is often exercised after a change in administration occurs. 
The EPMs and the CR incentive models were designed as mandatory payment 
models and implemented via notice and comment rulemaking to test the 
effects of bundling cardiac and orthopedic care beginning in 2018 and 
further incentivizing higher value care. The CJR model was also 
designed as a mandatory payment model established via notice and 
comment rulemaking to test the effects of bundling on orthopedic 
episodes involving lower extremity joint replacements; we note that the 
CJR model began on April 1, 2016 and is currently in its second 
performance year.
    While we continue to believe that cardiac and orthopedic episode 
models offer opportunities to redesign care processes and improve 
quality and care coordination across the inpatient and post-acute care 
spectrum while lowering spending, after careful review, we have 
determined that it is appropriate to propose to rescind the regulations 
at 42 CFR part 512, which relate to the EPMs and CR incentive payment 
model, and reduce the geographic scope of the CJR model for the 
following reasons. First, we believe that requiring hospitals to 
participate in additional episode payment models at this time is not in 
the best interest of the agency or the affected providers. Many 
providers are currently engaged in voluntary initiatives with CMS, and 
we expect to continue to offer opportunities for providers to 
participate in voluntary initiatives, including episode-based payment 
models. We are concerned that engaging in large mandatory episode 
payment model efforts at this time may impede our ability to engage 
providers, such as hospitals, in future voluntary efforts. Similarly, 
we also believe that reducing the number of providers required to 
participate in the CJR model will allow us to continue to evaluate the 
effects of such a model while limiting the geographic reach of our 
current mandatory models. We considered altering the design of the EPMs 
and the CR incentive payment model to allow for voluntary participation 
and to take into account other feedback on the models, but as this 
would potentially involve restructuring the model design, payment 
methodologies, financial arrangement provisions and/or quality 
measures, we did not believe that such alterations would offer 
providers enough time to prepare for such changes, given the planned 
January 1, 2018 start date. In addition, if at a later date we decide 
to test these models, or similar models, on a voluntary basis, we would 
not expect to implement them through rulemaking, but rather would use 
methods of soliciting applications and securing participants' agreement 
to participate consistent with how we have implemented other voluntary 
models. Finally, we believe that canceling the EPMs and CR incentive 
payment model, as well as altering the scope of the CJR model, offers 
CMS greater flexibility to design and test other episode-based payment 
models, while still allowing us to test and evaluate the impact of the 
ongoing CJR model on enhancing the quality of care while reducing 
costs. Hospitals in the CJR model have been participating for more than 
a year and a half, and we have begun to give hospitals in the model 
financial and quality results from the first performance year. In many 
cases, CJR hospitals have made investments in care redesign, and we 
want to recognize such investments and commitments to improvement while 
reducing the overall number of hospitals that are required to 
participate.
    We seek public comment on the proposals contained in this proposed 
rule, and also on any alternatives considered.

B. Summary of Economic Effects

    We do not anticipate that our proposal to cancel the EPMs and CR 
incentive payment model prior to the start of those models will have 
any costs to providers. As shown in our impact analysis in section V. 
of this proposed rule, we estimate that the CJR model changes we are 
proposing will reduce the previously projected CJR model savings (82 FR 
603) by approximately $90 million. Therefore, we estimate that the 
total CJR model impact after the changes in this proposed rule will 
save the Medicare program $204 million, instead of $294 million, over 
the remaining 3-year performance period (2018 through 2020) of the CJR 
model. Our impact analysis has some degree of uncertainty and makes 
assumptions as discussed in section V. of this proposed rule. In 
addition to these estimated impacts, as with many of the Innovation 
Center models, the goals that participants are attempting to achieve 
include improving overall quality of care, enhancing participating 
provider infrastructure to support better care management and reducing 
costs. We anticipate there will continue to be a broader focus on care 
coordination and quality improvement through the CJR model among 
hospitals and other providers and suppliers within the Medicare program 
that may lead to better care management and improved quality of care 
for beneficiaries.

II. Statutory Authority and Background

    Under the authority of section 1115A of the Social Security Act 
(the Act), through notice-and-comment rulemaking, CMS' Center for 
Medicare and Medicaid Innovation (Innovation Center) established the 
Comprehensive Care for Joint Replacement model in a final rule titled 
``Medicare Program; Comprehensive Care for Joint Replacement Payment 
Model for Acute Care Hospitals Furnishing Lower Extremity Joint 
Replacement Services'' published in the November 24, 2015 Federal 
Register (80 FR 73274 through 73554) (referred to in this proposed rule 
as the ``CJR model final rule''). We established three new models for 
acute myocardial infarction, coronary artery

[[Page 39312]]

bypass graft, and surgical hip/femur fracture treatment episodes of 
care, which are collectively called the Episode Payment Models (EPMs), 
created a Cardiac Rehabilitation incentive payment model (CR incentive 
payment model), and revised several existing provisions for the CJR 
model, in a final rule titled ``Advancing Care Coordination Through 
Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment 
Model; and Changes to the Comprehensive Care for Joint Replacement 
Model'' published in the January 3, 2017 Federal Register (82 FR 180) 
(referred to in this proposed rule as the ``EPM final rule'').
    The effective date for most of the provisions of the EPM final rule 
was February 18, 2017, and in the EPM final rule we specified an 
effective date of July 1, 2017 for certain CJR model regulatory changes 
intended to align with a July 1, 2017 applicability, or start, date for 
the EPMs and CR incentive payment model. On January 20, 2017, the 
Assistant to the President and Chief of Staff issued a memorandum 
titled ``Regulatory Freeze Pending Review'' that instructed Federal 
agencies to temporarily postpone the effective date for 60 days from 
the date of the memorandum for regulations that had been published in 
the Federal Register but had not taken effect, for purposes of 
reviewing the rules and considering potentially proposing further 
notice-and-comment rulemaking. Accordingly, on February 17, 2017, we 
issued a final rule in the Federal Register (82 FR 10961) to delay 
until March 21, 2017 the effective date of any provisions of the EPM 
final rule that were to become effective on February 18, 2017. We 
subsequently issued an interim final rule with comment (IFC) period in 
the Federal Register on March 21, 2017 (referred to in this proposed 
rule as the ``March 21, 2017 IFC'') (82 FR 14464). The March 21, 2017 
IFC further delayed the effective date of the provisions that were to 
take effect March 21, 2017 until May 20, 2017, further delayed the 
applicability date of the EPMs and CR incentive payment model 
provisions until October 1, 2017, and further delayed the effective 
date of the conforming CJR model changes until October 1, 2017. In the 
March 21, 2017 IFC, we also solicited public comment on further 
delaying the applicability date for the EPMs and CR incentive payment 
provisions, as well as the effective date for the conforming changes to 
the CJR model from October 1, 2017 until January 1, 2018 to allow for 
additional notice-and-comment rulemaking. Based on the public comments 
we received in response to the March 21, 2017 IFC, we published a final 
rule (referred to in this proposed rule as the ``May 19, 2017 final 
delay rule'') on May 19, 2017 (82 FR 22895) to finalize a January 1, 
2018 applicability date for the EPMs and CR incentive payment 
provisions, as well as to finalize a January 1, 2018 effective date for 
the conforming changes to the CJR model (specifically amending Sec.  
510.2; adding Sec.  510.110; amending Sec.  510.120; amending Sec.  
510.405; amending Sec.  510.410; revising Sec.  510.500; revising Sec.  
510.505; adding Sec.  510.506; and amending Sec.  510.515). Additional 
changes to the CJR model, in accordance with the March 21, 2017 IFC, 
took effect May 20, 2017.
    As we stated in the May 19, 2017 final delay rule (82 FR 22897), we 
received a number of comments on the models that did not relate to the 
start date change comment solicitation. These additional comments 
suggested that we reconsider or revise various model aspects, policies 
and design components; in particular, many of these comments suggested 
that we should make participation in the models voluntary instead of 
mandatory. We did not respond to these comments in the May 19, 2017 
final delay rule, as the comments were out of scope of that rulemaking, 
but we stated that we might take them into consideration in future 
rulemaking.
    Our specific proposals are discussed in the following sections of 
this proposed rule.

III. Provisions of the Proposed Regulations

A. Proposed Cancellation of EPMs and Cardiac Rehabilitation Incentive 
Payment Model

    In the January 3, 2017 EPM final rule, we established three bundled 
payment models for acute myocardial infarction (AMI), coronary artery 
bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) 
episodes, and a Cardiac Rehabilitation (CR) incentive payment model. 
These models are similar to other Innovation Center models and focus on 
more complex cases where we believe improvements in care coordination 
and other care redesign efforts offer the potential for improved 
patient outcomes and more efficient use of resources. Many 
stakeholders, including commenters responding to the March 21, 2017 
IFC, have expressed concerns about the provider burden and challenges 
these new models present. As we noted in the May 19, 2017 final delay 
rule (82 FR 22896), which finalized a January 1, 2018 start date for 
the EPMs and the CR incentive payment model, we would engage in notice 
and comment rulemaking on these models if we believed it to be 
warranted. We also noted that we received 47 submissions in response to 
the March 21, 2017 IFC. These responses contained a mix of in- and out-
of-scope comments (82 FR 22899). In the May 19, 2017 final delay rule 
(82 FR 22897), we noted that in addition to commenting on the change to 
the effective date for the EPMs and CR incentive payment model and 
certain provisions of the CJR model, commenters highlighted concerns 
with the models' design, including but not limited to participation 
requirements, data, pricing, quality measures, episode length, CR and 
skilled nursing facility (SNF) waivers, beneficiary exclusions and 
notification requirements, repayment, coding, and model overlap issues. 
Specifically, many commenters were opposed to the mandatory 
participation requirements, arguing that the mandatory nature of these 
models would force many providers who lack familiarity, experience, or 
proper infrastructure to quickly support care redesign efforts for a 
new bundled payment system. Many commenters were concerned that the 
mandatory nature of these models might harm patients and providers 
before CMS knows how these models might affect access to care, quality 
or outcomes in various locations. Additionally, commenters were 
concerned that unrelated services would be incorporated into episode 
prices under the finalized price setting methodology, which bases 
prices on MS-DRGs and identifies excluded, unrelated services rather 
than included, related services based on clinical review. Commenters 
also expressed concern that this pricing approach would result in 
diagnosis codes that would be classified as included services, when in 
fact these services have no clinical relevance to the episode(s). 
Commenters were further concerned with the fact that CMS will 
progressively incorporate regional data into EPM target prices, where 
100 percent of the EPM target price would be based on regional data by 
performance year 4. Commenters also took issue with the quality 
measures established for the SHFFT model, stating that these measures 
are not clinically related to the target population and are 
inappropriate for use in assessing the care provided to beneficiaries 
in the SHFFT model. In addition, commenters requested revisions to the 
CABG EPM to allow participants the option to use a CABG

[[Page 39313]]

composite score developed by the Society of Thoracic Surgeons (STS) 
rather than the all-cause mortality measure.
    Commenters also expressed concerns about the design of the CR 
incentive payment model waivers. Commenters stated that current direct 
supervision requirements would continue to contribute to a lack of 
access to cardiac rehabilitation services and would inhibit providers' 
ability to redesign care for the CR incentive payment model. Commenters 
suggested broadening the CR physician supervision waiver because the 
current waivers would not cover non-model beneficiaries who might be 
obtaining services concurrently with model participants and are 
therefore not sufficient. Other commenters were concerned with the 
precedence rules for model overlap with Models 2, 3 and 4 of the 
Innovation Center's Bundled Payments for Care Improvement (BPCI) 
initiative.
    In the May 19, 2017 final delay rule (82 FR 22895), we stated that 
we might consider these public comments in future rulemaking. Based on 
our additional review and consideration of this stakeholder feedback, 
we have concluded that certain aspects of the design of the EPMs and 
the CR incentive payment model should be improved and more fully 
developed prior to the start of the models, and that moving forward 
with the implementation of the EPMs and CR incentive payment model as 
put forth in the January 3, 2017 EPM final rule would not be in the 
best interest of beneficiaries or providers at this time. Based on our 
acknowledgment of the many concerns about the design of these models 
articulated by stakeholders, we are proposing to cancel the EPMs and CR 
incentive payment model before they begin. Accordingly, we propose to 
rescind 42 CFR part 512 in its entirety.
    We seek public comment on our proposal to cancel the EPMs and CR 
incentive payment model.
    We note that, if the proposal to cancel the EPMs and CR incentive 
payment model is finalized, providers interested in participating in 
bundled payment models may still have an opportunity to do so during 
calendar year (CY) 2018 via new voluntary bundled payment models. 
Building on the BPCI initiative, the Innovation Center expects to 
develop new voluntary bundled payment model(s) during CY 2018 that 
would be designed to meet the criteria to be an Advanced APM. We also 
note the strong evidence base and other positive stakeholder feedback 
that we have received regarding the CR incentive payment model. As we 
further develop the Innovation Center's portfolio of models, we may 
revisit this model and will consider stakeholder feedback for a 
potential new voluntary initiative.

B. Proposed Changes to the CJR Model Participation Requirements

1. Proposed Voluntary Participation Election (Opt-In) for Certain MSAs 
and Low-Volume and Rural Hospitals
    The CJR model began on April 1, 2016. The CJR model is currently in 
the second performance year, which includes episodes ending on or after 
January 1, 2017 and on or before December 31, 2017. The third 
performance year, which includes all CJR episodes ending on or after 
January 1, 2018 and on or before December 31, 2018, would necessarily 
incorporate episodes beginning before January 2018. The fifth, and 
last, performance year would end on December 31, 2020. Currently, with 
limited exceptions, hospitals located in the 67 geographic areas 
selected for participation in the CJR model must participate in the 
model through December 31, 2020; that is, their participation in the 
CJR model is mandatory unless the hospital is an episode initiator for 
a lower-extremity joint replacement (LEJR) episode in the risk-bearing 
period of Models 2 or 4 of the BPCI initiative. Hospitals with a CCN 
primary address in the 67 selected geographic areas that participated 
in Model 1 of the BPCI initiative, which ended on December 31, 2016, 
began participating in the CJR model when their participation in the 
BPCI initiative ended.
    Based on smaller, voluntary tests of episode-based payment models 
and demonstrations, such as the Acute Care Episode (ACE) demonstration 
and the BPCI initiative, that have indicated a potential to improve 
beneficiaries' care while reducing costs (see ACE evaluation at: 
https://downloads.cms.gov/files/cmmi/ace-evaluationreport-final-5-2-14.pdf and BPCI evaluation at: https://innovation.cms.gov/Files/reports/BPCI-EvalRpt1.pdf), we finalized the CJR model with mandatory 
participation in the 67 selected geographic areas so that we could 
further test delivery of better care at a lower cost across a wide 
range of hospitals, including some hospitals that may not otherwise 
participate, in many locations across the country. In the CJR model 
final rule (80 FR 73276), we stated that we believed that by requiring 
the participation of a large number of hospitals with diverse 
characteristics, the CJR 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.
    After further consideration of stakeholder feedback, including 
responses we received on the March 21, 2017 IFC, we are proposing 
certain revisions to the mandatory participation requirements for the 
CJR model to allow us to continue to evaluate the effects of the model 
while limiting the geographic reach of our current mandatory models. 
Specifically, we are proposing that the CJR model would continue on a 
mandatory basis in approximately half of the selected geographic areas 
(that is, 34 of the 67 selected geographic areas), with an exception 
for low-volume and rural hospitals, and continue on a voluntary basis 
in the other areas (that is, 33 of the 67 selected geographic areas).
    The geographic areas for the CJR model are certain Metropolitan 
Statistical Areas (MSAs) that were selected following the requirements 
in Sec.  510.105 as discussed in the CJR model final rule (80 FR 73297 
through 73299). In Sec.  510.2, an MSA is defined as a core-based 
statistical area associated with at least one urbanized area that has a 
population of at least 50,000. In selecting the 67 MSAs for inclusion 
in the CJR model, the 196 eligible MSAs were stratified into 8 groups 
based on MSA average wage adjusted historic LEJR episode payments and 
MSA population size (80 FR 41207). Specifically, we classified MSAs 
according to their average LEJR episode payment into four categories 
based on the 25th, 50th and 75th percentiles of the distribution of the 
196 potentially selectable MSAs as determined in the exclusion rules as 
applied in the CJR model proposed rule (80 FR 41198). This approach 
ranked the MSAs relative to one another and created four equally sized 
groups of 49. The population distribution was divided at the median 
point for the MSAs eligible for potential selection, creating 8 groups. 
Of the 196 eligible MSAs, we chose 67 MSAs via a stratified random 
selection process as discussed in the CJR model final rule (80 FR 
73291). In reviewing our discussion of the MSA selection and the MSA 
volume needed to provide adequate statistical power to evaluate the 
impact of the model in the CJR model final rule (80 FR 73297), we have 
determined that reducing the mandatory MSA volume in half by selecting 
the 34

[[Page 39314]]

MSAs with the highest average wage-adjusted historic LEJR episode 
payments for continued mandatory participation could still allow us to 
evaluate the effects of the CJR model across a wide range of providers, 
including some that might not otherwise participate in the model. 
Higher payment areas are most likely to have significant room for 
improvement in creating efficiencies and greater variations in practice 
patterns. Thus, the selection of more expensive MSAs is the most 
appropriate approach to fulfilling the overall priorities of the CJR 
model to increase efficiencies and savings for LEJR episodes while 
maintaining or improving the overall quality of care.
    The original determination of the sample size need in the CJR model 
final rule was constructed to be able to observe a 2-percent reduction 
in wage-adjusted episode spending after 1 year. This amount was chosen 
based on the anticipated amount of the discount applied in the target 
price. In considering the degree of certainty that would be needed to 
generate reliable statistical estimates, we assumed a 20 percent chance 
of false positive and a 30 percent chance of a false negative. Using 
these parameters, we determined that the number of MSAs needed ranged 
from 50 to 150. In order to allow for some degree of flexibility, we 
selected 75 MSAs, which were narrowed to 67 due to final exclusion 
criteria.
    As we reviewed the CJR model for this proposed rule, we noted that, 
excluding quarterly reconciliation amounts, evaluation results from 
BPCI Model 2 have indicated possible reductions in fee-for-service 
spending of approximately 3 percent on orthopedic surgery episodes for 
hospitals participating in the LEJR episode bundle. (https://innovation.cms.gov/Files/reports/bpci-models2-4-yr2evalrpt.pdf). We 
examined the sample size needed to detect a 3-percent reduction in CJR 
model episode spending after 1 year using the same methodology as 
described in the CJR model final rule. We determined that we would be 
able to meet this standard with 34 MSAs from the higher cost groups. We 
expect that hospitals in the higher cost MSAs will be able to achieve 
similar 3 percent savings given their MSA's relatively high historic 
episode spending and thus greater opportunities for improvements, and 
their experience in optimizing clinical care pathways to produce 
greater efficacies over the first two performance years of the CJR 
model. We note that the proposed changes to the model, including the 
focus on higher cost MSAs and the reduced number of mandatory MSAs, 
will cause changes to the nature of the evaluation.
    To select the 34 MSAs that would continue to have mandatory 
participation (except for low-volume and rural hospitals), we took the 
distribution of average wage-adjusted historic LEJR episode payments 
for the 67 MSAs using the definition described in the CJR model final 
rule, ordered them sequentially by average wage-adjusted historic LEJR 
episode payments, and then selected the 34 MSAs with the highest 
average payments. Under this proposal to reduce the number of MSAs with 
mandatory participation, the remaining 33 MSAs would no longer be 
subject to the CJR model's mandatory participation requirements; that 
is, hospital participation would be voluntary in these 33 MSAs.
    After dividing the 67 MSAs into 34 mandatory and 33 voluntary MSAs 
as described previously, we examined selected MSA characteristics. In 
order to determine whether a good balance was maintained across MSA 
population size, we examined the number of MSAs below and above the 
median population point of the 196 MSAs eligible for potential 
selection. We observed that a good balance of MSA population size was 
maintained (17 out of 34 mandatory and 17 out of 33 voluntary MSAs had 
a population above the median population). While the 34 MSAs that would 
continue to have mandatory participation have higher spending on 
average, these MSAs all include providers with average cost episodes in 
addition to providers with high cost episodes. In general, we note that 
hospitals located in higher cost areas have a greater potential to 
demonstrate significant decreases in episode spending. However, within 
the higher cost MSAs, there is still significant variation in 
characteristics and experiences of the included hospitals. We 
anticipate the evaluation will be able to assess the generalizability 
of the findings of the CJR model by examining variations of performance 
within the participating hospitals who represent a wide range of 
hospital and market characteristics. Therefore, we are proposing that 
the CJR model would have 34 mandatory participation MSAs (identified in 
Table 1) and 33 voluntary participation MSAs (identified in Table 2) 
for performance years 3, 4, and 5.
    Specifically, we are proposing that, unless an exclusion in Sec.  
510.100(b) applies (that is, for certain hospitals that participate in 
the BPCI initiative), participant hospitals in the proposed 34 
mandatory participation MSAs that are not low-volume or rural (as 
defined in Sec.  510.2 and discussed in the following paragraphs) would 
continue to be required to participate in the CJR model. We are also 
proposing that hospitals in the proposed 33 voluntary participation 
MSAs and hospitals that are low-volume or rural (as defined in Sec.  
510.2 and discussed in the following paragraphs) would have a one-time 
opportunity to notify CMS, in the form and manner specified by CMS, of 
their election to continue their participation in the CJR model on a 
voluntary basis (opt-in) for performance years 3, 4, and 5. Hospitals 
that choose to participate in the CJR model and make a participation 
election that complies with proposed Sec.  510.115 would be subject to 
all model requirements. Hospitals in the proposed 33 voluntary 
participation MSAs and low-volume and rural hospitals (as defined in 
Sec.  510.2 and discussed in the following paragraphs) that do not make 
a participation election would be withdrawn from the CJR model as 
described later in this section of this proposed rule.
    We are proposing to exclude and automatically withdraw low-volume 
hospitals in the proposed 34 mandatory participation MSAs, as 
identified by CMS (see Table 3), from participation in the CJR model 
effective February 1, 2018. Since some low-volume hospitals may want to 
continue their participation in the CJR model, we are proposing to 
allow low-volume hospitals to make a one-time, voluntary participation 
election that complies with the proposed Sec.  510.115 in order for the 
low-volume hospital to continues its participation in the CJR model. We 
are proposing to define a low-volume hospital in Sec.  510.2 as a 
hospital identified by CMS as having fewer than 20 LEJR episodes in 
total across the 3 historical years of data used to calculate the 
performance year 1 CJR episode target prices. Note that under this 
definition, all hospitals listed in Table 3 would meet the definition 
of a low-volume hospital, but this list would not be inclusive of all 
hospitals that could be identified by CMS as a low-volume hospital. For 
example, a new hospital (with a new CCN) that opens in a mandatory MSA 
during the remaining years of the CJR model would not have any LEJR 
episodes during the historical years of data used to calculate the 
performance year 1 CJR episode target prices. Under our proposal, we 
intend that any hospital with a new CCN that comes into existence after 
the proposed voluntary participation election period would not be 
required and/or eligible to join the CJR model. Note that our proposed 
policy for new hospitals

[[Page 39315]]

would not be applicable in the case of a reorganization event where the 
remaining entity is a hospital with a CCN that was participating in the 
CJR model prior to the reorganization event; consistent with our 
current policy, such hospital would continue participation in the CJR 
model regardless of whether all predecessor hospitals were participant 
hospitals prior to the reorganization event.
    We are also proposing to exclude and automatically withdraw rural 
hospitals from participation in the CJR model effective February 1, 
2018. Since some rural hospitals may want to continue their 
participation in the CJR model, we are proposing to allow rural 
hospitals to make a one-time, voluntary participation election that 
complies with the proposed Sec.  510.115 in order for the rural 
hospital to continues its participation in the CJR model. Specifically, 
we are proposing that rural hospitals (as defined in Sec.  510.2) with 
a CCN primary address in the 34 mandatory participation MSAs would have 
a one-time opportunity to opt-in to continue its participation in the 
CJR model during the proposed voluntary participation election period. 
We are proposing that a hospital's change in rural status after the end 
of the voluntary participation election period would not change the 
hospital's CJR model participation requirements. Specifically, we are 
proposing that hospitals in the proposed 34 mandatory participation 
MSAs that are neither low-volume or rural hospitals during the proposed 
voluntary participation election period would be required to 
participate in the CJR model for performance years 3, 4, and 5, and 
that these hospitals would continue to be required to participate in 
the CJR model even if they subsequently become a rural hospital. 
Similarly, we are proposing that a rural hospital that makes a 
voluntary participation election during the one-time opportunity would 
be required to continue participating in the CJR model if that hospital 
no longer meets the definition of rural hospital in Sec.  510.2. We are 
proposing this approach so that CMS can identify the hospitals, by CCN, 
that would participate in the model for the remainder of performance 
year 3 and performance years 4 and 5 at the conclusion of the proposed 
voluntary participation election period and so that there would be less 
confusion about which hospitals are CJR model participants. We seek 
comment on this proposal.

                Table 1--CJR Mandatory Participation MSAs
------------------------------------------------------------------------
                                                           Wage-adjusted
                                                              episode
            MSA                       MSA name             payments (in
                                                                $)
------------------------------------------------------------------------
10420.....................  Akron, OH...................         $28,081
11700.....................  Asheville, NC...............          27,617
12420.....................  Austin-Round Rock, TX.......          28,960
13140.....................  Beaumont-Port Arthur, TX....          32,544
17140.....................  Cincinnati, OH-KY-IN........          28,074
18580.....................  Corpus Christi, TX..........          30,700
20020.....................  Dothan, AL..................          30,710
22500.....................  Florence, SC................          27,901
23540.....................  Gainesville, FL.............          29,370
24780.....................  Greenville, NC..............          27,446
25420.....................  Harrisburg-Carlisle, PA.....          28,360
26300.....................  Hot Springs, AR.............          29,621
28660.....................  Killeen-Temple, TX..........          27,355
31080.....................  Los Angeles-Long Beach-               28,219
                             Anaheim, CA.
31180.....................  Lubbock, TX.................          29,524
32820.....................  Memphis, TN-MS-AR...........          28,916
33100.....................  Miami-Fort Lauderdale-West            33,072
                             Palm Beach, FL.
33740.....................  Monroe, LA..................          30,431
33860.....................  Montgomery, AL..............          30,817
35300.....................  New Haven-Milford, CT.......          27,529
35380.....................  New Orleans-Metairie, LA....          29,562
35620.....................  New York-Newark-Jersey City,          31,076
                             NY-NJ-PA.
36420.....................  Oklahoma City, OK...........          27,267
36740.....................  Orlando-Kissimmee-Sanford,            29,259
                             FL.
37860.....................  Pensacola-Ferry Pass-Brent,           29,485
                             FL.
38300.....................  Pittsburgh, PA..............          30,886
38940.....................  Port St. Lucie, FL..........          30,423
39340.....................  Provo-Orem, UT..............          28,852
39740.....................  Reading, PA.................          28,679
42680.....................  Sebastian-Vero Beach, FL....          28,015
45300.....................  Tampa-St. Petersburg-                 32,424
                             Clearwater, FL.
45780.....................  Toledo, OH..................          28,658
46220.....................  Tuscaloosa, AL..............          31,789
46340.....................  Tyler, TX...................          30,955
------------------------------------------------------------------------


                Table 2--CJR Voluntary Participation MSAs
------------------------------------------------------------------------
                                                           Wage-adjusted
                                                              episode
            MSA                       MSA name             payments (in
                                                                $)
------------------------------------------------------------------------
10740.....................  Albuquerque, NM.............         $25,892
12020.....................  Athens-Clarke County, GA....          25,394

[[Page 39316]]

 
13900.....................  Bismarck, ND................          22,479
14500.....................  Boulder, CO.................          24,115
15380.....................  Buffalo-Cheektowaga-Niagara           26,037
                             Falls, NY.
16020.....................  Cape Girardeau, MO-IL.......          24,564
16180.....................  Carson City, NV.............          26,128
16740.....................  Charlotte-Concord-Gastonia,           26,736
                             NC-SC.
17860.....................  Columbia, MO................          25,558
19500.....................  Decatur, IL.................          24,846
19740.....................  Denver-Aurora-Lakewood, CO..          26,119
20500.....................  Durham-Chapel Hill, NC......          25,151
22420.....................  Flint, MI...................          24,807
23580.....................  Gainesville, GA.............          23,009
26900.....................  Indianapolis-Carmel-                  25,841
                             Anderson, IN.
28140.....................  Kansas City, MO-KS..........          27,261
30700.....................  Lincoln, NE.................          27,173
31540.....................  Madison, WI.................          24,442
33340.....................  Milwaukee-Waukesha-West               25,698
                             Allis, WI.
33700.....................  Modesto, CA.................          24,819
34940.....................  Naples-Immokalee-Marco                27,120
                             Island, FL.
34980.....................  Nashville-Davidson-                   26,880
                             Murfreesboro-Franklin, TN.
35980.....................  Norwich-New London, CT......          25,780
36260.....................  Ogden-Clearfield, UT........          25,472
38900.....................  Portland-Vancouver-                   22,604
                             Hillsboro, OR-WA.
40980.....................  Saginaw, MI.................          25,488
41180.....................  St. Louis, MO-IL............          26,425
41860.....................  San Francisco-Oakland-                23,716
                             Hayward, CA.
42660.....................  Seattle-Tacoma-Bellevue, WA.          23,669
43780.....................  South Bend-Mishawaka, IN-MI.          23,143
44420.....................  Staunton-Waynesboro, VA.....          25,539
45820.....................  Topeka, KS..................          24,273
48620.....................  Wichita, KS.................          25,945
------------------------------------------------------------------------


 Table 3--Low-Volume Hospitals Located In the Mandatory MSAs Eligible To Opt-In During Voluntary Election Period
----------------------------------------------------------------------------------------------------------------
        CCN            Hospital name         MSA                               MSA Title
----------------------------------------------------------------------------------------------------------------
010034.............  Community                  33860  Montgomery, AL.
                      Hospital, Inc.
010062.............  Wiregrass                  20020  Dothan, AL.
                      Medical Center.
010095.............  Hale County                46220  Tuscaloosa, AL.
                      Hospital.
010097.............  Elmore Community           33860  Montgomery, AL.
                      Hospital.
010108.............  Prattville                 33860  Montgomery, AL.
                      Baptist
                      Hospital.
010109.............  Pickens County             46220  Tuscaloosa, AL.
                      Medical Center.
010149.............  Baptist Medical            33860  Montgomery, AL.
                      Center East.
040132.............  Leo N. Levi                26300  Hot Springs, AR.
                      National
                      Arthritis
                      Hospital.
050040.............  LAC-Olive View-            31080  Los Angeles-Long Beach-Anaheim, CA.
                      UCLA Medical
                      Center.
050091.............  Community                  31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital of
                      Huntington Park.
050137.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-
                      Panorama City.
050138.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-Los
                      Angeles.
050139.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-Downey.
050158.............  Encino Hospital            31080  Los Angeles-Long Beach-Anaheim, CA.
                      Medical Center.
050205.............  Glendora                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Community
                      Hospital.
050373.............  LAC+USC Medical            31080  Los Angeles-Long Beach-Anaheim, CA.
                      Center.
050378.............  Pacifica                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital of the
                      Valley.
050411.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-South
                      Bay.
050468.............  Memorial                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital of
                      Gardena.
050543.............  College Hospital           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Costa Mesa.
050548.............  Fairview                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Developmental
                      Center.
050552.............  Motion Picture &           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Television
                      Hospital.
050561.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-West
                      Los Angeles.
050609.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-Orange
                      County-Anaheim.
050641.............  East Los Angeles           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Doctors
                      Hospital.
050677.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-
                      Woodland Hills.
050723.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-
                      Baldwin Park.
050738.............  Greater El Monte           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Community
                      Hospital.
050744.............  Anaheim Global             31080  Los Angeles-Long Beach-Anaheim, CA.
                      Medical Center.
050747.............  South Coast                31080  Los Angeles-Long Beach-Anaheim, CA.
                      Global Medical
                      Center.
050751.............  Miracle Mile               31080  Los Angeles-Long Beach-Anaheim, CA.
                      Medical Center.

[[Page 39317]]

 
050771.............  Coast Plaza                31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital.
050776.............  College Medical            31080  Los Angeles-Long Beach-Anaheim, CA.
                      Center.
050779.............  Martin Luther              31080  Los Angeles-Long Beach-Anaheim, CA.
                      King Jr.
                      Community
                      Hospital.
050780.............  Foothill Medical           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Center.
050782.............  Casa Colina                31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital.
070038.............  Connecticut                35300  New Haven-Milford, CT.
                      Hospice Inc.
070039.............  Masonic Home and           35300  New Haven-Milford, CT.
                      Hospital.
100048.............  Jay Hospital....           37860  Pensacola-Ferry Pass-Brent, FL.
100130.............  Lakeside Medical           33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      Center.
100240.............  Anne Bates Leach           33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      Eye Hospital.
100277.............  Douglas Gardens            33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      Hospital.
100320.............  Poinciana                  36740  Orlando-Kissimmee-Sanford, FL.
                      Medical Center.
100326.............  Promise Hospital           33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      of Miami.
190005.............  University                 35380  New Orleans-Metairie, LA.
                      Medical Center
                      New Orleans.
190011.............  University                 33740  Monroe, LA.
                      Health Conway.
190079.............  St. Charles                35380  New Orleans-Metairie, LA.
                      Parish Hospital.
190245.............  Monroe Surgical            33740  Monroe, LA.
                      Hospital.
190300.............  St. Charles                35380  New Orleans-Metairie, LA.
                      Surgical
                      Hospital LLC.
190302.............  Omega Hospital             35380  New Orleans-Metairie, LA.
                      LLC.
190308.............  St. Bernard                35380  New Orleans-Metairie, LA.
                      Parish Hospital.
190313.............  New Orleans East           35380  New Orleans-Metairie, LA.
                      Hospital.
250012.............  Alliance                   32820  Memphis, TN-MS-AR.
                      Healthcare
                      System.
250126.............  North Oak                  32820  Memphis, TN-MS-AR.
                      Regional
                      Medical Center.
250167.............  Methodist Olive            32820  Memphis, TN-MS-AR.
                      Branch Hospital.
310058.............  Bergen Regional            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Medical Center.
330080.............  Lincoln Medical            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      & Mental Health
                      Center.
330086.............  Montefiore Mount           35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Vernon Hospital.
330100.............  New York Eye and           35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Ear Infirmary.
330199.............  Metropolitan               35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital Center.
330231.............  Queens Hospital            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Center.
330233.............  Brookdale                  35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital
                      Medical Center.
330240.............  Harlem Hospital            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Center.
330385.............  North Central              35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Bronx Hospital.
330396.............  Woodhull Medical           35620  New York-Newark-Jersey City, NY-NJ-PA.
                      and Mental
                      Health Center.
330397.............  Interfaith                 35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Medical Center.
330399.............  St. Barnabas               35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital.
330405.............  Helen Hayes                35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital.
360241.............  Edwin Shaw Rehab           10420  Akron, OH.
                      Institute.
370011.............  Mercy Hospital             36420  Oklahoma City, OK.
                      El Reno Inc..
370158.............  Purcell                    36420  Oklahoma City, OK.
                      Municipal
                      Hospital.
370199.............  Lakeside Women's           36420  Oklahoma City, OK.
                      Hospital A
                      Member of
                      INTEGRIS Health.
370206.............  Oklahoma Spine             36420  Oklahoma City, OK.
                      Hospital.
370215.............  Oklahoma Heart             36420  Oklahoma City, OK.
                      Hospital.
370234.............  Oklahoma Heart             36420  Oklahoma City, OK.
                      Hospital South.
390184.............  Highlands                  38300  Pittsburgh, PA.
                      Hospital.
390217.............  Excela Health              38300  Pittsburgh, PA.
                      Frick Hospital.
420057.............  McLeod Medical             22500  Florence, SC.
                      Center-
                      Darlington.
420066.............  Lake City                  22500  Florence, SC.
                      Community
                      Hospital.
440131.............  Baptist Memorial           32820  Memphis, TN-MS-AR.
                      Hospital Tipton.
450143.............  Seton Smithville           12420  Austin-Round Rock, TX.
                      Regional
                      Hospital.
450605.............  Care Regional              18580  Corpus Christi, TX.
                      Medical Center.
450690.............  University of              46340  Tyler, TX.
                      Texas Health
                      Science Center
                      at Tyler.
450865.............  Seton Southwest            12420  Austin-Round Rock, TX.
                      Hospital.
460043.............  Orem Community             39340  Provo-Orem, UT.
                      Hospital.
670087.............  Baylor Scott &             12420  Austin-Round Rock, TX.
                      White Emergency
                      Medical Center-
                      Cedar Park.
----------------------------------------------------------------------------------------------------------------

    As stated previously in this section, we are proposing a one-time 
participation election period for hospitals with a CCN primary address 
located in the voluntary participation MSAs listed in Table 2, low-
volume hospitals specified in Table 3, and rural hospitals in the 
mandatory participation MSAs. Based on the anticipated timing for when 
the final rule implementing this proposal would be published, we 
propose that the voluntary participation election period would begin 
January 1, 2018, and would end January 31, 2018. We must receive the 
participation election letter no later than January 31, 2018. We are 
proposing that the hospital's participation election letter would serve 
as the model participant agreement. Voluntary participation would begin 
February 1, 2018, and continue through the end of the CJR model, unless 
sooner terminated. Thus, participant hospitals located in the voluntary 
participation MSAs listed in Table 2, the low-volume hospitals 
specified in Table 3, and the rural hospitals in the 34 mandatory 
participation MSAs that elect voluntary participation would continue in 
the CJR

[[Page 39318]]

model without any disruption to episodes attributed to performance year 
3, which begins January 1, 2018. Participant hospitals located in the 
voluntary participation MSAs listed in Table 2, the low-volume 
hospitals specified in Table 3, and the rural hospitals in the 34 
mandatory participation MSAs that do not elect voluntary participation 
would be withdrawn from the model effective February 1, 2018, and all 
of their performance year 3 episodes up to and including that date 
would be canceled, so that these hospitals would not be subject to a 
reconciliation payment or repayment amount for performance year 3. We 
are proposing to implement our proposed opt-in approach in this manner 
as a way to balance several goals, including establishing a uniform 
time period for hospitals to make a voluntary participation election, 
avoiding disruption of episodes for hospitals that elect to continue 
their participation in the CJR model, and preventing confusion about 
whether a hospital is participating in performance year 3 of the model. 
Specifically, we considered whether adopting a voluntary election 
period that ended prior to the start of performance year 3 would be 
less confusing and less administratively burdensome in terms of whether 
a hospital is participating in performance year 3. To implement this 
approach, the voluntary participation election period would have to 
close by December 31, 2017, such that each hospital would have made its 
determination regarding participation in performance year 3 before the 
start of performance year 3 (note that episodes attributed to 
performance year 3 would still be canceled under this alternative 
approach for eligible hospitals that do not make a participation 
election). Because the voluntary election period under this approach 
would conclude in advance of the relevant CJR model performance year, 
this approach could simplify our administration of performance year 3 
by establishing in advance of performance year 3 whether a hospital 
would be a participant hospital for the totality of performance year 3. 
However, given the timing of this proposed rulemaking, we were not 
confident that hospitals would have sufficient time to make a voluntary 
participation election by December 31, 2017. Thus, we are proposing 
that the voluntary participation election period would occur during the 
first month of performance year 3 (that is, throughout January 2018) 
and would apply prospectively beginning on February 1, 2018. We believe 
this approach will best ensure adequate time for hospitals to make a 
participation election while minimizing the time period during which 
participation in performance year 3 remains mandatory for all eligible 
hospitals in the 67 selected MSAs. We note that based on timing 
considerations, including potential changes to the anticipated date of 
publication of the final rule, we may modify the dates of the voluntary 
participation election period and make conforming changes to the dates 
for voluntary participation in performance year 3. We seek comment on 
the proposed voluntary participation election period, including whether 
we should instead require the participation election to be made by 
December 31, 2017 (that is, prior to the start of performance year 3) 
or if a different or later voluntary election period may be preferable.
    To specify their participation election, we are proposing that 
hospitals would submit a written participation election letter to CMS 
in a form and manner specified by CMS. We intend to provide templates 
that can easily be completed and submitted in order to limit the burden 
on hospitals seeking to opt-in. If a hospital with a CCN primary 
address located in the voluntary participation MSAs or a low-volume or 
rural hospital in the mandatory participation MSAs does not submit a 
written participation election letter by January 31, 2018, the 
hospital's participation in performance year 3 would end, all of its 
performance year 3 episodes would be canceled, and it would not be 
included in the CJR model for performance years 4 and 5.
    We are proposing a number of requirements for the participation 
election letter and that the hospital's participation election letter 
would serve as the model participant agreement. First, we are proposing 
that the participation election letter must include all of the 
following:
     Hospital Name.
     Hospital Address.
     Hospital CCN.
     Hospital contact name, telephone number, and email 
address.
     If selecting the Advanced APM track, attestation of CEHRT 
use as defined in Sec.  414.1305.
    Second, we are proposing that the participation election letter 
must include a certification in a form and manner specific by CMS 
that--
     The hospital will comply with all requirements of the CJR 
model (that is, 42 CFR 510) and all other laws and regulations that are 
applicable to its participation in the CJR model; and
     Any data or information submitted to CMS will be accurate, 
complete and truthful, including, but not limited to, the participation 
election letter and any quality data or other information that CMS uses 
in reconciliation processes or payment calculations or both.
    We solicit feedback on this proposed certification requirement, 
including whether the certification should include different or 
additional attestations.
    Finally, we are proposing that the participation election letter be 
signed by the hospital administrator, chief financial officer (CFO) or 
chief executive officer (CEO).
    We are proposing that, if the hospital's participation election 
letter meets these criteria, we would accept the hospital's 
participation election. Once a participation election for the CJR model 
is made and is effective, the participant hospital would be required to 
participate in all activities related to the CJR model for the 
remainder of the CJR model unless the hospital's participation is 
terminated sooner.
    We note that episodes end 90 days after discharge for the CJR model 
and episodes that do not start and end in the same calendar year will 
be attributed to the following performance year. For example, episodes 
that start in October 2017 and do not end on or before December 31, 
2017 are attributed to performance year 3. Our methodology for 
attributing these episodes to the subsequent performance year would be 
problematic in cases where a hospital with a CCN primary address 
located in a voluntary participation MSA or a rural hospital or a low-
volume hospital, as specified by CMS, has not elected to voluntarily 
continue participating in the model. Therefore, for a hospital with a 
CCN primary address located in a voluntary participation MSA, or a 
rural hospital or a low-volume hospital, as specified by CMS, that does 
not elect voluntary participation during the one-time voluntary 
participation election period, we are proposing that all episodes 
attributed to performance year 3 for that hospital would be canceled 
and would not be included in payment reconciliation. Such hospitals 
would have their participation in the CJR model withdrawn effective 
February 1, 2018. We note that this proposal is consistent with our 
policy for treatment of episodes that have not ended by or on the last 
day of performance year 5 and cannot be included in performance year 5 
reconciliation due to the end of the model (see Table 8 of the CJR 
model final rule (80 FR 73326)).
    We are proposing to define a low-volume hospital, mandatory MSA, 
and voluntary MSA, to change the definition of participant hospital in 
Sec.  510.2, and to amend the specification of the

[[Page 39319]]

geographic areas in Sec.  510.105(a) to reflect the establishment of 
mandatory and voluntary participation MSAs. We are proposing to codify 
the opt-in proposal in new Sec.  510.115. In addition, we are proposing 
to post the list of mandatory participation MSAs, voluntary 
participation MSAs, and low-volume hospitals on the CJR model Web site.
    We believe our proposed opt-in approach to allow for voluntary 
participation in the CJR model by certain hospitals would be less 
burdensome on such hospitals than a potential alternative approach of 
requiring hospitals to opt-out of the model. In developing the proposal 
to allow eligible hospitals located in the proposed 33 voluntary 
participation MSAs and low-volume and rural hospitals located in the 34 
mandatory participation MSAs to elect voluntary participation, we 
considered whether to propose that hospitals would have to make an 
affirmative voluntary participation election (that is, an opt-in 
approach) or to propose that these hospitals would continue to be 
required to participate in the CJR model unless written notification 
was given to CMS to withdraw the hospital from the CJR model (that is, 
an opt-out approach). We believe an opt-in approach would be less 
burdensome on hospitals, because it would not require participation in 
the CJR model for hospitals located in the proposed 33 voluntary 
participation MSAs and for low-volume and rural hospitals located in 
the 34 mandatory participation MSAs unless the hospital affirmatively 
chose it. Further, we believe requiring an affirmative opt-in election 
would result in less ambiguity about a hospital's participation 
intentions as compared to an opt-out approach. Specifically, with an 
opt-in approach, a hospital's participation election would document 
each hospital's choice, whereas under an opt-out approach there could 
be instances where hospitals fail to timely notify CMS of their desire 
to withdraw from participation and are thus included in the model and 
subject to potential repayment amounts. For these reasons, we have 
proposed an opt-in approach. We seek comment on this proposal and the 
alternative considered.
    We also believe that our proposed approach to make the CJR model 
primarily concentrated in the higher cost MSAs where the opportunity 
for further efficiencies and care redesign may be more likely and allow 
voluntary participation in the lower cost MSAs and for low-volume and 
rural hospitals allows the Innovation Center to focus on areas where 
the opportunity for further efficiencies and care redesign may be more 
likely, while still allowing hospitals in the voluntary MSAs the 
opportunity to participate in the model. In developing this proposed 
rule, we considered that hospitals in the CJR model have been 
participating for over a year and a half as of the timing of this 
proposed rule, and we have begun to give hospitals in the model 
financial and quality results from the first performance year. In many 
cases, participant hospitals have made investments in care redesign, 
and we want to recognize such investments and commitments to 
improvement while reducing the overall number of hospitals that are 
required to participate. We also considered stakeholder feedback that 
suggested we make participation in the CJR model voluntary, and the 
model size necessary to detect at least a 3-percent reduction in LEJR 
episode spending. Taking these considerations into account, we 
considered whether revising the model to allow for voluntary 
participation in all, some, or none of the 67 selected MSAs would be 
feasible.
    As discussed in section V. of this proposed rule, the estimated 
impact of the changes to the CJR model proposed in this proposed rule 
reduces the overall estimated savings for performance years 3, 4, and 5 
by $90 million. If voluntary participation was allowed in all of the 67 
selected MSAs, the overall estimated model impact would no longer show 
savings, and would likely result in additional costs to the Medicare 
program. If participation was limited to the proposed 34 mandatory 
participation MSAs and voluntary participation was not allowed in any 
MSA, the impact to the overall estimated model savings over the last 
three years of the model would be closer to $30 million than the $90 
million estimate presented in section V. of this proposed rule, because 
our modeling, which does not include assumptions about behavioral 
changes that might lower fee-for-service spending, estimates that 60 to 
80 hospitals will choose voluntary participation. Since we estimate 
that these potential voluntary participants would be expected to earn 
only positive reconciliation payments under the model, these positive 
reconciliation payments would offset some of the savings garnered from 
mandatory participants. However, as many current hospital participants 
in all of the 67 MSAs are actively invested in the CJR model, we are 
proposing to allow voluntary participation in the 33 MSAs that were not 
selected for mandatory participation and for low-volume and rural 
hospitals. We seek comment on our proposed approach and the 
alternatives considered.
    A summary of the proposed changes to the CJR model participation 
requirements is shown in Table 4.

                   Table 4--Proposed Participation Requirements for Hospitals in the CJR Model
----------------------------------------------------------------------------------------------------------------
                                     Required to                                                       Election
                                  participate as of     May elect  voluntary       Participation      effective
                                  February 1, 2018          participation         election period        date
----------------------------------------------------------------------------------------------------------------
                                          Mandatory Participation MSAs
----------------------------------------------------------------------------------------------------------------
All IPPS participant           Yes...................  No....................                   n/a          n/a
 hospitals, except rural and
 low-volume *.
Rural hospitals *............  No....................  Yes...................    1/1/2018-1/31/2018     2/1/2018
Low-volume hospitals (see      No....................  Yes...................    1/1/2018-1/31/2018     2/1/2018
 Table 3).
----------------------------------------------------------------------------------------------------------------
                                          Voluntary Participation MSAs
----------------------------------------------------------------------------------------------------------------
All IPPS participant           No....................  Yes...................    1/1/2018-1/31/2018     2/1/2018
 hospitals.
----------------------------------------------------------------------------------------------------------------
* Note: Participation requirements are based on the CCN status of the hospital as of January 31, 2018. A change
  in rural status after the voluntary election period does not affect the participation requirements.


[[Page 39320]]

2. Proposed Codification of CJR Model-Related Evaluation Participation 
Requirements
    We note that for the CJR model evaluation, the data collection 
methods and key evaluation research questions under the proposed 
reformulated approach (that is, the proposal for voluntary opt-in 
elections discussed in section III.B.1 of this proposed rule) would 
remain similar to the approach presented in the CJR model final rule. 
The evaluation methodology for the CJR model would be consistent with 
the standard Innovation Center approaches we have taken in other 
voluntary models such as the Pioneer Accountable Care Organization 
(ACO) Model. Cooperation and participation in model-related activities 
by all hospitals that participate in the CJR model would continue to be 
extremely important to the evaluation. Therefore, with respect to 
model-related evaluation activities, we propose to add provisions in 
Sec.  510.410(b)(1)(i)(G) to specify that CMS may take remedial action 
if a participant hospital, or one of its collaborator, collaboration 
agent, or downstream collaboration agent fails to participate in model-
related evaluation activities conducted by CMS and/or its contractors 
for any performance year in which the hospital participates. We believe 
the addition of this provision would make participation and 
collaboration requirements for the CJR model evaluation clear to all 
participant hospitals and in particular to hospitals that are eligible 
to elect voluntary participation. We seek comment on our proposed 
regulatory change.
3. Comment Solicitation: Incentivizing Participation in the CJR Model
    In this proposed rule, we are proposing to make participation in 
the CJR model voluntary in 33 MSAs and for low-volume and rural 
hospitals in the remaining 34 MSAs via the proposed opt-in election 
policy discussed in section III.B.1 of this proposed rule. In order to 
keep hospitals in all MSAs selected for participation in the CJR model 
actively participating in the model, we are soliciting comment on ways 
to further incentivize eligible hospitals to elect to continue 
participating in the CJR model for the remaining years of the model and 
to further incentivize all participant hospitals to advance care 
improvements, innovation, and quality for beneficiaries throughout LEJR 
episodes.
    Additionally, we note that, under the CJR refinements established 
in the January 3, 2017 EPM final rule, the total amount of gainsharing 
payments for a performance year paid to physicians, non-physician 
practitioners, physician group practices (PGPs), and non-physician 
practitioner group practices (NPPGPs) must not exceed 50 percent of the 
total Medicare approved amounts under the Physician Fee Schedule for 
items and services that are furnished to beneficiaries during episodes 
that occurred during the same performance year for which the CJR 
participant hospital accrued the internal cost savings or earned the 
reconciliation payment that comprises the gainsharing payment being 
made (Sec.  510.500(c)(4)). Similarly, distribution arrangements are 
limited as specified in Sec.  510.505(b)(8), and downstream 
distribution arrangements are limited as specified in Sec.  
510.506(b)(8). These program integrity safeguards, which are consistent 
with the gainsharing caps in other Innovation Center models, were 
included to avoid setting an inappropriate financial incentive that may 
result in stinting, steering or denial of medically necessary care (80 
FR 73415 and 73416). While we are not proposing in this rule any 
changes to the gainsharing caps for these models, we have heard various 
opinions from stakeholders, including the Medicare Payment Advisory 
Commission (MedPAC), on the relative benefit of such limitations on 
gainsharing and in this proposed rule we are soliciting comment on this 
requirement and any alternative gainsharing caps that may be 
appropriate to apply to physicians, non-physician practitioners, PGPs, 
and NPPGPs.

C. Maintaining ICD-CM Codes for Quality Measures

    In the CJR model final rule (80 FR 73474), we discussed how 
specific International Classification of Diseases (ICD)--Clinical 
Modifications (CM) procedure codes define group of procedures included 
in the Hospital-level risk-standardized complication rate (RSCR) 
following elective primary total hip arthroplasty (THA) and/or total 
knee arthroplasty (TKA) (NQF #1550) (Hip/Knee Complications) measure. 
In discussing quality measures in general, the ICD-CM codes relative to 
defining a measure cohort are updated annually and are subject to 
change. For example, in the EPM final rule (82 FR 389), we itemized 
specific ICD-9-CM and ICD-10-CM codes for Hip/Knee Complications 
measure. As quality measures are refined and maintained, the ICD-CM 
code values used to identify the relevant diagnosis and/or procedures 
included in quality measures can be updated. For example, CMS' Center 
for Clinical Standards and Quality (CCSQ) has recently updated the list 
of ICD-10 codes used to identify procedures included in the Hip/Knee 
Complications measure. We did not intend for our preamble discussions 
of certain ICD-CM codes used, for example, to identify procedures 
included in the Hip/Knee Complications measures, and therefore the PRO 
cohorts for the CJR model, to set a policy that would define the 
relevant cohorts for the entirety of the CJR model. We should have also 
directed readers to look for the most current codes on the CMS quality 
Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html. 
To ensure that model participants are aware of periodic ICD-CM code 
updates to the Hip/Knee Complications measure, we are proposing to 
clarify that participants must use the applicable ICD-CM code set that 
is updated and released to the public each calendar year in April by 
CCSQ and posted on the Hospital Quality Initiative Measure Methodology 
Web site (https://www.cms.gov/medicare/Quality-Initiatives-Patient-
Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html) 
for purposes of reporting each of those measures. CMS relies on the 
National Quality Forum (NQF) measure maintenance update and review 
processes to update substantive aspects of measures every 3 years. 
Through NQF's measure maintenance process, NQF endorsed measures are 
sometimes updated to incorporate changes that we believe do not 
substantially change the nature of the measures. Examples of such 
changes include updated diagnosis or procedures codes, changes to 
patient population, definitions, or extension of the measure 
endorsement to apply to other settings. We believe these types of 
maintenance changes are distinct from more substantive changes and do 
not require the use of the agency's regulatory process used to update 
more detailed aspects of quality measures.

D. Clarification of CJR Reconciliation Following Hospital 
Reorganization Event

    In the CJR model final rule (80 FR 73348) rule, we discussed our 
method of setting target prices using all historical episodes that 
would represent our best estimate of historical volume and payments for 
participant hospitals when an acquisition, merger, divestiture, or 
other reorganization results in a hospital with a new CCN. When a 
reorganization event occurs during a performance year,

[[Page 39321]]

CMS updates the quality-adjusted episode target prices for the new or 
surviving participant hospital (Sec.  510.300(b)(4)). Following the end 
of a performance year, CMS performs annual reconciliation calculations 
in accordance with the provisions established in Sec.  510.305. The 
annual reconciliation calculations are specific to the episodes 
attributable to each participant hospital entity for that performance 
year. The applicable quality-adjusted episode target price for such 
episodes is the quality-adjusted episode target price that applies to 
the episode type as of the anchor hospitalization admission date (Sec.  
510.300(a)(3)). For example, if during a performance year, two 
participant hospitals (Hospital A and Hospital B) merge under the CCN 
of one of those two participant hospital's CCN (Hospital B's CCN), 
(assuming no other considerations apply) three initial (and three 
subsequent) annual reconciliation calculations for that performance 
year are performed: An initial (and subsequent) reconciliation for 
Hospital A for the episodes where the anchor hospitalization admission 
occurred prior to the merger (as determined by the CCN on the IPPS 
claim), using Hospital A's episode target price for that time period; 
an initial (and subsequent) reconciliation for Hospital B for the 
episodes where anchor hospitalization admission occurred before the 
merger (as determined by the CCN on the IPPS claim), using Hospital B's 
episode target price for that time period; and an initial (and 
subsequent) reconciliation for the post-merger entity (merged Hospitals 
A and B) for the episodes where anchor hospitalization admission 
occurred on or after the merger's effective date, using the episode 
target price that time period. Reorganization events that involve a CJR 
model participant hospital and a hospital that is not participating in 
the CJR model and result in the new organization operating under the 
CJR participant hospital's CCN, would not affect the reconciliation for 
the CJR participant hospital for episodes that initiate before the 
effective date of the reorganization event. Episodes that initiate 
after such reorganization event would be subject to an updated quality-
adjusted episode target price that is based on historical episodes for 
the CJR participant hospital which would include historical episode 
expenditures for all hospitals that are integrated under the surviving 
CCN. These policies have been in effect since the start of the CJR 
model on April 1, 2016. To further clarify this policy for the CJR 
model, we propose to add a provision specifying that separate 
reconciliation calculations are performed for episodes that occur 
before and after a reorganization that results in a hospital with a new 
CCN at Sec.  510.305(d)(1). We believe this clarification would 
increase transparency and understanding of the payment reconciliation 
processes for the CJR model. We seek comment on this proposal.

E. Proposed Adjustment to the Pricing Calculation for the CJR 
Telehealth HCPCS Codes To Include the Facility PE Values

    In the CJR model final rule (80 FR 73450), we established 9 HCPCS 
G-codes to report home telehealth evaluation and management (E/M) 
visits furnished under the CJR telehealth waiver as displayed in Table 
5. These codes have been payable for CJR model beneficiaries since the 
CJR model began on April 1, 2016. Pricing for these 9 codes is updated 
each calendar year to reflect the work and malpractice (MP) relative 
value units (RVUs) for the comparable office and other outpatient E/M 
visit codes on the Medicare Physician Fee Schedule (MPFS). As we stated 
in the CJR model final rule (80 FR 73450), in finalizing this pricing 
method for these codes, we did not include the practice expense (PE) 
RVUs of the comparable office and other outpatient E/M visit codes in 
the payment rate for these unique CJR model services, based on the 
belief that practice expenses incurred to furnish these services are 
marginal or are paid for through other MPFS services. However, since 
the publication of the CJR model final rule, stakeholders have 
expressed concern that the zero value assigned to the PE RVUs for these 
codes results in inaccurate pricing. Stakeholders assert that there are 
additional costs related to the delivery of telehealth services under 
the CJR model such as maintaining the telecommunications equipment, 
software and security and that, while these practice expense costs are 
not equivalent to in-person service delivery costs, they are greater 
than zero. In considering the pricing concerns voiced by stakeholders, 
we recognize that there are resource costs in practice expense for 
telehealth services furnished remotely, however, we do not believe the 
current PE methodology and data accurately account for these costs 
relative to the PE resource costs for other services. This belief 
previously led us to assign zero PE RVUs in valuing these services, but 
because we recognize that there are some costs that are not being 
accounted for by the current pricing for these CJR model codes, we 
believe an alternative to assigning zero PE RVUs would be to use the 
facility PE RVUs for the analogous in-person services. While we 
acknowledge that assigning the facility PE RVUs would not provide a 
perfect reflection of practice resource costs for remote telehealth 
services under the CJR model, in the absence of more specific 
information, we believe it is likely a better proxy for such PE costs 
than zero. Therefore, we are proposing to use the facility PE RVUs for 
the analogous services in pricing the 9 CJR HCPCS G codes shown in 
Table 5. Additionally, we are proposing to revise Sec.  510.605(c)(2) 
to reflect the addition of the RVUs for comparable codes for the 
facility PE to the work and MP RVUs we are currently using for the 
basis for payment of the CJR telehealth waiver G codes.

[[Page 39322]]



                          Table 5--HCPCS Codes for Telehealth Visits for CJR Model Beneficiaries in Home or Place of Residence
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Work and MP RVUs equal to
                                                                                                                              those of the corresponding
                                                                                                                             office/outpatient E/M visit
     HCPCS  Code No.                       Long descriptor                                  Short descriptor                  CPT code for same calendar
                                                                                                                             year under the PFS; PE RVUs
                                                                                                                                equal to the facility
                                                                                                                                   values for each
--------------------------------------------------------------------------------------------------------------------------------------------------------
G9481....................  Remote in-home visit for the evaluation and      Remote E/M new pt 10 mins......................                        99201
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                            A problem focused history.............
                            A problem focused examination.........
                            Straightforward medical decision
                            making, furnished in real time using
                            interactive audio and video technology..
                           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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            self limited or minor. Typically, 10 minutes
                            are spent with the patient or family or both
                            via real time, audio and video
                            intercommunications technology.
G9482....................  Remote in-home visit for the evaluation and      Remote E/M new pt 20 mins......................                        99202
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                            An expanded problem focused history...
                            An expanded problem focused
                            examination..
                            Straightforward medical decision
                            making, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of low to moderate severity. Typically, 20
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9483....................  Remote in-home visit for the evaluation and      Remote E/M new pt 30 mins......................                        99203
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                            A detailed history....................
                            A detailed examination................
                            Medical decision making of low
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate severity. Typically, 30 minutes
                            are spent with the patient or family or both
                            via real time, audio and video
                            intercommunications technology.
G9484....................  Remote in-home visit for the evaluation and      Remote E/M new pt 45 mins......................                        99204
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                            A comprehensive history...............
                            A comprehensive examination...........

[[Page 39323]]

 
                            Medical decision making of moderate
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 45
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9485....................  Remote in-home visit for the evaluation and      Remote E/M new pt 60 mins......................                        99205
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                            A comprehensive history...............
                            A comprehensive examination...........
                            Medical decision making of high
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 60
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9486....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 10 mins.....................                        99212
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                            A problem focused history.............
                            A problem focused examination.........
                            Straightforward medical decision
                            making, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            self limited or minor. Typically, 10 minutes
                            are spent with the patient or family or both
                            via real time, audio and video
                            intercommunications technology.
G9487....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 15 mins.....................                        99213
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, 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, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family 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.

[[Page 39324]]

 
G9488....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 25 mins.....................                        99214
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                            A detailed history....................
                            A detailed examination................
                            Medical decision making of moderate
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 25
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9489....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 40 mins.....................                        99215
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                            A comprehensive history...............
                            A comprehensive examination...........
                            Medical decision making of high
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            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 needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 40
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
--------------------------------------------------------------------------------------------------------------------------------------------------------

F. Clinician Engagement Lists

1. Background for Submission of Clinician Engagement Lists
    Under the Quality Payment Program, the Advanced APM track of the 
CJR model does not include eligible clinicians on a Participation List; 
rather the CJR Advanced APM track currently includes eligible 
clinicians on an Affiliated Practitioner List as defined under Sec.  
414.1305 and described under Sec.  414.1425(a)(2) of the agency's 
Quality Payment Program regulations. As such, the Affiliated 
Practitioner List for the CJR model is the ``CMS-maintained list'' of 
eligible clinicians that have ``a contractual relationship with the 
Advanced APM Entity [for CJR, the participant hospital] for the 
purposes of supporting the Advanced APM Entity's quality or cost goals 
under the Advanced APM.'' As specified in our regulations at Sec.  
414.1425(a)(2), CMS will use this list to identify the eligible 
clinicians who will be assessed as Qualifying APM Participants (QPs) 
for the year. CMS will make QP determinations individually for these 
eligible clinicians as specified in Sec. Sec.  414.1425(b)(2), (c)(4), 
and 414.1435.
    In the EPM final rule, we stated that a list of physicians, 
nonphysician practitioners, or therapists in a sharing arrangement, 
distribution arrangement, or downstream distribution arrangement, as 
applicable, would be considered an Affiliated Practitioner List of 
eligible clinicians who are affiliated with and support the Advanced 
APM Entity in its participation in the Advanced APM for purposes of the 
Quality Payment Program. An in-depth discussion of how the clinician 
financial arrangement list is considered an Affiliated Practitioner 
List can be found in section V.O. of the EPM final rule (82 FR 558 
through 563). The clinician financial arrangements list (Sec.  
510.120(b)) will be used by CMS to identify eligible clinicians for 
whom we would make a QP determination based on services furnished 
through the Advanced APM track of the CJR model.
    Stakeholders have expressed a desire for model changes that would 
also include in the clinician financial arrangement list physicians, 
non-physician practitioners, and therapists without a financial 
arrangement under the CJR model, but who are affiliated with and 
support the Advanced APM Entity in its participation in the Advanced 
APM for purposes of the Quality Payment Program.
    We agree with stakeholders that these physicians, non-physician 
practitioners, and therapists should have their contributions to the 
Advanced APM Entity's participation in the Advanced APM recognized 
under the Quality Payment Program; however, since these

[[Page 39325]]

individuals do not have financial arrangements with the participant 
hospital, to also include them on the clinician financial arrangement 
list would be misleading, and could create confusion when CJR model 
participant hospitals submit lists to CMS.
2. Proposed Clinician Engagement List Requirements
    To increase opportunities for eligible clinicians supporting CJR 
model participant hospitals by performing CJR model activities and who 
are affiliated with participant hospitals to be considered QPs, we are 
proposing that each physician, nonphysician practitioner, or therapist 
who is not a CJR collaborator during the period of the CJR model 
performance year specified by CMS, but who does have a contractual 
relationship with the participant hospital based at least in part on 
supporting the participant hospital's quality or cost goals under the 
CJR model during the period of the performance year specified by CMS, 
would be added to a clinician engagement list.
    In addition to the clinician financial arrangement list that is 
considered an Affiliated Practitioner List for purposes of the Quality 
Payment Program, we propose the clinician engagement list would also be 
considered an Affiliated Practitioner List. The clinician engagement 
list and the clinician financial arrangement list would be considered 
together an Affiliated Practitioner List and would be used by CMS to 
identify eligible clinicians for whom we would make a QP determination 
based on services furnished through the Advanced APM track of the CJR 
model. As specified in Sec.  414.1425, as of our regulations, adopted 
in the Calendar Year (CY) 2017 Quality Payment Program final rule (81 
FR 77551) (hereinafter referred to as the 2017 QPP final rule), those 
physicians, nonphysician practitioners, or therapists who are included 
on the CJR model Affiliated Practitioner List as of March 31, June 30, 
or August 31 of a QP performance period would be assessed to determine 
their QP status for the year. As discussed in the 2017 QPP final rule 
(81 FR 77439 and 77440), for clinicians on an Affiliated Practitioner 
List, we determine whether clinicians meet the payment amount or 
patient count thresholds to be considered QPs (or Partial QPs) for a 
year by evaluating whether individual clinicians on an Affiliated 
Practitioner List have sufficient payments or patients flowing through 
the Advanced APM; we do not make any determination at the APM Entity 
level for Advanced APMs in which eligible clinicians are not identified 
on a Participation List, but are identified on an Affiliated 
Practitioner List. CMS makes the QP determination based on Part B 
claims data, so clinicians need not track or report payment amount or 
patient count information to CMS.
    This proposal would broaden the scope of eligible clinicians that 
are considered Affiliated Practitioners under the CJR model to include 
those without a financial arrangement under the CJR model but who are 
either directly employed by or contractually engaged with a participant 
hospital to perform clinical work for the participant hospital when 
that clinical work, at least in part, supports the cost and quality 
goals of the CJR model. We propose that the cost and quality goals of 
the additional affiliated practitioners who are identified on a 
clinician engagement list because they are contracted with a 
participant hospital must include activities related to CJR model 
activities, that is, activities related to promoting accountability for 
the quality, cost, and overall care for beneficiaries during LEJR 
episodes included in the CJR model, including managing and coordinating 
care; encouraging investment in infrastructure, enabling technologies, 
and redesigned care processes for high quality and efficient service 
delivery; the provision of items and services during a CJR episode in a 
manner that reduces costs and improves quality; or carrying out any 
other obligation or duty under the CJR model.
    Like the requirements of the clinician financial arrangement lists 
specified at Sec.  510.120(b), for CMS to make QP determinations for 
eligible clinicians based on services furnished through the CJR 
Advanced APM track, we would require that accurate information about 
each physician, nonphysician practitioner, or therapist who is not a 
CJR collaborator during the period of the CJR model performance year 
specified by CMS, but who is included on a clinician engagement list, 
be provided to CMS in a form and manner specified by CMS on a no more 
than quarterly basis. Thus, we propose that each participant hospital 
in the Advanced APM track of the CJR model submit to CMS a clinician 
engagement list in a form and manner specified by CMS on a no more than 
quarterly basis. We propose this list must include the following 
information on eligible clinicians for the period of the CJR model 
performance year specified by CMS:
     For each physician, nonphysician practitioner, or 
therapist who is not a CJR collaborator during the period of the CJR 
model performance year specified by CMS but who does have a contractual 
relationship with a participant hospital based at least in part on 
supporting the participant hospital's quality or cost goals under the 
CJR model during the period of the CJR model performance year specified 
by CMS:
    ++ The name, TIN, and NPI of the individual.
    ++ The start date and, if applicable, the end date for the 
contractual relationship between the individual and participant 
hospital.
    Further, we propose that if there are no individuals that meet the 
requirements to be reported, as specified in any of Sec.  510.120 
(b)(1) through (3) of the EPM final rule or Sec.  510.120(c) as 
proposed here, the participant hospital must attest in a form and 
manner required by CMS that there are no individuals to report.
    Given that this proposal would require submission of a clinician 
engagement list, or an attestation that there are no eligible 
clinicians to be included on such a list, to reduce burden on 
participant hospitals, we would collect information for the clinician 
engagement list and clinician financial arrangement list at the same 
time.
    We seek comments on the proposal for submission of this 
information. We are especially interested in comments about approaches 
to information submission, including the periodicity and method of 
submission to CMS that would minimize the reporting burden on 
participant hospitals while providing CMS with sufficient information 
about eligible clinicians to facilitate QP determinations.
    For each participant hospital in the CJR Advanced APM track, we 
propose that the participant hospital must maintain copies of its 
clinician engagement lists and supporting documentation (that is, 
copies of employment letters or contracts) of its clinical engagement 
lists submitted to CMS. Because we would use these lists to develop 
Affiliated Practitioner Lists used for purposes of making QP 
determinations, these documents would be necessary to assess the 
completeness and accuracy of materials submitted by a participant 
hospital and to facilitate monitoring and audits. For the same reason, 
we further propose that the participant hospital must retain and 
provide access to the required documentation in accordance with Sec.  
510.110.

[[Page 39326]]

G. Clarification of Use of Amended Composite Quality Score Methodology 
During CJR Model Performance Year 1 Subsequent Reconciliation

    We conducted the initial reconciliation for performance year 1 of 
the CJR model in early 2017, and expect to make reconciliation payments 
to CJR participant hospitals by the end of September 2017 to 
accommodate the performance year 1 appeals process timelines. We will 
conduct the subsequent reconciliation calculation for performance year 
1 of the CJR model beginning in the first quarter of 2018, which may 
result in additional amounts to be paid to participant hospitals or a 
reduction to the amount that was paid for performance year 1. However, 
the results of the performance year 1 subsequent reconciliation 
calculations will be combined with the performance year 2 initial 
reconciliation results before reconciliation payment or repayment 
amounts are processed for payment or collection. Changes to the CJR 
model established in the EPM final rule impact this process.
    The improvements to the CJR model quality measures and composite 
quality score methodology, which were finalized in the EPM final rule 
(82 FR 524 through 526), were intended to be effective before the CJR 
model's performance year 1 initial reconciliation. However, as noted in 
section II. of this proposed rule, the effective date for certain EPM 
final rule provisions, including those amending Sec. Sec.  510.305 and 
510.315 to improve the quality measures and composite quality score 
methodology, were delayed until May 20, 2017. As a result, the CJR 
reconciliation reports issued in April 2017 were created in accordance 
with the provisions of Sec. Sec.  510.305 and 510.315 in effect as of 
April 2017; that is, the provisions finalized in the CJR model final 
rule. In early 2018, we would perform the performance year 1 subsequent 
reconciliation calculation in accordance with the provisions Sec. Sec.  
510.305 and 510.315 in effect as of early 2018, that is, established in 
the EPM final rule. Applying the provisions established in the EPM 
final rule to the performance year 1 subsequent reconciliation 
calculation may result in significant differences between the 
reconciliation payments calculated during the performance year 1 
initial reconciliation and the performance year 1 subsequent 
reconciliation. We anticipate that these differences will be greater 
than those that would be expected as a result of using more complete 
claims and programmatic data that will be available for the subsequent 
reconciliation (due to the additional 12 months of time that will occur 
between the initial and subsequent reconciliation calculations), more 
accurate identification of model overlap and exclusion of episodes, as 
well as factoring in adjustments to account for shared savings 
payments, and post-episode spending, as specified in Sec.  510.305(i). 
Specifically, the methodology used to determine the quality-adjusted 
target price for the performance year 1 subsequent reconciliation 
calculation will differ from the methodology used to determine the 
quality-adjusted target price for the performance year 1 initial 
reconciliation calculation as follows: The quality-adjusted target 
price would be recalculated to apply the amended reductions to the 
effective discount factors (Sec.  510.315(f)), which would be 
determined after recalculating the composite quality scores, including 
applying more generous criteria for earning quality improvement points 
(that is, a 2 decile improvement rather than 3 decile improvement as 
specified in amended Sec.  510.315(d)). Using the recalculated quality-
adjusted target price, the net payment reconciliation amount (NPRA) 
would be recalculated and will include application of post-episode 
spending reductions (Sec.  510.305(j)), as necessary, after determining 
the limitations on loss or gain. Thus, calculating performance year 1 
reconciliation payments using these two different provisions may result 
in a range of upward or downward adjustments to participant hospitals' 
performance year 1 payment amounts. We note that a downward adjustment 
to the performance year 1 payment amounts would require payment 
recoupment, if offset against a performance year 2 initial 
reconciliation payment amount is not feasible, which may be burdensome 
for participant hospitals.
    In developing this proposed rule, we also considered whether there 
might be benefit in further delaying the amendments to Sec. Sec.  
510.305 and 510.315 such that the same calculations would be used for 
both the performance year 1 initial reconciliation and the subsequent 
performance year 1 reconciliation, and the use of the amended 
calculations would begin with the performance year 2 initial 
reconciliation. We believe such an approach would impact future CJR 
model implementation and evaluation activities. Because determining the 
performance year 2 composite quality score considers the hospital's 
quality score improvement from its performance year 1 score, using 
different methodologies across performance years would require a 
mechanism to account for differences in the quality score methodology, 
for example we would have to develop a reliable crosswalk approach. If 
we were to develop and use a crosswalk approach, participants and other 
stakeholders would need to be informed about the crosswalk methodology 
in order to validate data analyses across performance years and that 
usage of the crosswalk would be ongoing throughout the model's duration 
for consistency across performance years. This methodology could add 
substantial complexity to this time-limited model. We also considered 
that the composite quality score for some participant hospitals may be 
higher under the revised scoring methodology. Delaying use of the 
revised scoring methodology may disadvantage these participants if 
their composite quality score would be higher and result in a more 
favorable discount percentage or allow the hospital to qualify for a 
reconciliation payment. Therefore, we believe the best approach is to 
apply the quality specifications as established in the EPM final rule 
(that is, the amendments to Sec. Sec.  510.305 and 510.315 that became 
effective May 20, 2017) to performance year 1 subsequent reconciliation 
calculations to ensure that reconciliation calculations for subsequent 
performance years will be calculated using the same methodology and to 
improve consistency across performance years for quality improvement 
measurement. Thus, for the reasons noted previously, we are not 
proposing to change the amendments to Sec. Sec.  510.305 and 510.315 
that became effective May 20, 2017. We seek comment on whether using an 
alternative approach, such as the quality composite score methodology 
from the CJR model final rule for the performance year 1 subsequent 
reconciliation, would ensure better consistency for analyses across CJR 
performance years.

H. Clarifying and Technical Changes Regarding the Use of the CMS Price 
(Payment) Standardization Detailed Methodology

    Based on questions we received from participant hospitals during 
the performance year 1 reconciliation process, we are proposing to make 
two technical changes to the CJR model regulations to clarify the use 
of the CMS Price (Payment) Standardization Detailed Methodology, posted 
on the QualityNet Web site at http://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=Qnet

[[Page 39327]]

Public%2FPage%2FQnetTier4&cid=1228772057350, in the calculation of 
target prices and actual episode spending. This pricing standardization 
approach is the same as that used for the Hospital Value-Based 
Purchasing Program's (HVBP) Medicare spending per beneficiary metric. 
In section III.C.3.a. of the CJR model final rule (80 FR 73331 through 
73333), we finalized how we would operationalize the exclusion of the 
various special payment provisions in calculating CJR model episode 
expenditures, both historical episode spending and performance year 
episode spending, by relying upon the CMS Price (Payment) 
Standardization Detailed Methodology with modifications. However, we 
did not clearly articulate this finalized policy in the regulations at 
42 CFR part 510. Thus, we are proposing the following technical changes 
to bring the regulatory text into conformity with our intended policy 
and to reduce potential stakeholder uncertainty about how the price 
(payment) standardization methodology is used. We are proposing to 
insert ``standardized'' into the definition of actual episode payment 
in Sec.  510.2, and insert ``with certain modifications'' into Sec.  
510.300(b)(6) to account for the modifications we must make to the 
standardization methodology to ensure all pricing calculations are 
consistent with our finalized policies.

IV. Collection of Information Requirements

    As stated in section 1115A(d)(3) of the Act, Chapter 35 of title 
44, United States Code, shall not apply to the testing and evaluation 
of models under section 1115A of the Act. As a result, the information 
collection requirements contained in this proposed rule need not be 
reviewed by the Office of Management and Budget. However, we have, 
summarized the anticipated cost burden associated with the information 
collection requirements in the Regulatory Impact Analysis section of 
this proposed rule.

V. Regulatory Impact Analysis

A. Introduction

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This proposed rule proposes to cancel the EPMs and the CR incentive 
payment model in advance of their start date and proposes several 
revisions to the design of the CJR model; these proposals impact a 
subset of hospitals under the IPPS. Therefore, it would have a 
relatively small economic impact; as a result, this proposed rule does 
not reach the $100 million threshold and thus is neither an 
``economically significant'' rule under E.O. 12866, nor a ``major 
rule'' under the Congressional Review Act.

B. Statement of Need

    As discussed previously, review and reevaluation of policies and 
programs, as well as revised rulemaking, are within an agency's 
discretion, especially after a change in administration occurs. After 
review and reevaluation of the CJR model final rule, the EPM final rule 
and the public comments we received in response to the March 21, 2017 
IFC, in addition to other considerations, we have determined that it is 
necessary to propose to rescind the regulations at 42 CFR part 512 and 
to reduce the geographic scope of the CJR model for the following 
reasons. First, we believe that requiring hospitals to participate in 
additional episode models at this time is not in the best interest of 
the agency or affected providers. We are concerned that engaging in 
large mandatory episode payment model efforts at this time may impede 
our ability to pursue and engage providers, such as hospitals, in 
future voluntary efforts. Similarly, we also believe that reducing the 
number of providers required to participate in the CJR model would 
allow us to continue to evaluate the effects of such a model while 
limiting the geographic reach of our current mandatory models. Finally, 
we believe that canceling the EPMs and CR incentive payment model, as 
well as altering the scope of the CJR model, offers CMS maximum 
flexibility to design alternative episode-based models and make 
potential improvements to these models as suggested by stakeholders, 
while still allowing us to test and evaluate the impact of the CJR 
model on the quality of care and expenditures.
    This proposed rule is also necessary to propose improvements to the 
CJR model for performance years 3, 4, and 5. We are proposing a few 
technical refinements and clarifications for certain payment, 
reconciliation and quality provisions, and a change to the criteria for 
the Affiliated Practitioner List to broaden the CJR Advanced APM track 
to additional eligible clinicians. We believe these proposed 
refinements would address operational issues identified since the start 
of the CJR model.

C. Anticipated Effects

    In section III. of the preamble to this proposed rule, we discuss 
our proposals to amend the regulations governing the CJR model. We 
present the following estimated overall impact of these proposed 
changes to the CJR model. Table 6 summarizes the newly calculated 
estimated impact for the CJR model for the last 3 years of the model.
    The modeling methodology for provider performance and participation 
is consistent with the methodology used in modeling the CJR impacts in 
the EPM final rule (82 FR 596). However, we updated our analysis to 
include an opt-in option for hospitals in 33 of the 67 MSAs selected 
for participation in the CJR model (all but 4 of these MSAs are from 
the lower cost groups), while maintaining mandatory participation for 
the remaining 34 MSAs (all of which are from the higher cost groups), 
and allowing for the exclusion of low-volume and rural hospitals in 
these 34 MSAs from mandatory participation and allowing them to choose 
voluntary participation (opt-in). We would expect the number of 
mandatory participating hospitals from year 3 forward to decrease from 
approximately 700, which is approximately the number of current CJR 
participants, to approximately 393. We assumed that if a hospital would 
exceed its target pricing such that it would incur an obligation of 
repayment to CMS of 3 percent or more in a given year, that hospital 
would not elect voluntary participation in the model for the final 
three performance years. We assumed no low-volume providers would 
participate, noting that including them in impacts would not have any 
noticeable effects due to their low claims volume. For purposes of

[[Page 39328]]

identifying CJR rural hospitals for this impact, we used the 2017 IPPS 
Sec.  412.103 rural reclassification list. We found only one provider 
in the 34 mandatory MSAs with an active rural reclassification and this 
provider was also on the low-volume hospital list and was not included 
in the impacts. The likelihood of voluntary participation linearly 
increases based on an upper bound of 3 percent bonus, but the modeling 
assumes that 25 percent of hospitals in the voluntary MSAs would not 
consider participation so that the likelihood of participation for each 
hospital is capped at 75 percent; we expect 60 to 80 hospitals to elect 
voluntary participation in the model.
    We seek comment on our assumptions about the number of hospitals 
that would elect voluntary participation in the CJR model. Due to a 
lack of available data, we did not account for participant investment 
in the impact analysis model we used for this proposed rule. However, 
we would expect that those who choose to voluntarily participate would 
have made investments in the CJR model that enable them to perform well 
and that they would anticipate earning positive reconciliation 
payments. For those hospitals choosing not to voluntarily participate, 
we would expect that the cost of any investments they may have made 
based on their participation in performance years 1 and 2 of the CJR 
model would be outweighed by the reconciliation payment obligations 
they would expect to incur if they continued to participate. The 60 to 
80 participants we expect to continue participating in the model 
through the voluntary election process are not included in our previous 
estimate of 393 CJR participants in the mandatory MSAs. Thus, in total 
we expect approximately 450 to 470 participants in the CJR model for 
the final three performance years. The participation parameters were 
chosen to reflect both the anticipated risk aversion of providers, and 
an expectation that many participants do not remain in an optional 
model or demonstration when there is an expectation that the hospital 
would incur an obligation of repayment to CMS. These assumptions 
reflect the experience with other models and demonstrations. The value 
of 3 percent may be somewhat larger than the level of repayment at 
which providers would opt-in, but the value was chosen to allow for the 
uncertainty of expected claims. We note that the possibility of 
shifting episodes from CJR model participant hospitals to low-volume or 
other non-participating hospitals exists and that we did not include 
any assumptions of this potential behavior in our financial impact 
modeling. We seek comment on our model assumptions that shifting of 
episodes will not occur. The new calculations estimate that the CJR 
model would result in a net Medicare program savings of approximately 
$204 million over the 3 remaining performance years (2018 through 
2020). This represents a reduction in savings of approximately $90 
million from the estimated net financial impacts of the CJR model in 
the EPM final rule (82 FR 603).
    Our previous analyses of the CJR model did not explicitly model for 
utilization changes, such as improvements in the efficiency of service 
during episodes. However, these behavioral changes would have minimal 
effect on the Medicare financial impacts. If the actual costs for an 
episode are below the discounted bundled payment amount, then CMS 
distributes the difference between these two amounts to the participant 
hospital, up to a capped amount. Similarly, if actual costs for an 
episode are above the discounted bundled payment amount, then the 
participant hospital pays CMS the difference between these amounts, up 
to a capped amount. Due to the uncertainty of estimating the impacts of 
this model, actual results could be higher or lower than this estimate.

   Table 6--Comparison of Initial Estimate of the Impact on the Medicare Program of the CJR Model With Revised
                                                    Estimates
                         [Figures are in $ millions, negative values represent savings]
----------------------------------------------------------------------------------------------------------------
                      Year                             2018            2019            2020            Total
----------------------------------------------------------------------------------------------------------------
Initial CJR Estimate............................             -61            -109            -125            -294
Revised CJR Estimate............................             -38             -77             -88            -204
Change..........................................              22              32              36              90
----------------------------------------------------------------------------------------------------------------
Note: The initial estimate includes the changes to the CJR model finalized in the EPM final rule (82 FR 603).
  The 2016 and 2017 initial estimate is not impacted by the proposed changes to the CJR model in this proposed
  rule. The total column reflects 2018 through 2020. Totals do not necessarily equal the sums of rounded
  components.

    Our analysis presents the cost and transfer payment effects of this 
proposed rule to the best of our ability.

D. Effects on Beneficiaries

    We believe that the proposal to cancel the EPMs and CR incentive 
payment model would not affect beneficiaries' freedom of choice to 
obtain healthcare services from any individual or organization 
qualified to participate in the Medicare program, including providers 
that are making care improvements within their communities. Although 
these models seek to incentivize care redesign and collaboration 
throughout the inpatient and post-acute care spectrum, the models have 
not yet begun. As the current baseline assumes these models would 
become effective on January 1, 2018, and that these models would 
incentivize care improvements that would likely result in an increase 
in quality of care for beneficiaries, it is possible that the proposal 
to cancel these models could cause hospitals that potentially made 
improvements in care in anticipation of the start of these models to 
delay or cease these investments, which could result in a reversal of 
any recent quality improvements. However, we believe the concerns 
raised by stakeholders and the lack of time to consider design 
improvements for these models prior to the January 1, 2018 start date 
outweigh potential reversal of any recent improvements in care 
potentially made by some hospitals and warrant cancellation of these 
models at this time while we engage with stakeholders to identify 
future tests for bundled payments and incentivizing high value care.
    We believe that the proposed changes to the CJR model discussed in 
this proposed rule, specifically focusing the model on higher cost MSAs 
in which participation would continue to be mandatory and allowing low-
volume and rural hospitals and all participant hospitals in lower cost 
MSAs to choose voluntary participation, would maintain the potential 
benefits of the CJR model for beneficiaries in many areas while 
providing a substantial number of

[[Page 39329]]

hospitals with increased flexibility to better focus on priority needs 
of the beneficiaries they serve. Specifically, low-volume and rural 
hospitals as well as other hospitals in the 33 voluntary participation 
MSAs (which are relatively more efficient areas) could elect to 
participate in the CJR model if they believe that doing so best meets 
their organization's strategic priorities for serving the beneficiaries 
in their community. Alternatively, if these hospitals do not believe 
continued participation in the CJR model would benefit their 
organizational goals and local patient care priorities, they can elect 
not to opt-in for the remainder of the model. We believe that 
beneficiaries in the service areas of the hospitals that would be 
allowed to choose to participate in the CJR model under our proposal 
may have an ongoing benefit from the care redesign investments these 
hospitals have already made during the first 2 years of the CJR model. 
Overall, we believe the refinements to the CJR model proposed in this 
proposed rule do not materially alter the potential effects of the 
model on beneficiaries. However, we acknowledge the possibility that 
the improved quality of care that was likely to have occurred during 
performance years 1 and 2 of the CJR model may be curtailed for 
beneficiaries that receive care at hospitals that do not elect to 
continue participation in the CJR model.

E. Effects on Small Rural Hospitals

    The changes to the CJR model proposed in this proposed rule do not 
substantially alter our previous impacts of the impact on small, 
geographically rural hospitals specified in either the EPM final rule 
(82 FR 606) and the CJR model final rule (80 FR 73538) because we 
continue to believe that few geographically rural hospitals will be 
included in the CJR model. In addition, the proposal to allow all rural 
hospitals (as defined in Sec.  510.2) that are not otherwise excluded 
the opportunity to elect to opt-in to the CJR model instead of having a 
mandatory participation requirement may further reduce the likelihood 
that rural hospitals would be included in the model. We solicit public 
comment on our estimates and analysis of the impact of our proposals on 
small rural hospitals.

F. Effects on Small Entities

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. We estimate that most hospitals and most 
other providers and suppliers are small entities, either by virtue of 
their nonprofit status or by qualifying as small businesses under the 
Small Business Administration's size standards (revenues of less than 
$7.5 to $38.5 million in any 1 year; NAIC Sector--62 series). States 
and individuals are not included in the definition of a small entity. 
For details, see the Small Business Administration's Web site at http://www.sba.gov/content/smallbusiness-size-standards.
    For purposes of the RFA, we generally consider all hospitals and 
other providers and suppliers to be small entities. We believe that the 
provisions of this proposed rule relating to acute care hospitals would 
have some effects on a substantial number of other providers involved 
in these episodes of care including surgeons and other physicians, 
skilled nursing facilities, physical therapists, and other providers. 
Although we acknowledge that many of the affected entities are small 
entities, and the analysis discussed throughout this proposed rule 
discusses aspects of episode payment models that may or would affect 
them, we have no reason to assume that these effects would reach the 
threshold level of 3 percent of revenues used by HHS to identify what 
are likely to be ``significant'' impacts. We assume that all or almost 
all of these entities would continue to serve these patients, and to 
receive payments commensurate with their cost of care. Hospitals 
currently experience frequent changes to payment (for example, as both 
hospital affiliations and preferred provider networks change) that may 
impact revenue, and we have no reason to assume that this would change 
significantly under the changes proposed in this rule.
    Accordingly, we have determined that this proposed rule will not 
have a significant impact on a substantial number of small entities. We 
solicit public comments on our estimates and analysis of the impact of 
our proposals on those small entities.

G. Effects of Information Collection

    The changes proposed in this proposed rule would have a minimal 
additional burden of information collection for CJR model participant 
hospitals. The two areas which this proposed rule may increase 
participant burden include providing clinician engagement lists and 
submitting opt-in documentation (for eligible hospitals who choose to 
opt-in to the CJR model).
    Clinician engagement list submission for the CJR model would 
require that participants submit on a no more than quarterly basis a 
list of physicians, nonphysician practitioners, or therapists who are 
not a CJR model collaborator during the period of the CJR model 
performance year specified by CMS but who do have a contractual 
relationship with a CJR model participant hospital based at least in 
part on supporting the participant hospital's quality or cost goals 
under the CJR model during the period of the performance year specified 
by CMS.
    For hospitals eligible to opt-in to the CJR model that elect to 
participate in the model, CMS intends to provide a template that can be 
completed and submitted prior to the proposed January 31, 2018 
submission deadline. As stated previously, we estimate that the number 
of hospitals that will elect voluntary participation in CJR is 60 to 
80. As stated previously, this template would be designed to minimize 
burden on participants, particularly since all necessary information 
required to effectively opt-in will be included within the template. 
Using wage information from the Bureau of Labor Statistics for medical 
and health service managers (Code 11-9111), we assumed a rate of 
$105.16 per hour, including overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm) and estimated that the time to 
complete the opt-in template would be, on average, approximately 30 
minutes per hospital. Thus, total costs associated with completing opt-
in templates for all 60 to 80 hospitals projected to elect voluntary 
participation is expected to range between $3,150 (60 hospitals) and 
$4,200 (80 hospitals).
    We seek comment on our assumptions and information on any costs 
associated with this work.

H. Regulatory Review Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on the EPM proposed rule will be the number of reviewers of 
this proposed rule. We acknowledge that this assumption may understate 
or overstate the costs of reviewing this rule. It is possible that not 
all commenters reviewed the precedent rule in detail, and it is also 
possible that some reviewers chose not to comment on the proposed rule. 
For these reasons we thought that the number of past commenters on the 
EPM proposed rule

[[Page 39330]]

would be a fair estimate of the number of reviewers of this rule. We 
welcome any comments on the approach in estimating the number of 
entities that would review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
however for the purposes of our estimate we assume that each reviewer 
reads approximately 100 percent of the rule. We seek comments on this 
assumption.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $105.16 per hour, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average 
reading speed, we estimate that it would take approximately 1.6 hours 
for the staff to review this proposed rule. For each entity that 
reviews the rule, the estimated cost is $168.26 (1.6 hours x $105.16). 
Therefore, we estimate that the total cost of reviewing this regulation 
is $29,445 ($105.16 x 175 reviewers).

I. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2017, that 
is approximately $148 million. This proposed rule does not include any 
mandate that would result in spending by state, local or tribal 
governments, in the aggregate, or by the private sector in the amount 
of $148 million in any 1 year.

J. Federalism

    We do not believe that there is anything in this proposed rule that 
either explicitly or implicitly preempts any state law, and furthermore 
we do not believe that this proposed rule would have a substantial 
direct effect on state or local governments, preempt state law, or 
otherwise have a federalism implication.

K. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs (82 FR 9339), was issued on January 30, 2017. This 
proposed rule, if finalized as proposed, is not expected to be subject 
to the requirements of E.O. 13771 because it is estimated to result in 
no more than de minimis costs.

L. Alternatives Considered

    Throughout this proposed rule, we have identified our proposed 
policies and alternatives that we have considered, and provided 
information as to the effects of these alternatives and the rationale 
for each of the proposed policies. We considered but did not propose to 
allow voluntary participation in all of the 67 selected MSAs in the CJR 
model because the overall estimated CJR model impact would no longer 
show savings, and would likely result in costs. An entirely voluntary 
CJR model would likely result in costs due to the assumption that, in 
aggregate, hospitals that expect to receive a positive reconciliation 
payment from Medicare would elect to opt-in to the model while 
hospitals that expect to owe Medicare a reconciliation amount would not 
likely elect to participate in the model. We also considered but did 
not propose limiting participation to the proposed 34 mandatory 
participation MSAs and not allowing voluntary participation in any of 
the 67 selected MSAs. If participation was limited to the proposed 34 
mandatory participation MSAs and voluntary participation was not 
allowed in any MSA, the impact to the overall estimated model savings 
over the last three years of the model would be closer to $30 million 
than the $90 million estimate presented in section V. of this proposed 
rule, because our modeling does not include assumptions about 
behavioral changes that might lower fee-for-service spending. Since our 
impact model estimates that 60 to 80 hospitals would choose voluntary 
participation and that these potential voluntary participants would be 
expected to earn only positive reconciliation payments under the model, 
these positive payments to the voluntary participants would offset some 
of the savings garnered from mandatory participants. However, we are 
proposing to allow voluntary participation in the proposed 33 voluntary 
participation MSAs and for low-volume and rural hospitals to permit 
hospitals that have made investments in care redesign and commitments 
to improvement to continue to participate in the model for the 
remaining 3 years. We believe our proposal would benefit a greater 
number of beneficiaries because a greater number of hospitals would be 
included in the CJR model.
    Instead of proposing to cancel the EPMs and CR incentive payment 
model, we considered altering the design of these models to allow for 
voluntary participation but as this would potentially involve 
restructuring the model design, payment methodologies, financial 
arrangement provisions and/or quality measures, we did not believe that 
such alterations would offer providers enough time to prepare for such 
changes, given the planned January 1, 2018 start date. In addition, if 
at a later date we decide to offer these models, or similar models, on 
a voluntary basis, we would not expect to implement them through 
rulemaking, but rather would establish them consistent with the manner 
in which we have implemented other voluntary models.
    We solicit and welcome comments on our proposals, on the 
alternatives we have identified, and on other alternatives that we 
should consider, as well as on the costs, benefits, or other effects of 
these.

M. Accounting Statement and Table

    As required by OMB Circular A-4 under Executive Order 12866 
(available at http://www.whitehouse.gov/omb/circulars_a004_a-4) in 
Table 7, we have prepared an accounting statement showing the 
classification of transfers associated with the provisions in this 
proposed rule. The accounting statement is based on estimates provided 
in this regulatory impact analysis. As described in Table 6, we 
estimate the proposed changes to the CJR model would continue to result 
in savings to the federal government of approximately $204 million over 
the 3 remaining performance years of the model from 2018 to 2020, 
noting these changes do reduce the original CJR estimated savings by 
approximately $90 million. In Table 7, the overall annualized change in 
payments (for all provisions in this proposed rule relative to the CJR 
model as originally finalized) based on a 7-percent and 3-percent 
discount rate, results in net federal monetary transfer from the 
federal government to participant IPPS hospitals of $73.2 million and 
$82.4 million in 2017 dollars, respectively, over the period of 2018 to 
2020.

[[Page 39331]]



  Table 7--Accounting Statement Changes to Comprehensive Care for Joint Replacement Model for Performance Years
                                                  2018 to 2020
----------------------------------------------------------------------------------------------------------------
                                                                               Units
                                                 ---------------------------------------------------------------
            Category                 Estimates                     Discount rate
                                                    Year dollar         (%)               Period covered
----------------------------------------------------------------------------------------------------------------
Costs: *
    Upfront cost of regulation              0.03            2017               7  2018 upfront cost.
     ($million).                            0.03            2017               3  2018 upfront cost.
----------------------------------------------------------------------------------------------------------------
        From Whom to Whom                   Incurred by IPPS Hospitals as a result of this regulation.
----------------------------------------------------------------------------------------------------------------
Transfers:
    Annualized/Monetized                   27.90            2017               7  2018-2020.
     ($million/year).                      29.14            2017               3  2018-2020.
----------------------------------------------------------------------------------------------------------------
        From Whom To Whom                  From the Federal Government to Participating IPPS Hospitals.
----------------------------------------------------------------------------------------------------------------
* The cost includes the regulatory familiarization and completing opt-in templates for up to 80 hospitals to
  join the CJR model.

M. Conclusion

    This analysis, together with the remainder of this preamble, 
provides the Regulatory Impact Analysis of a rule. As a result of this 
proposed rule, we estimate that the financial impact of the changes to 
the CJR model proposed here would result in a reduction to previously 
estimated savings by $90 million over the 3 remaining performance years 
(2018 through 2020) although we note that the CJR model would still be 
estimated to save the Medicare program approximately $204 million over 
the remaining three performance years.
    In accordance with the provisions of Executive Order 12866, this 
rule was reviewed by the Office of Management and Budget.

VI. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

List of Subjects

42 CFR Part 510

    Administrative Practice and Procedure, Health facilities, Health 
professions, Medicare, and Reporting and recordkeeping requirements.

42 CFR Part 512

    Administrative Practice and Procedure, Health facilities, Health 
professions, Medicare, and Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, under the authority at 
section 1115A of the Social Security Act, the Centers for Medicare & 
Medicaid Services proposes to amend 42 CFR Chapter IV, as follows:

PART 510--COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL

0
1. The authority citation for part 510 continues to read as follows:

    Authority: Secs. 1102, 1115A, and 1871 of the Social Security 
Act (42 U.S.C. 1302, 1315(a), and 1395hh).

0
2. Section 510.2 is amended by--
0
a. Revising the definition of ``Actual episode payment'';
0
b. Adding, in alphabetical order, definitions of ``Low-volume 
hospital'' and ``mandatory MSA''.
0
c. Revising the definition of ``participant hospital''; and
0
d. Adding the definition of ``voluntary MSA''.
    The revisions and additions read as follows:


Sec.  510.2  Definitions.

* * * * *
    Actual episode payment means the sum of standardized Medicare 
claims payments for the items and services that are included in the 
episode in accordance with Sec.  510.200(b), excluding the items and 
services described in Sec.  510.200(d).
* * * * *
    Low-volume hospital means a hospital identified by CMS as having 
fewer than 20 LEJR episodes in total across the 3 historical years of 
data used to calculate the performance year 1 CJR episode target 
prices.
* * * * *
    Mandatory MSA means an MSA designated by CMS as a mandatory 
participation MSA in accordance with Sec.  510.105(a).
* * * * *
    Participant hospital means one of the following:
    (1) During performance years 1 and 2 of the CJR model and the 
period from January 1, 2018 to January 31, 2018 of performance year 3, 
a hospital (other than a hospital excepted under Sec.  510.100(b)) with 
a CCN primary address located in one of the geographic areas selected 
for participation in the CJR model in accordance with Sec.  510.105.
    (2) Beginning February 1, 2018, a hospital (other than a hospital 
excepted under Sec.  510.100(b)) that is one of the following:
    (i) A hospital with a CCN primary address located in a mandatory 
MSA as of February 1, 2018 that is not a rural hospital or a low-volume 
hospital on that date.
    (ii) A hospital that is a rural hospital or low-volume hospital 
with a CCN primary address located in a mandatory MSA that makes an 
election to participate in the CJR model in accordance with Sec.  
510.115.
    (iii) A hospital with a CCN primary address located in a voluntary 
MSA that makes an election to participate in the CJR model in 
accordance with Sec.  510.115.
* * * * *
    Voluntary MSA means an MSA designated by CMS as a voluntary 
participation MSA in accordance with Sec.  510.105(a).
0
 3. Section 510.105 is amended by revising paragraph (a) to read as 
follows:


Sec.  510.105   Geographic areas.

    (a) General. The geographic areas for inclusion in the CJR model 
are obtained based on a stratified random sampling of certain MSAs in 
the United States.
    (1) All counties within each of the selected MSAs are selected for 
inclusion in the CJR model.

[[Page 39332]]

    (2) Beginning with performance year 3, the selected MSAs are 
designated as either mandatory participation MSAs or voluntary 
participation MSAs.
* * * * *
0
 4. Section 510.115 is added to read as follows:


Sec.  510.115   Voluntary participation election.

    (a) General. To continue participation in performance year 3 and 
participate in performance year 4 and performance year 5, the following 
hospitals must submit a written participation election letter as 
described in paragraph (c) of this section during the voluntary 
participation election period specified in paragraph (b) of this 
section:
    (1) Hospitals (other than those excluded under Sec.  510.100(b)) 
with a CCN primary address in a voluntary MSA.
    (2) Low-volume hospitals with a CCN primary address in a mandatory 
MSA.
    (3) Rural hospitals with a CCN primary address in a mandatory MSA.
    (b) Voluntary participation election period. The voluntary 
participation election period begins on January 1, 2018 and ends on 
January 31, 2018.
    (c) Voluntary participation election letter. The voluntary 
participation election letter serves as the model participation 
agreement. CMS accepts the voluntary participation election letter if 
the letter meets all of the following criteria:
    (1) Includes the following:
    (i) Hospital name.
    (ii) Hospital address.
    (iii) Hospital CCN.
    (iv) Hospital contact name, telephone number, and email address.
    (v) Model name (that is, CJR model).
    (vi) Attestation of CEHRT use as specified in Sec.  510.120(a)(1) 
(if the hospital is choosing to participate in the Advanced APM track).
    (2) Includes a certification that the hospital will--
    (i) Comply with all applicable requirements of this part and all 
other laws and regulations applicable to its participation in the CJR 
model; and
    (ii) Submit data or information to CMS that is accurate, complete 
and truthful, including, but not limited to, the participation election 
letter and any quality data or other information that CMS uses in its 
reconciliation processes.
    (3) Is signed by the hospital administrator, CFO or CEO.
    (4) Is submitted in the form and manner specified by CMS.
0
5. Section 510.120, as added January 3, 2017 (82 FR 180), delayed until 
October 1, 2017, on March 21, 2017 (82 FR 14464), further delayed until 
January 1, 2018, on May 19, 2017 (82 FR 22895), is amended by removing 
paragraph (b)(4), revising paragraph (c), and adding paragraphs (d) and 
(e).
    The revision and additions read as follows:


Sec.  510.120   CJR participant hospital CEHRT track requirements.

* * * * *
    (c) Clinician engagement list. Each participant hospital that 
chooses CEHRT use as provided in paragraph (a)(1) of this section must 
submit to CMS a clinician engagement list in a form and manner 
specified by CMS on a no more than quarterly basis. This list must 
include the following information on individuals for the period of the 
performance year specified by CMS:
    (1) For each physician, nonphysician practitioner, or therapist who 
is not a CJR collaborator during the period of the CJR model 
performance year specified by CMS but who does have a contractual 
relationship with the participant hospital based at least in part on 
supporting the participant hospital's quality or cost goals under the 
CJR model during the period of the performance year specified by CMS:
    (i) The name, TIN, and NPI of the individual.
    (ii) The start date and, if applicable, the end date for the 
contractual relationship between the individual and participant 
hospital.
    (2) [Reserved]
    (d) Attestation to no individuals. If there are no individuals that 
meet the requirements to be reported, as specified in paragraphs (b)(1) 
through (3) or paragraph (c) of this section, the participant hospital 
must attest in a form and manner required by CMS that there are no 
individuals to report.
    (e) Documentation requirements. (1) Each participant hospital that 
chooses CEHRT use as provided in paragraph (a)(1) of this section must 
maintain documentation of their attestation to CEHRT use, clinician 
financial arrangements lists, and clinician engagement lists.
    (2) The participant hospital must retain and provide access to the 
required documentation in accordance with Sec.  510.110.
0
6. Section 510.210 is amended by revising paragraph (b) to read as 
follows:


Sec.  510.210   Determination of the episode.

* * * * *
    (b) Cancellation of an episode. The episode is canceled and is not 
included in the determination of NPRA as specified in Sec.  510.305 if 
any of the following occur:
    (1) The beneficiary does any of the following during the episode:
    (i) Ceases to meet any criterion listed in Sec.  510.205.
    (ii) Is readmitted to any participant hospital for another anchor 
hospitalization.
    (iii) Initiates an LEJR episode under BPCI.
    (iv) Dies.
    (2) For performance year 3, the participant hospital did not submit 
a participation election letter that was accepted by CMS to continue 
participation in the model.
0
7. Section 510.300 is amended by revising paragraph (b)(6) to read as 
follows:


Sec.  510.300  Determination of quality-adjusted episode target prices.

* * * * *
    (b) * * *
    (6) Exclusion of incentive programs and add-on payments under 
existing Medicare payment systems. Certain incentive programs and add-
on payments are excluded from historical episode payments by using, 
with certain modifications, the CMS Price (Payment) Standardization 
Detailed Methodology used for the Medicare spending per beneficiary 
measure in the Hospital Value-Based Purchasing Program.
* * * * *
0
8. Section 510.305 is amended by revising paragraph (d)(1) to read as 
follows:


Sec.  510.305   Determination of the NPRA and reconciliation process.

* * * * *
    (d) * * *
    (1) Beginning 2 months after the end of each performance year, CMS 
does all of the following:
    (i) Performs a reconciliation calculation to establish an NPRA for 
each participant hospital.
    (ii) For participant hospitals that experience a reorganization 
event in which one or more hospitals reorganize under the CCN of a 
participant hospital performs--
    (A) Separate reconciliation calculations (during both initial and 
subsequent reconciliations for a performance year) for each predecessor 
participant hospital for episodes where anchor hospitalization 
admission occurred before the effective date of the reorganization 
event; and
    (B) Reconciliation calculations (during both initial and subsequent 
reconciliations for a performance year) for each new or surviving 
participant hospital for episodes where the anchor hospitalization 
admission occurred on or after the effective date of the reorganization 
event.
* * * * *

[[Page 39333]]

0
9. Section 510.410 is amended by adding paragraph (b)(1)(i)(G) to read 
as follows:


Sec.  510.410  Compliance enforcement.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (G) Failing to participate in CJR model-related evaluation 
activities conducted by CMS or its contractors or both.
* * * * *
0
10. Section 510.605 is amended by revising paragraph (c)(2) to read as 
follows:


Sec.  510.65  Waiver of certain telehealth requirements.

* * * * *
    (c) * * *
    (2) CMS waives the payment requirements under section 1834(m)(2)(B) 
of the Act to allow the distant site payment for telehealth home visit 
HCPCS codes unique to this model.
* * * * *

PART 512--[REMOVED AND RESERVED]

0
11. Part 512, as added January 3, 2017 (82 FR 180), delayed until 
October 1, 2017, on March 21, 2017 (82 FR 14464), further delayed until 
January 1, 2018, on May 19, 2017 (82 FR 22895), is removed and 
reserved.

    Dated: August 10, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: August 11, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-17446 Filed 8-15-17; 4:15 pm]
BILLING CODE 4120-01-P



                                                   39310                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   DEPARTMENT OF HEALTH AND                                received before the close of the                      instructions on that Web site to view
                                                   HUMAN SERVICES                                          comment period.                                       public comments.
                                                                                                              3. By express or overnight mail. You                  Comments received prior to the
                                                   Centers for Medicare & Medicaid                         may send written comments to the                      submission deadline will also be
                                                   Services                                                following address ONLY: Centers for                   available for public inspection as they
                                                                                                           Medicare & Medicaid Services,                         are received, generally beginning
                                                   42 CFR Parts 510 and 512                                Department of Health and Human                        approximately three weeks after
                                                   [CMS–5524–P]                                            Services, Attention: CMS–5524–P, Mail                 publication of a document, at the
                                                                                                           Stop C4–26–05, 7500 Security                          headquarters of the Centers for Medicare
                                                   RIN 0938–AT16                                           Boulevard, Baltimore, MD 21244–1850.                  & Medicaid Services, 7500 Security
                                                                                                              4. By hand or courier. Alternatively,              Boulevard, Baltimore, Maryland 21244,
                                                   Medicare Program; Cancellation of                       you may deliver (by hand or courier)                  Monday through Friday of each week
                                                   Advancing Care Coordination Through                     your written comments ONLY to the                     from 8:30 a.m. to 4 p.m. To schedule an
                                                   Episode Payment and Cardiac                             following addresses prior to the close of             appointment to view public comments,
                                                   Rehabilitation Incentive Payment                        the comment period:                                   phone 1–800–743–3951.
                                                   Models; Changes to Comprehensive                           a. For delivery in Washington, DC—
                                                   Care for Joint Replacement Payment                      Centers for Medicare & Medicaid                       Electronic Access
                                                   Model (CMS–5524–P)                                      Services, Department of Health and                      This Federal Register document is
                                                   AGENCY:  Centers for Medicare &                         Human Services, Room 445–G, Hubert                    also available from the Federal Register
                                                   Medicaid Services (CMS), HHS.                           H. Humphrey Building, 200                             online database through Federal Digital
                                                   ACTION: Proposed rule.                                  Independence Avenue SW.,                              System (FDsys), a service of the U.S.
                                                                                                           Washington, DC 20201.                                 Government Printing Office. This
                                                   SUMMARY:    This proposed rule proposes                    (Because access to the interior of the             database can be accessed via the
                                                   to cancel the Episode Payment Models                    Hubert H. Humphrey Building is not                    internet at http://www.gpo.gov/fdsys/.
                                                   (EPMs) and Cardiac Rehabilitation (CR)                  readily available to persons without
                                                                                                                                                                 Acronyms
                                                   incentive payment model and to rescind                  Federal government identification,
                                                   the regulations governing these models.                 commenters are encouraged to leave                    ACE Acute Care Episode Demonstration
                                                   It also proposes to revise certain aspects              their comments in the CMS drop slots                  ACO Accountable Care Organization
                                                   of the Comprehensive Care for Joint                     located in the main lobby of the                      AMI Acute Myocardial Infarction
                                                                                                                                                                 APM Alternative Payment Model
                                                   Replacement (CJR) model, including:                     building. A stamp-in clock is available
                                                                                                                                                                 BPCI Bundled Payments for Care
                                                   Giving certain hospitals selected for                   for persons wishing to retain a proof of                Improvement
                                                   participation in the CJR model a one-                   filing by stamping in and retaining an                CABG Coronary Artery Bypass Graft
                                                   time option to choose whether to                        extra copy of the comments being filed.)              CCN CMS Certification Number
                                                   continue their participation in the                        b. For delivery in Baltimore, MD—                  CCSQ Center for Clinical Standards and
                                                   model; technical refinements and                        Centers for Medicare & Medicaid                         Quality
                                                   clarifications for certain payment,                     Services, Department of Health and                    CEHRT Certified Electronic Health Record
                                                   reconciliation and quality provisions;                  Human Services, 7500 Security                           Technology
                                                   and a change to increase the pool of                    Boulevard, Baltimore, MD 21244–1850.                  CEO Chief Executive Officer
                                                                                                           If you intend to deliver your comments                CFO Chief Financial Officer
                                                   eligible clinicians that qualify as                                                                           CJR Comprehensive Care for Joint
                                                   affiliated practitioners under the                      to the Baltimore address, call telephone                Replacement
                                                   Advanced Alternative Payment Model                      number (410) 786–7195 in advance to                   CMS Centers for Medicare & Medicaid
                                                   (APM) track.                                            schedule your arrival with one of our                   Services
                                                   DATES: Comment period: To be assured                    staff members.                                        CR Cardiac rehabilitation
                                                   consideration, comments on this                            Comments erroneously mailed to the                 CY Calendar Year
                                                   proposed rule must be received at one                   addresses indicated as appropriate for                E/M Evaluation and Management
                                                                                                           hand or courier delivery may be delayed               EPM Episode payment model
                                                   of the addresses provided in the
                                                                                                           and received after the comment period.                FFS Fee-for-service
                                                   ADDRESSES section no later than 5 p.m.                                                                        FR Federal Register
                                                   EDT on October 16, 2017.                                   For information on viewing public
                                                                                                                                                                 HACRP Hospital-Acquired Condition
                                                                                                           comments, see the beginning of the
                                                   ADDRESSES: In commenting, please refer                                                                          Reduction Program
                                                                                                           SUPPLEMENTARY INFORMATION section.                    HHS U.S. Department of Health and Human
                                                   to file code CMS–5524–P. Because of
                                                   staff and resource limitations, we cannot               FOR FURTHER INFORMATION CONTACT:                        Services
                                                   accept comments by facsimile (FAX)                         For questions related to the CJR                   HVBP Hospital Value-Based Purchasing
                                                                                                           model: CJR@cms.hhs.gov.                                 Program
                                                   transmission.
                                                                                                              For questions related to the EPMs:                 ICD–CM International Classification of
                                                      You may submit comments in one of                                                                            Diseases, Clinical Modification
                                                   four ways (please choose only one of the                EPMRULE@cms.hhs.gov.
                                                                                                                                                                 IFC Interim Final Rule with Comment
                                                   ways listed):                                           SUPPLEMENTARY INFORMATION:                              Period
                                                      1. Electronically. You may submit                       Inspection of Public Comments: All                 IPPS Inpatient Prospective Payment System
                                                   electronic comments on this regulation                  comments received before the close of                 LEJR Lower-extremity joint replacement
                                                   to http://www.regulations.gov. Follow                   the comment period are available for                  MPFS Medicare Physician Fee Schedule
sradovich on DSK3GMQ082PROD with PROPOSALS2




                                                   the ‘‘Submit a comment’’ instructions.                  viewing by the public, including any                  MP Malpractice
                                                      2. By regular mail. You may mail                     personally identifiable or confidential               MSA Metropolitan Statistical Area
                                                   written comments to the following                       business information that is included in              MS–DRG Medical Severity Diagnosis-
                                                   address ONLY: Centers for Medicare &                    a comment. We post all comments                         Related Group
                                                                                                                                                                 NPI National Provider Identifier
                                                   Medicaid Services, Department of                        received before the close of the                      NPRA Net Payment Reconciliation Amount
                                                   Health and Human Services, Attention:                   comment period on the following Web                   NQF National Quality Forum
                                                   CMS–5524–P, P.O. Box 8013, Baltimore,                   site as soon as possible after they have              OMB Office of Management and Budget
                                                   MD 21244–1850.Please allow sufficient                   been received: http://                                PE Practice Expense
                                                   time for mailed comments to be                          www.regulations.gov. Follow the search                PGP Physician Group Practice



                                              VerDate Sep<11>2014   19:57 Aug 16, 2017   Jkt 241001   PO 00000   Frm 00002   Fmt 4701   Sfmt 4702   E:\FR\FM\17AUP2.SGM   17AUP2


                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                         39311

                                                   PRO Patient-Reported Outcome                            offer opportunities to redesign care                  performance year. In many cases, CJR
                                                   PY Performance year                                     processes and improve quality and care                hospitals have made investments in care
                                                   QP Qualifying APM Participant                           coordination across the inpatient and                 redesign, and we want to recognize such
                                                   RFA Regulatory Flexibility Act
                                                                                                           post-acute care spectrum while lowering               investments and commitments to
                                                   RSCR Risk-Standardized Complication Rate
                                                   RVU Relative Value Unit                                 spending, after careful review, we have               improvement while reducing the overall
                                                   SHFFT Surgical hip/femur fracture                       determined that it is appropriate to                  number of hospitals that are required to
                                                     treatment                                             propose to rescind the regulations at 42              participate.
                                                   THA Total hip arthroplasty                              CFR part 512, which relate to the EPMs                  We seek public comment on the
                                                   TIN Taxpayer Identification Number                      and CR incentive payment model, and                   proposals contained in this proposed
                                                   TKA Total knee arthroplasty                             reduce the geographic scope of the CJR                rule, and also on any alternatives
                                                   UMRA Unfunded Mandates Reform Act                                                                             considered.
                                                                                                           model for the following reasons. First,
                                                   I. Executive Summary                                    we believe that requiring hospitals to                B. Summary of Economic Effects
                                                   A. Purpose                                              participate in additional episode
                                                                                                                                                                   We do not anticipate that our
                                                                                                           payment models at this time is not in
                                                      The purpose of this proposed rule is                                                                       proposal to cancel the EPMs and CR
                                                                                                           the best interest of the agency or the
                                                   to propose to cancel the Episode                                                                              incentive payment model prior to the
                                                                                                           affected providers. Many providers are                start of those models will have any costs
                                                   Payment Models (EPMs) and the                           currently engaged in voluntary
                                                   Cardiac Rehabilitation (CR) incentive                                                                         to providers. As shown in our impact
                                                                                                           initiatives with CMS, and we expect to                analysis in section V. of this proposed
                                                   payment model, established by the                       continue to offer opportunities for
                                                   Center for Medicare and Medicaid                                                                              rule, we estimate that the CJR model
                                                                                                           providers to participate in voluntary                 changes we are proposing will reduce
                                                   Innovation (Innovation Center) under                    initiatives, including episode-based
                                                   the authority of section 1115A of the                                                                         the previously projected CJR model
                                                                                                           payment models. We are concerned that                 savings (82 FR 603) by approximately
                                                   Social Security Act (the Act), and to                   engaging in large mandatory episode
                                                   rescind the regulations at 42 CFR part                                                                        $90 million. Therefore, we estimate that
                                                                                                           payment model efforts at this time may                the total CJR model impact after the
                                                   512. Additionally, this proposed rule                   impede our ability to engage providers,
                                                   proposes to prospectively make                                                                                changes in this proposed rule will save
                                                                                                           such as hospitals, in future voluntary                the Medicare program $204 million,
                                                   participation voluntary for all hospitals
                                                                                                           efforts. Similarly, we also believe that              instead of $294 million, over the
                                                   in approximately half of the geographic
                                                                                                           reducing the number of providers                      remaining 3-year performance period
                                                   areas selected for participation in the
                                                                                                           required to participate in the CJR model              (2018 through 2020) of the CJR model.
                                                   Comprehensive Care for Joint
                                                                                                           will allow us to continue to evaluate the             Our impact analysis has some degree of
                                                   Replacement (CJR) model (that is, in 33
                                                                                                           effects of such a model while limiting                uncertainty and makes assumptions as
                                                   of the 67 Metropolitan Statistical Areas
                                                                                                           the geographic reach of our current                   discussed in section V. of this proposed
                                                   (MSAs) selected; (see 80 FR 73299 Table
                                                                                                           mandatory models. We considered                       rule. In addition to these estimated
                                                   4)) and for low-volume and rural
                                                                                                           altering the design of the EPMs and the               impacts, as with many of the Innovation
                                                   hospitals in all of the geographic areas
                                                                                                           CR incentive payment model to allow                   Center models, the goals that
                                                   selected for participation in the CJR
                                                   model. We are also proposing several                    for voluntary participation and to take               participants are attempting to achieve
                                                   technical refinements and clarifications                into account other feedback on the                    include improving overall quality of
                                                   for certain CJR model payment,                          models, but as this would potentially                 care, enhancing participating provider
                                                   reconciliation, and quality provisions,                 involve restructuring the model design,               infrastructure to support better care
                                                   and a change to the criteria for the                    payment methodologies, financial                      management and reducing costs. We
                                                   Affiliated Practitioner List to broaden                 arrangement provisions and/or quality                 anticipate there will continue to be a
                                                   the CJR Advanced Alternative Payment                    measures, we did not believe that such                broader focus on care coordination and
                                                   Model (APM) track to additional eligible                alterations would offer providers                     quality improvement through the CJR
                                                   clinicians.                                             enough time to prepare for such                       model among hospitals and other
                                                      We note that review and reevaluation                 changes, given the planned January 1,                 providers and suppliers within the
                                                   of policies and programs, as well as                    2018 start date. In addition, if at a later           Medicare program that may lead to
                                                   revised rulemaking, are within an                       date we decide to test these models, or               better care management and improved
                                                   agency’s discretion, and that discretion                similar models, on a voluntary basis, we              quality of care for beneficiaries.
                                                   is often exercised after a change in                    would not expect to implement them
                                                                                                           through rulemaking, but rather would                  II. Statutory Authority and Background
                                                   administration occurs. The EPMs and
                                                   the CR incentive models were designed                   use methods of soliciting applications                   Under the authority of section 1115A
                                                   as mandatory payment models and                         and securing participants’ agreement to               of the Social Security Act (the Act),
                                                   implemented via notice and comment                      participate consistent with how we have               through notice-and-comment
                                                   rulemaking to test the effects of                       implemented other voluntary models.                   rulemaking, CMS’ Center for Medicare
                                                   bundling cardiac and orthopedic care                    Finally, we believe that canceling the                and Medicaid Innovation (Innovation
                                                   beginning in 2018 and further                           EPMs and CR incentive payment model,                  Center) established the Comprehensive
                                                   incentivizing higher value care. The CJR                as well as altering the scope of the CJR              Care for Joint Replacement model in a
                                                   model was also designed as a mandatory                  model, offers CMS greater flexibility to              final rule titled ‘‘Medicare Program;
                                                   payment model established via notice                    design and test other episode-based                   Comprehensive Care for Joint
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                                                   and comment rulemaking to test the                      payment models, while still allowing us               Replacement Payment Model for Acute
                                                   effects of bundling on orthopedic                       to test and evaluate the impact of the                Care Hospitals Furnishing Lower
                                                   episodes involving lower extremity joint                ongoing CJR model on enhancing the                    Extremity Joint Replacement Services’’
                                                   replacements; we note that the CJR                      quality of care while reducing costs.                 published in the November 24, 2015
                                                   model began on April 1, 2016 and is                     Hospitals in the CJR model have been                  Federal Register (80 FR 73274 through
                                                   currently in its second performance                     participating for more than a year and                73554) (referred to in this proposed rule
                                                   year.                                                   a half, and we have begun to give                     as the ‘‘CJR model final rule’’). We
                                                      While we continue to believe that                    hospitals in the model financial and                  established three new models for acute
                                                   cardiac and orthopedic episode models                   quality results from the first                        myocardial infarction, coronary artery


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                                                   39312                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   bypass graft, and surgical hip/femur                    rulemaking. Based on the public                       2018 start date for the EPMs and the CR
                                                   fracture treatment episodes of care,                    comments we received in response to                   incentive payment model, we would
                                                   which are collectively called the                       the March 21, 2017 IFC, we published                  engage in notice and comment
                                                   Episode Payment Models (EPMs),                          a final rule (referred to in this proposed            rulemaking on these models if we
                                                   created a Cardiac Rehabilitation                        rule as the ‘‘May 19, 2017 final delay                believed it to be warranted. We also
                                                   incentive payment model (CR incentive                   rule’’) on May 19, 2017 (82 FR 22895)                 noted that we received 47 submissions
                                                   payment model), and revised several                     to finalize a January 1, 2018                         in response to the March 21, 2017 IFC.
                                                   existing provisions for the CJR model, in               applicability date for the EPMs and CR                These responses contained a mix of in-
                                                   a final rule titled ‘‘Advancing Care                    incentive payment provisions, as well as              and out-of-scope comments (82 FR
                                                   Coordination Through Episode Payment                    to finalize a January 1, 2018 effective               22899). In the May 19, 2017 final delay
                                                   Models (EPMs); Cardiac Rehabilitation                   date for the conforming changes to the                rule (82 FR 22897), we noted that in
                                                   Incentive Payment Model; and Changes                    CJR model (specifically amending                      addition to commenting on the change
                                                   to the Comprehensive Care for Joint                     § 510.2; adding § 510.110; amending                   to the effective date for the EPMs and
                                                   Replacement Model’’ published in the                    § 510.120; amending § 510.405;                        CR incentive payment model and
                                                   January 3, 2017 Federal Register (82 FR                 amending § 510.410; revising § 510.500;               certain provisions of the CJR model,
                                                   180) (referred to in this proposed rule as              revising § 510.505; adding § 510.506;                 commenters highlighted concerns with
                                                   the ‘‘EPM final rule’’).                                and amending § 510.515). Additional                   the models’ design, including but not
                                                      The effective date for most of the                   changes to the CJR model, in accordance               limited to participation requirements,
                                                   provisions of the EPM final rule was                    with the March 21, 2017 IFC, took effect              data, pricing, quality measures, episode
                                                   February 18, 2017, and in the EPM final                 May 20, 2017.                                         length, CR and skilled nursing facility
                                                   rule we specified an effective date of                     As we stated in the May 19, 2017 final             (SNF) waivers, beneficiary exclusions
                                                   July 1, 2017 for certain CJR model                      delay rule (82 FR 22897), we received a               and notification requirements,
                                                   regulatory changes intended to align                    number of comments on the models that                 repayment, coding, and model overlap
                                                   with a July 1, 2017 applicability, or                   did not relate to the start date change               issues. Specifically, many commenters
                                                   start, date for the EPMs and CR                         comment solicitation. These additional                were opposed to the mandatory
                                                   incentive payment model. On January                     comments suggested that we reconsider                 participation requirements, arguing that
                                                   20, 2017, the Assistant to the President                or revise various model aspects, policies             the mandatory nature of these models
                                                   and Chief of Staff issued a                             and design components; in particular,                 would force many providers who lack
                                                   memorandum titled ‘‘Regulatory Freeze                   many of these comments suggested that                 familiarity, experience, or proper
                                                   Pending Review’’ that instructed                        we should make participation in the                   infrastructure to quickly support care
                                                   Federal agencies to temporarily                         models voluntary instead of mandatory.                redesign efforts for a new bundled
                                                   postpone the effective date for 60 days                 We did not respond to these comments                  payment system. Many commenters
                                                   from the date of the memorandum for                     in the May 19, 2017 final delay rule, as              were concerned that the mandatory
                                                   regulations that had been published in                  the comments were out of scope of that                nature of these models might harm
                                                   the Federal Register but had not taken                  rulemaking, but we stated that we might               patients and providers before CMS
                                                   effect, for purposes of reviewing the                   take them into consideration in future                knows how these models might affect
                                                   rules and considering potentially                       rulemaking.                                           access to care, quality or outcomes in
                                                   proposing further notice-and-comment                       Our specific proposals are discussed               various locations. Additionally,
                                                   rulemaking. Accordingly, on February                    in the following sections of this                     commenters were concerned that
                                                   17, 2017, we issued a final rule in the                 proposed rule.                                        unrelated services would be
                                                   Federal Register (82 FR 10961) to delay                 III. Provisions of the Proposed                       incorporated into episode prices under
                                                   until March 21, 2017 the effective date                 Regulations                                           the finalized price setting methodology,
                                                   of any provisions of the EPM final rule                                                                       which bases prices on MS–DRGs and
                                                   that were to become effective on                        A. Proposed Cancellation of EPMs and                  identifies excluded, unrelated services
                                                   February 18, 2017. We subsequently                      Cardiac Rehabilitation Incentive                      rather than included, related services
                                                   issued an interim final rule with                       Payment Model                                         based on clinical review. Commenters
                                                   comment (IFC) period in the Federal                        In the January 3, 2017 EPM final rule,             also expressed concern that this pricing
                                                   Register on March 21, 2017 (referred to                 we established three bundled payment                  approach would result in diagnosis
                                                   in this proposed rule as the ‘‘March 21,                models for acute myocardial infarction                codes that would be classified as
                                                   2017 IFC’’) (82 FR 14464). The March                    (AMI), coronary artery bypass graft                   included services, when in fact these
                                                   21, 2017 IFC further delayed the                        (CABG), and surgical hip/femur fracture               services have no clinical relevance to
                                                   effective date of the provisions that were              treatment (SHFFT) episodes, and a                     the episode(s). Commenters were further
                                                   to take effect March 21, 2017 until May                 Cardiac Rehabilitation (CR) incentive                 concerned with the fact that CMS will
                                                   20, 2017, further delayed the                           payment model. These models are                       progressively incorporate regional data
                                                   applicability date of the EPMs and CR                   similar to other Innovation Center                    into EPM target prices, where 100
                                                   incentive payment model provisions                      models and focus on more complex                      percent of the EPM target price would
                                                   until October 1, 2017, and further                      cases where we believe improvements                   be based on regional data by
                                                   delayed the effective date of the                       in care coordination and other care                   performance year 4. Commenters also
                                                   conforming CJR model changes until                      redesign efforts offer the potential for              took issue with the quality measures
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                                                   October 1, 2017. In the March 21, 2017                  improved patient outcomes and more                    established for the SHFFT model,
                                                   IFC, we also solicited public comment                   efficient use of resources. Many                      stating that these measures are not
                                                   on further delaying the applicability                   stakeholders, including commenters                    clinically related to the target
                                                   date for the EPMs and CR incentive                      responding to the March 21, 2017 IFC,                 population and are inappropriate for use
                                                   payment provisions, as well as the                      have expressed concerns about the                     in assessing the care provided to
                                                   effective date for the conforming                       provider burden and challenges these                  beneficiaries in the SHFFT model. In
                                                   changes to the CJR model from October                   new models present. As we noted in the                addition, commenters requested
                                                   1, 2017 until January 1, 2018 to allow                  May 19, 2017 final delay rule (82 FR                  revisions to the CABG EPM to allow
                                                   for additional notice-and-comment                       22896), which finalized a January 1,                  participants the option to use a CABG


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                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                          39313

                                                   composite score developed by the                        develop the Innovation Center’s                       of this bundled payment approach, and
                                                   Society of Thoracic Surgeons (STS)                      portfolio of models, we may revisit this              would stimulate the rapid development
                                                   rather than the all-cause mortality                     model and will consider stakeholder                   of new evidence-based knowledge.
                                                   measure.                                                feedback for a potential new voluntary                Testing the model in this manner would
                                                     Commenters also expressed concerns                    initiative.                                           also allow us to learn more about
                                                   about the design of the CR incentive                                                                          patterns of inefficient utilization of
                                                   payment model waivers. Commenters                       B. Proposed Changes to the CJR Model
                                                                                                                                                                 health care services and how to
                                                   stated that current direct supervision                  Participation Requirements                            incentivize the improvement of quality
                                                   requirements would continue to                          1. Proposed Voluntary Participation                   for common LEJR procedure episodes.
                                                   contribute to a lack of access to cardiac               Election (Opt-In) for Certain MSAs and                   After further consideration of
                                                   rehabilitation services and would                       Low-Volume and Rural Hospitals                        stakeholder feedback, including
                                                   inhibit providers’ ability to redesign                                                                        responses we received on the March 21,
                                                                                                              The CJR model began on April 1,
                                                   care for the CR incentive payment                                                                             2017 IFC, we are proposing certain
                                                                                                           2016. The CJR model is currently in the
                                                   model. Commenters suggested                                                                                   revisions to the mandatory participation
                                                                                                           second performance year, which
                                                   broadening the CR physician                                                                                   requirements for the CJR model to allow
                                                                                                           includes episodes ending on or after
                                                   supervision waiver because the current                                                                        us to continue to evaluate the effects of
                                                                                                           January 1, 2017 and on or before
                                                   waivers would not cover non-model                                                                             the model while limiting the geographic
                                                                                                           December 31, 2017. The third
                                                   beneficiaries who might be obtaining                                                                          reach of our current mandatory models.
                                                                                                           performance year, which includes all
                                                   services concurrently with model                                                                              Specifically, we are proposing that the
                                                                                                           CJR episodes ending on or after January
                                                   participants and are therefore not                                                                            CJR model would continue on a
                                                                                                           1, 2018 and on or before December 31,                 mandatory basis in approximately half
                                                   sufficient. Other commenters were
                                                   concerned with the precedence rules for                 2018, would necessarily incorporate                   of the selected geographic areas (that is,
                                                   model overlap with Models 2, 3 and 4                    episodes beginning before January 2018.               34 of the 67 selected geographic areas),
                                                   of the Innovation Center’s Bundled                      The fifth, and last, performance year                 with an exception for low-volume and
                                                   Payments for Care Improvement (BPCI)                    would end on December 31, 2020.                       rural hospitals, and continue on a
                                                   initiative.                                             Currently, with limited exceptions,                   voluntary basis in the other areas (that
                                                     In the May 19, 2017 final delay rule                  hospitals located in the 67 geographic                is, 33 of the 67 selected geographic
                                                   (82 FR 22895), we stated that we might                  areas selected for participation in the               areas).
                                                   consider these public comments in                       CJR model must participate in the                        The geographic areas for the CJR
                                                   future rulemaking. Based on our                         model through December 31, 2020; that                 model are certain Metropolitan
                                                   additional review and consideration of                  is, their participation in the CJR model              Statistical Areas (MSAs) that were
                                                   this stakeholder feedback, we have                      is mandatory unless the hospital is an                selected following the requirements in
                                                   concluded that certain aspects of the                   episode initiator for a lower-extremity               § 510.105 as discussed in the CJR model
                                                   design of the EPMs and the CR incentive                 joint replacement (LEJR) episode in the               final rule (80 FR 73297 through 73299).
                                                   payment model should be improved and                    risk-bearing period of Models 2 or 4 of               In § 510.2, an MSA is defined as a core-
                                                   more fully developed prior to the start                 the BPCI initiative. Hospitals with a                 based statistical area associated with at
                                                   of the models, and that moving forward                  CCN primary address in the 67 selected                least one urbanized area that has a
                                                   with the implementation of the EPMs                     geographic areas that participated in                 population of at least 50,000. In
                                                   and CR incentive payment model as put                   Model 1 of the BPCI initiative, which                 selecting the 67 MSAs for inclusion in
                                                   forth in the January 3, 2017 EPM final                  ended on December 31, 2016, began                     the CJR model, the 196 eligible MSAs
                                                   rule would not be in the best interest of               participating in the CJR model when                   were stratified into 8 groups based on
                                                   beneficiaries or providers at this time.                their participation in the BPCI initiative            MSA average wage adjusted historic
                                                   Based on our acknowledgment of the                      ended.                                                LEJR episode payments and MSA
                                                   many concerns about the design of these                    Based on smaller, voluntary tests of               population size (80 FR 41207).
                                                   models articulated by stakeholders, we                  episode-based payment models and                      Specifically, we classified MSAs
                                                   are proposing to cancel the EPMs and                    demonstrations, such as the Acute Care                according to their average LEJR episode
                                                   CR incentive payment model before                       Episode (ACE) demonstration and the                   payment into four categories based on
                                                   they begin. Accordingly, we propose to                  BPCI initiative, that have indicated a                the 25th, 50th and 75th percentiles of
                                                   rescind 42 CFR part 512 in its entirety.                potential to improve beneficiaries’ care              the distribution of the 196 potentially
                                                     We seek public comment on our                         while reducing costs (see ACE                         selectable MSAs as determined in the
                                                   proposal to cancel the EPMs and CR                      evaluation at: https://                               exclusion rules as applied in the CJR
                                                   incentive payment model.                                downloads.cms.gov/files/cmmi/ace-                     model proposed rule (80 FR 41198).
                                                     We note that, if the proposal to cancel               evaluationreport-final-5-2-14.pdf and                 This approach ranked the MSAs relative
                                                   the EPMs and CR incentive payment                       BPCI evaluation at: https://                          to one another and created four equally
                                                   model is finalized, providers interested                innovation.cms.gov/Files/reports/BPCI-                sized groups of 49. The population
                                                   in participating in bundled payment                     EvalRpt1.pdf), we finalized the CJR                   distribution was divided at the median
                                                   models may still have an opportunity to                 model with mandatory participation in                 point for the MSAs eligible for potential
                                                   do so during calendar year (CY) 2018                    the 67 selected geographic areas so that              selection, creating 8 groups. Of the 196
                                                   via new voluntary bundled payment                       we could further test delivery of better              eligible MSAs, we chose 67 MSAs via a
                                                   models. Building on the BPCI initiative,                care at a lower cost across a wide range              stratified random selection process as
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                                                   the Innovation Center expects to                        of hospitals, including some hospitals                discussed in the CJR model final rule
                                                   develop new voluntary bundled                           that may not otherwise participate, in                (80 FR 73291). In reviewing our
                                                   payment model(s) during CY 2018 that                    many locations across the country. In                 discussion of the MSA selection and the
                                                   would be designed to meet the criteria                  the CJR model final rule (80 FR 73276),               MSA volume needed to provide
                                                   to be an Advanced APM. We also note                     we stated that we believed that by                    adequate statistical power to evaluate
                                                   the strong evidence base and other                      requiring the participation of a large                the impact of the model in the CJR
                                                   positive stakeholder feedback that we                   number of hospitals with diverse                      model final rule (80 FR 73297), we have
                                                   have received regarding the CR                          characteristics, the CJR model would                  determined that reducing the mandatory
                                                   incentive payment model. As we further                  result in a robust data set for evaluation            MSA volume in half by selecting the 34


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                                                   39314                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   MSAs with the highest average wage-                     will cause changes to the nature of the               § 510.2 and discussed in the following
                                                   adjusted historic LEJR episode                          evaluation.                                           paragraphs) would continue to be
                                                   payments for continued mandatory                           To select the 34 MSAs that would                   required to participate in the CJR model.
                                                   participation could still allow us to                   continue to have mandatory                            We are also proposing that hospitals in
                                                   evaluate the effects of the CJR model                   participation (except for low-volume                  the proposed 33 voluntary participation
                                                   across a wide range of providers,                       and rural hospitals), we took the                     MSAs and hospitals that are low-
                                                   including some that might not otherwise                 distribution of average wage-adjusted                 volume or rural (as defined in § 510.2
                                                   participate in the model. Higher                        historic LEJR episode payments for the                and discussed in the following
                                                   payment areas are most likely to have                   67 MSAs using the definition described                paragraphs) would have a one-time
                                                   significant room for improvement in                     in the CJR model final rule, ordered                  opportunity to notify CMS, in the form
                                                   creating efficiencies and greater                       them sequentially by average wage-                    and manner specified by CMS, of their
                                                   variations in practice patterns. Thus, the              adjusted historic LEJR episode                        election to continue their participation
                                                   selection of more expensive MSAs is the                 payments, and then selected the 34                    in the CJR model on a voluntary basis
                                                   most appropriate approach to fulfilling                 MSAs with the highest average                         (opt-in) for performance years 3, 4, and
                                                   the overall priorities of the CJR model                 payments. Under this proposal to                      5. Hospitals that choose to participate in
                                                   to increase efficiencies and savings for                reduce the number of MSAs with                        the CJR model and make a participation
                                                   LEJR episodes while maintaining or                      mandatory participation, the remaining                election that complies with proposed
                                                   improving the overall quality of care.                  33 MSAs would no longer be subject to                 § 510.115 would be subject to all model
                                                      The original determination of the                    the CJR model’s mandatory                             requirements. Hospitals in the proposed
                                                   sample size need in the CJR model final                 participation requirements; that is,                  33 voluntary participation MSAs and
                                                   rule was constructed to be able to                      hospital participation would be                       low-volume and rural hospitals (as
                                                   observe a 2-percent reduction in wage-                  voluntary in these 33 MSAs.                           defined in § 510.2 and discussed in the
                                                   adjusted episode spending after 1 year.                    After dividing the 67 MSAs into 34                 following paragraphs) that do not make
                                                   This amount was chosen based on the                     mandatory and 33 voluntary MSAs as                    a participation election would be
                                                   anticipated amount of the discount                      described previously, we examined                     withdrawn from the CJR model as
                                                   applied in the target price. In                         selected MSA characteristics. In order to             described later in this section of this
                                                   considering the degree of certainty that                determine whether a good balance was                  proposed rule.
                                                   would be needed to generate reliable                    maintained across MSA population size,
                                                                                                           we examined the number of MSAs                           We are proposing to exclude and
                                                   statistical estimates, we assumed a 20
                                                   percent chance of false positive and a 30               below and above the median population                 automatically withdraw low-volume
                                                   percent chance of a false negative. Using               point of the 196 MSAs eligible for                    hospitals in the proposed 34 mandatory
                                                   these parameters, we determined that                    potential selection. We observed that a               participation MSAs, as identified by
                                                   the number of MSAs needed ranged                        good balance of MSA population size                   CMS (see Table 3), from participation in
                                                   from 50 to 150. In order to allow for                   was maintained (17 out of 34 mandatory                the CJR model effective February 1,
                                                   some degree of flexibility, we selected                 and 17 out of 33 voluntary MSAs had                   2018. Since some low-volume hospitals
                                                   75 MSAs, which were narrowed to 67                      a population above the median                         may want to continue their participation
                                                   due to final exclusion criteria.                        population). While the 34 MSAs that                   in the CJR model, we are proposing to
                                                      As we reviewed the CJR model for                     would continue to have mandatory                      allow low-volume hospitals to make a
                                                   this proposed rule, we noted that,                      participation have higher spending on                 one-time, voluntary participation
                                                   excluding quarterly reconciliation                      average, these MSAs all include                       election that complies with the
                                                   amounts, evaluation results from BPCI                   providers with average cost episodes in               proposed § 510.115 in order for the low-
                                                   Model 2 have indicated possible                         addition to providers with high cost                  volume hospital to continues its
                                                   reductions in fee-for-service spending of               episodes. In general, we note that                    participation in the CJR model. We are
                                                   approximately 3 percent on orthopedic                   hospitals located in higher cost areas                proposing to define a low-volume
                                                   surgery episodes for hospitals                          have a greater potential to demonstrate               hospital in § 510.2 as a hospital
                                                   participating in the LEJR episode                       significant decreases in episode                      identified by CMS as having fewer than
                                                   bundle. (https://innovation.cms.gov/                    spending. However, within the higher                  20 LEJR episodes in total across the 3
                                                   Files/reports/bpci-models2-4-                           cost MSAs, there is still significant                 historical years of data used to calculate
                                                   yr2evalrpt.pdf). We examined the                        variation in characteristics and                      the performance year 1 CJR episode
                                                   sample size needed to detect a 3-percent                experiences of the included hospitals.                target prices. Note that under this
                                                   reduction in CJR model episode                          We anticipate the evaluation will be                  definition, all hospitals listed in Table
                                                   spending after 1 year using the same                    able to assess the generalizability of the            3 would meet the definition of a low-
                                                   methodology as described in the CJR                     findings of the CJR model by examining                volume hospital, but this list would not
                                                   model final rule. We determined that we                 variations of performance within the                  be inclusive of all hospitals that could
                                                   would be able to meet this standard                     participating hospitals who represent a               be identified by CMS as a low-volume
                                                   with 34 MSAs from the higher cost                       wide range of hospital and market                     hospital. For example, a new hospital
                                                   groups. We expect that hospitals in the                 characteristics. Therefore, we are                    (with a new CCN) that opens in a
                                                   higher cost MSAs will be able to achieve                proposing that the CJR model would                    mandatory MSA during the remaining
                                                   similar 3 percent savings given their                   have 34 mandatory participation MSAs                  years of the CJR model would not have
                                                   MSA’s relatively high historic episode                  (identified in Table 1) and 33 voluntary              any LEJR episodes during the historical
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                                                   spending and thus greater opportunities                 participation MSAs (identified in Table               years of data used to calculate the
                                                   for improvements, and their experience                  2) for performance years 3, 4, and 5.                 performance year 1 CJR episode target
                                                   in optimizing clinical care pathways to                    Specifically, we are proposing that,               prices. Under our proposal, we intend
                                                   produce greater efficacies over the first               unless an exclusion in § 510.100(b)                   that any hospital with a new CCN that
                                                   two performance years of the CJR                        applies (that is, for certain hospitals that          comes into existence after the proposed
                                                   model. We note that the proposed                        participate in the BPCI initiative),                  voluntary participation election period
                                                   changes to the model, including the                     participant hospitals in the proposed 34              would not be required and/or eligible to
                                                   focus on higher cost MSAs and the                       mandatory participation MSAs that are                 join the CJR model. Note that our
                                                   reduced number of mandatory MSAs,                       not low-volume or rural (as defined in                proposed policy for new hospitals


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                                                                                Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                                                                                 39315

                                                   would not be applicable in the case of                                     participation in the CJR model.                                              these hospitals would continue to be
                                                   a reorganization event where the                                           Specifically, we are proposing that rural                                    required to participate in the CJR model
                                                   remaining entity is a hospital with a                                      hospitals (as defined in § 510.2) with a                                     even if they subsequently become a
                                                   CCN that was participating in the CJR                                      CCN primary address in the 34                                                rural hospital. Similarly, we are
                                                   model prior to the reorganization event;                                   mandatory participation MSAs would                                           proposing that a rural hospital that
                                                   consistent with our current policy, such                                   have a one-time opportunity to opt-in to                                     makes a voluntary participation election
                                                   hospital would continue participation                                      continue its participation in the CJR                                        during the one-time opportunity would
                                                   in the CJR model regardless of whether                                     model during the proposed voluntary                                          be required to continue participating in
                                                   all predecessor hospitals were                                             participation election period. We are                                        the CJR model if that hospital no longer
                                                   participant hospitals prior to the                                         proposing that a hospital’s change in
                                                                                                                                                                                                           meets the definition of rural hospital in
                                                   reorganization event.                                                      rural status after the end of the
                                                      We are also proposing to exclude and                                                                                                                 § 510.2. We are proposing this approach
                                                                                                                              voluntary participation election period
                                                   automatically withdraw rural hospitals                                     would not change the hospital’s CJR                                          so that CMS can identify the hospitals,
                                                   from participation in the CJR model                                        model participation requirements.                                            by CCN, that would participate in the
                                                   effective February 1, 2018. Since some                                     Specifically, we are proposing that                                          model for the remainder of performance
                                                   rural hospitals may want to continue                                       hospitals in the proposed 34 mandatory                                       year 3 and performance years 4 and 5
                                                   their participation in the CJR model, we                                   participation MSAs that are neither low-                                     at the conclusion of the proposed
                                                   are proposing to allow rural hospitals to                                  volume or rural hospitals during the                                         voluntary participation election period
                                                   make a one-time, voluntary                                                 proposed voluntary participation                                             and so that there would be less
                                                   participation election that complies                                       election period would be required to                                         confusion about which hospitals are CJR
                                                   with the proposed § 510.115 in order for                                   participate in the CJR model for                                             model participants. We seek comment
                                                   the rural hospital to continues its                                        performance years 3, 4, and 5, and that                                      on this proposal.

                                                                                                                   TABLE 1—CJR MANDATORY PARTICIPATION MSAS
                                                                                                                                                                                                                                                            Wage-adjusted
                                                                                                                                                                                                                                                              episode
                                                         MSA                                                                                              MSA name                                                                                           payments
                                                                                                                                                                                                                                                               (in $)

                                                   10420   .............     Akron, OH ................................................................................................................................................................           $28,081
                                                   11700   .............     Asheville, NC ...........................................................................................................................................................             27,617
                                                   12420   .............     Austin-Round Rock, TX ...........................................................................................................................................                     28,960
                                                   13140   .............     Beaumont-Port Arthur, TX .......................................................................................................................................                      32,544
                                                   17140   .............     Cincinnati, OH-KY-IN ..............................................................................................................................................                   28,074
                                                   18580   .............     Corpus Christi, TX ...................................................................................................................................................                30,700
                                                   20020   .............     Dothan, AL ..............................................................................................................................................................             30,710
                                                   22500   .............     Florence, SC ...........................................................................................................................................................              27,901
                                                   23540   .............     Gainesville, FL .........................................................................................................................................................             29,370
                                                   24780   .............     Greenville, NC .........................................................................................................................................................              27,446
                                                   25420   .............     Harrisburg-Carlisle, PA ............................................................................................................................................                  28,360
                                                   26300   .............     Hot Springs, AR ......................................................................................................................................................                29,621
                                                   28660   .............     Killeen-Temple, TX ..................................................................................................................................................                 27,355
                                                   31080   .............     Los Angeles-Long Beach-Anaheim, CA .................................................................................................................                                  28,219
                                                   31180   .............     Lubbock, TX ............................................................................................................................................................              29,524
                                                   32820   .............     Memphis, TN-MS-AR ..............................................................................................................................................                      28,916
                                                   33100   .............     Miami-Fort Lauderdale-West Palm Beach, FL ........................................................................................................                                    33,072
                                                   33740   .............     Monroe, LA ..............................................................................................................................................................             30,431
                                                   33860   .............     Montgomery, AL ......................................................................................................................................................                 30,817
                                                   35300   .............     New Haven-Milford, CT ...........................................................................................................................................                     27,529
                                                   35380   .............     New Orleans-Metairie, LA .......................................................................................................................................                      29,562
                                                   35620   .............     New York-Newark-Jersey City, NY-NJ-PA .............................................................................................................                                   31,076
                                                   36420   .............     Oklahoma City, OK .................................................................................................................................................                   27,267
                                                   36740   .............     Orlando-Kissimmee-Sanford, FL .............................................................................................................................                           29,259
                                                   37860   .............     Pensacola-Ferry Pass-Brent, FL .............................................................................................................................                          29,485
                                                   38300   .............     Pittsburgh, PA .........................................................................................................................................................              30,886
                                                   38940   .............     Port St. Lucie, FL ....................................................................................................................................................               30,423
                                                   39340   .............     Provo-Orem, UT ......................................................................................................................................................                 28,852
                                                   39740   .............     Reading, PA ............................................................................................................................................................              28,679
                                                   42680   .............     Sebastian-Vero Beach, FL ......................................................................................................................................                       28,015
                                                   45300   .............     Tampa-St. Petersburg-Clearwater, FL ....................................................................................................................                              32,424
                                                   45780   .............     Toledo, OH ..............................................................................................................................................................             28,658
                                                   46220   .............     Tuscaloosa, AL ........................................................................................................................................................               31,789
                                                   46340   .............     Tyler, TX ..................................................................................................................................................................          30,955
sradovich on DSK3GMQ082PROD with PROPOSALS2




                                                                                                                    TABLE 2—CJR VOLUNTARY PARTICIPATION MSAS
                                                                                                                                                                                                                                                            Wage-adjusted
                                                                                                                                                                                                                                                              episode
                                                         MSA                                                                                              MSA name                                                                                           payments
                                                                                                                                                                                                                                                               (in $)

                                                   10740 .............       Albuquerque, NM ....................................................................................................................................................                 $25,892
                                                   12020 .............       Athens-Clarke County, GA ......................................................................................................................................                       25,394



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                                                   39316                        Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                                                                        TABLE 2—CJR VOLUNTARY PARTICIPATION MSAS—Continued
                                                                                                                                                                                                                                                              Wage-adjusted
                                                                                                                                                                                                                                                                episode
                                                         MSA                                                                                               MSA name                                                                                            payments
                                                                                                                                                                                                                                                                 (in $)

                                                   13900   .............     Bismarck, ND ..........................................................................................................................................................                   22,479
                                                   14500   .............     Boulder, CO .............................................................................................................................................................                 24,115
                                                   15380   .............     Buffalo-Cheektowaga-Niagara Falls, NY ................................................................................................................                                    26,037
                                                   16020   .............     Cape Girardeau, MO-IL ...........................................................................................................................................                         24,564
                                                   16180   .............     Carson City, NV ......................................................................................................................................................                    26,128
                                                   16740   .............     Charlotte-Concord-Gastonia, NC-SC ......................................................................................................................                                  26,736
                                                   17860   .............     Columbia, MO .........................................................................................................................................................                    25,558
                                                   19500   .............     Decatur, IL ...............................................................................................................................................................               24,846
                                                   19740   .............     Denver-Aurora-Lakewood, CO ................................................................................................................................                               26,119
                                                   20500   .............     Durham-Chapel Hill, NC ..........................................................................................................................................                         25,151
                                                   22420   .............     Flint, MI ....................................................................................................................................................................            24,807
                                                   23580   .............     Gainesville, GA ........................................................................................................................................................                  23,009
                                                   26900   .............     Indianapolis-Carmel-Anderson, IN ..........................................................................................................................                               25,841
                                                   28140   .............     Kansas City, MO-KS ...............................................................................................................................................                        27,261
                                                   30700   .............     Lincoln, NE ..............................................................................................................................................................                27,173
                                                   31540   .............     Madison, WI ............................................................................................................................................................                  24,442
                                                   33340   .............     Milwaukee-Waukesha-West Allis, WI ......................................................................................................................                                  25,698
                                                   33700   .............     Modesto, CA ............................................................................................................................................................                  24,819
                                                   34940   .............     Naples-Immokalee-Marco Island, FL ......................................................................................................................                                  27,120
                                                   34980   .............     Nashville-Davidson-Murfreesboro-Franklin, TN ......................................................................................................                                       26,880
                                                   35980   .............     Norwich-New London, CT .......................................................................................................................................                            25,780
                                                   36260   .............     Ogden-Clearfield, UT ..............................................................................................................................................                       25,472
                                                   38900   .............     Portland-Vancouver-Hillsboro, OR-WA ...................................................................................................................                                   22,604
                                                   40980   .............     Saginaw, MI .............................................................................................................................................................                 25,488
                                                   41180   .............     St. Louis, MO-IL ......................................................................................................................................................                   26,425
                                                   41860   .............     San Francisco-Oakland-Hayward, CA ....................................................................................................................                                    23,716
                                                   42660   .............     Seattle-Tacoma-Bellevue, WA ................................................................................................................................                              23,669
                                                   43780   .............     South Bend-Mishawaka, IN-MI ...............................................................................................................................                               23,143
                                                   44420   .............     Staunton-Waynesboro, VA ......................................................................................................................................                            25,539
                                                   45820   .............     Topeka, KS ..............................................................................................................................................................                 24,273
                                                   48620   .............     Wichita, KS ..............................................................................................................................................................                25,945


                                                        TABLE 3—LOW-VOLUME HOSPITALS LOCATED IN THE MANDATORY MSAS ELIGIBLE TO OPT-IN DURING VOLUNTARY
                                                                                               ELECTION PERIOD
                                                         CCN                                                     Hospital name                                                          MSA                                              MSA Title

                                                   010034    ...........     Community Hospital, Inc .........................................................                                33860        Montgomery, AL.
                                                   010062    ...........     Wiregrass Medical Center ......................................................                                  20020        Dothan, AL.
                                                   010095    ...........     Hale County Hospital ..............................................................                              46220        Tuscaloosa, AL.
                                                   010097    ...........     Elmore Community Hospital ...................................................                                    33860        Montgomery, AL.
                                                   010108    ...........     Prattville Baptist Hospital ........................................................                             33860        Montgomery, AL.
                                                   010109    ...........     Pickens County Medical Center .............................................                                      46220        Tuscaloosa, AL.
                                                   010149    ...........     Baptist Medical Center East ...................................................                                  33860        Montgomery, AL.
                                                   040132    ...........     Leo N. Levi National Arthritis Hospital ....................................                                     26300        Hot Springs, AR.
                                                   050040    ...........     LAC-Olive View-UCLA Medical Center ..................................                                            31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050091    ...........     Community Hospital of Huntington Park ................................                                           31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050137    ...........     Kaiser Foundation Hospital-Panorama City ...........................                                             31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050138    ...........     Kaiser Foundation Hospital-Los Angeles ...............................                                           31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050139    ...........     Kaiser Foundation Hospital-Downey ......................................                                         31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050158    ...........     Encino Hospital Medical Center .............................................                                     31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050205    ...........     Glendora Community Hospital ................................................                                     31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050373    ...........     LAC+USC Medical Center ......................................................                                    31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050378    ...........     Pacifica Hospital of the Valley ................................................                                 31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050411    ...........     Kaiser Foundation Hospital-South Bay ...................................                                         31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050468    ...........     Memorial Hospital of Gardena ................................................                                    31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050543    ...........     College Hospital Costa Mesa .................................................                                    31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050548    ...........     Fairview Developmental Center ..............................................                                     31080        Los Angeles-Long              Beach-Anaheim,          CA.
sradovich on DSK3GMQ082PROD with PROPOSALS2




                                                   050552    ...........     Motion Picture & Television Hospital ......................................                                      31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050561    ...........     Kaiser Foundation Hospital-West Los Angeles ......................                                               31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050609    ...........     Kaiser Foundation Hospital-Orange County-Anaheim ...........                                                     31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050641    ...........     East Los Angeles Doctors Hospital ........................................                                       31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050677    ...........     Kaiser Foundation Hospital-Woodland Hills ...........................                                            31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050723    ...........     Kaiser Foundation Hospital-Baldwin Park ..............................                                           31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050738    ...........     Greater El Monte Community Hospital ...................................                                          31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050744    ...........     Anaheim Global Medical Center .............................................                                      31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050747    ...........     South Coast Global Medical Center .......................................                                        31080        Los Angeles-Long              Beach-Anaheim,          CA.
                                                   050751    ...........     Miracle Mile Medical Center ...................................................                                  31080        Los Angeles-Long              Beach-Anaheim,          CA.



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                                                                               Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                                           39317

                                                        TABLE 3—LOW-VOLUME HOSPITALS LOCATED IN THE MANDATORY MSAS ELIGIBLE TO OPT-IN DURING VOLUNTARY
                                                                                         ELECTION PERIOD—Continued
                                                         CCN                                                 Hospital name                                                  MSA                           MSA Title

                                                   050771   ...........     Coast Plaza Hospital ..............................................................                31080   Los Angeles-Long Beach-Anaheim, CA.
                                                   050776   ...........     College Medical Center ..........................................................                  31080   Los Angeles-Long Beach-Anaheim, CA.
                                                   050779   ...........     Martin Luther King Jr. Community Hospital ............................                             31080   Los Angeles-Long Beach-Anaheim, CA.
                                                   050780   ...........     Foothill Medical Center ...........................................................                31080   Los Angeles-Long Beach-Anaheim, CA.
                                                   050782   ...........     Casa Colina Hospital ..............................................................                31080   Los Angeles-Long Beach-Anaheim, CA.
                                                   070038   ...........     Connecticut Hospice Inc .........................................................                  35300   New Haven-Milford, CT.
                                                   070039   ...........     Masonic Home and Hospital ...................................................                      35300   New Haven-Milford, CT.
                                                   100048   ...........     Jay Hospital ............................................................................          37860   Pensacola-Ferry Pass-Brent, FL.
                                                   100130   ...........     Lakeside Medical Center ........................................................                   33100   Miami-Fort Lauderdale-West Palm Beach, FL.
                                                   100240   ...........     Anne Bates Leach Eye Hospital .............................................                        33100   Miami-Fort Lauderdale-West Palm Beach, FL.
                                                   100277   ...........     Douglas Gardens Hospital ......................................................                    33100   Miami-Fort Lauderdale-West Palm Beach, FL.
                                                   100320   ...........     Poinciana Medical Center .......................................................                   36740   Orlando-Kissimmee-Sanford, FL.
                                                   100326   ...........     Promise Hospital of Miami ......................................................                   33100   Miami-Fort Lauderdale-West Palm Beach, FL.
                                                   190005   ...........     University Medical Center New Orleans .................................                            35380   New Orleans-Metairie, LA.
                                                   190011   ...........     University Health Conway .......................................................                   33740   Monroe, LA.
                                                   190079   ...........     St. Charles Parish Hospital .....................................................                  35380   New Orleans-Metairie, LA.
                                                   190245   ...........     Monroe Surgical Hospital ........................................................                  33740   Monroe, LA.
                                                   190300   ...........     St. Charles Surgical Hospital LLC ..........................................                       35380   New Orleans-Metairie, LA.
                                                   190302   ...........     Omega Hospital LLC ..............................................................                  35380   New Orleans-Metairie, LA.
                                                   190308   ...........     St. Bernard Parish Hospital ....................................................                   35380   New Orleans-Metairie, LA.
                                                   190313   ...........     New Orleans East Hospital .....................................................                    35380   New Orleans-Metairie, LA.
                                                   250012   ...........     Alliance Healthcare System ....................................................                    32820   Memphis, TN-MS-AR.
                                                   250126   ...........     North Oak Regional Medical Center .......................................                          32820   Memphis, TN-MS-AR.
                                                   250167   ...........     Methodist Olive Branch Hospital ............................................                       32820   Memphis, TN-MS-AR.
                                                   310058   ...........     Bergen Regional Medical Center ............................................                        35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330080   ...........     Lincoln Medical & Mental Health Center ................................                            35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330086   ...........     Montefiore Mount Vernon Hospital .........................................                         35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330100   ...........     New York Eye and Ear Infirmary ............................................                        35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330199   ...........     Metropolitan Hospital Center ..................................................                    35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330231   ...........     Queens Hospital Center .........................................................                   35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330233   ...........     Brookdale Hospital Medical Center ........................................                         35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330240   ...........     Harlem Hospital Center ..........................................................                  35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330385   ...........     North Central Bronx Hospital ..................................................                    35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330396   ...........     Woodhull Medical and Mental Health Center .........................                                35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330397   ...........     Interfaith Medical Center .........................................................                35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330399   ...........     St. Barnabas Hospital .............................................................                35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   330405   ...........     Helen Hayes Hospital .............................................................                 35620   New York-Newark-Jersey City, NY-NJ-PA.
                                                   360241   ...........     Edwin Shaw Rehab Institute ...................................................                     10420   Akron, OH.
                                                   370011   ...........     Mercy Hospital El Reno Inc. ...................................................                    36420   Oklahoma City, OK.
                                                   370158   ...........     Purcell Municipal Hospital .......................................................                 36420   Oklahoma City, OK.
                                                   370199   ...........     Lakeside Women’s Hospital A Member of INTEGRIS Health                                              36420   Oklahoma City, OK.
                                                   370206   ...........     Oklahoma Spine Hospital .......................................................                    36420   Oklahoma City, OK.
                                                   370215   ...........     Oklahoma Heart Hospital ........................................................                   36420   Oklahoma City, OK.
                                                   370234   ...........     Oklahoma Heart Hospital South .............................................                        36420   Oklahoma City, OK.
                                                   390184   ...........     Highlands Hospital ..................................................................              38300   Pittsburgh, PA.
                                                   390217   ...........     Excela Health Frick Hospital ...................................................                   38300   Pittsburgh, PA.
                                                   420057   ...........     McLeod Medical Center-Darlington ........................................                          22500   Florence, SC.
                                                   420066   ...........     Lake City Community Hospital ...............................................                       22500   Florence, SC.
                                                   440131   ...........     Baptist Memorial Hospital Tipton ............................................                      32820   Memphis, TN-MS-AR.
                                                   450143   ...........     Seton Smithville Regional Hospital .........................................                       12420   Austin-Round Rock, TX.
                                                   450605   ...........     Care Regional Medical Center ...............................................                       18580   Corpus Christi, TX.
                                                   450690   ...........     University of Texas Health Science Center at Tyler ..............                                  46340   Tyler, TX.
                                                   450865   ...........     Seton Southwest Hospital .......................................................                   12420   Austin-Round Rock, TX.
                                                   460043   ...........     Orem Community Hospital ......................................................                     39340   Provo-Orem, UT.
                                                   670087   ...........     Baylor Scott & White Emergency Medical Center-Cedar                                                12420   Austin-Round Rock, TX.
                                                                               Park.



                                                     As stated previously in this section,                                this proposal would be published, we                          would begin February 1, 2018, and
                                                   we are proposing a one-time                                            propose that the voluntary participation                      continue through the end of the CJR
sradovich on DSK3GMQ082PROD with PROPOSALS2




                                                   participation election period for                                      election period would begin January 1,                        model, unless sooner terminated. Thus,
                                                   hospitals with a CCN primary address                                   2018, and would end January 31, 2018.                         participant hospitals located in the
                                                   located in the voluntary participation                                 We must receive the participation                             voluntary participation MSAs listed in
                                                   MSAs listed in Table 2, low-volume                                     election letter no later than January 31,                     Table 2, the low-volume hospitals
                                                   hospitals specified in Table 3, and rural                              2018. We are proposing that the                               specified in Table 3, and the rural
                                                   hospitals in the mandatory participation                               hospital’s participation election letter                      hospitals in the 34 mandatory
                                                   MSAs. Based on the anticipated timing                                  would serve as the model participant                          participation MSAs that elect voluntary
                                                   for when the final rule implementing                                   agreement. Voluntary participation                            participation would continue in the CJR


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                                                   39318                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   model without any disruption to                         ensure adequate time for hospitals to                 truthful, including, but not limited to,
                                                   episodes attributed to performance year                 make a participation election while                   the participation election letter and any
                                                   3, which begins January 1, 2018.                        minimizing the time period during                     quality data or other information that
                                                   Participant hospitals located in the                    which participation in performance year               CMS uses in reconciliation processes or
                                                   voluntary participation MSAs listed in                  3 remains mandatory for all eligible                  payment calculations or both.
                                                   Table 2, the low-volume hospitals                       hospitals in the 67 selected MSAs. We                    We solicit feedback on this proposed
                                                   specified in Table 3, and the rural                     note that based on timing                             certification requirement, including
                                                   hospitals in the 34 mandatory                           considerations, including potential                   whether the certification should include
                                                   participation MSAs that do not elect                    changes to the anticipated date of                    different or additional attestations.
                                                   voluntary participation would be                        publication of the final rule, we may                    Finally, we are proposing that the
                                                   withdrawn from the model effective                      modify the dates of the voluntary                     participation election letter be signed by
                                                   February 1, 2018, and all of their                      participation election period and make                the hospital administrator, chief
                                                   performance year 3 episodes up to and                   conforming changes to the dates for                   financial officer (CFO) or chief
                                                   including that date would be canceled,                  voluntary participation in performance                executive officer (CEO).
                                                                                                           year 3. We seek comment on the                           We are proposing that, if the
                                                   so that these hospitals would not be
                                                                                                           proposed voluntary participation                      hospital’s participation election letter
                                                   subject to a reconciliation payment or
                                                                                                           election period, including whether we                 meets these criteria, we would accept
                                                   repayment amount for performance year                                                                         the hospital’s participation election.
                                                   3. We are proposing to implement our                    should instead require the participation
                                                                                                           election to be made by December 31,                   Once a participation election for the CJR
                                                   proposed opt-in approach in this                                                                              model is made and is effective, the
                                                   manner as a way to balance several                      2017 (that is, prior to the start of
                                                                                                           performance year 3) or if a different or              participant hospital would be required
                                                   goals, including establishing a uniform                                                                       to participate in all activities related to
                                                   time period for hospitals to make a                     later voluntary election period may be
                                                                                                           preferable.                                           the CJR model for the remainder of the
                                                   voluntary participation election,                                                                             CJR model unless the hospital’s
                                                   avoiding disruption of episodes for                        To specify their participation election,
                                                                                                           we are proposing that hospitals would                 participation is terminated sooner.
                                                   hospitals that elect to continue their                                                                           We note that episodes end 90 days
                                                   participation in the CJR model, and                     submit a written participation election
                                                                                                                                                                 after discharge for the CJR model and
                                                   preventing confusion about whether a                    letter to CMS in a form and manner
                                                                                                                                                                 episodes that do not start and end in the
                                                   hospital is participating in performance                specified by CMS. We intend to provide
                                                                                                                                                                 same calendar year will be attributed to
                                                   year 3 of the model. Specifically, we                   templates that can easily be completed
                                                                                                                                                                 the following performance year. For
                                                   considered whether adopting a                           and submitted in order to limit the
                                                                                                                                                                 example, episodes that start in October
                                                   voluntary election period that ended                    burden on hospitals seeking to opt-in. If
                                                                                                                                                                 2017 and do not end on or before
                                                   prior to the start of performance year 3                a hospital with a CCN primary address
                                                                                                                                                                 December 31, 2017 are attributed to
                                                   would be less confusing and less                        located in the voluntary participation
                                                                                                                                                                 performance year 3. Our methodology
                                                   administratively burdensome in terms                    MSAs or a low-volume or rural hospital
                                                                                                                                                                 for attributing these episodes to the
                                                   of whether a hospital is participating in               in the mandatory participation MSAs                   subsequent performance year would be
                                                   performance year 3. To implement this                   does not submit a written participation               problematic in cases where a hospital
                                                   approach, the voluntary participation                   election letter by January 31, 2018, the              with a CCN primary address located in
                                                   election period would have to close by                  hospital’s participation in performance               a voluntary participation MSA or a rural
                                                   December 31, 2017, such that each                       year 3 would end, all of its performance              hospital or a low-volume hospital, as
                                                   hospital would have made its                            year 3 episodes would be canceled, and                specified by CMS, has not elected to
                                                   determination regarding participation in                it would not be included in the CJR                   voluntarily continue participating in the
                                                   performance year 3 before the start of                  model for performance years 4 and 5.                  model. Therefore, for a hospital with a
                                                   performance year 3 (note that episodes                     We are proposing a number of                       CCN primary address located in a
                                                   attributed to performance year 3 would                  requirements for the participation                    voluntary participation MSA, or a rural
                                                   still be canceled under this alternative                election letter and that the hospital’s               hospital or a low-volume hospital, as
                                                   approach for eligible hospitals that do                 participation election letter would serve             specified by CMS, that does not elect
                                                   not make a participation election).                     as the model participant agreement.                   voluntary participation during the one-
                                                   Because the voluntary election period                   First, we are proposing that the                      time voluntary participation election
                                                   under this approach would conclude in                   participation election letter must                    period, we are proposing that all
                                                   advance of the relevant CJR model                       include all of the following:                         episodes attributed to performance year
                                                   performance year, this approach could                      • Hospital Name.
                                                                                                              • Hospital Address.                                3 for that hospital would be canceled
                                                   simplify our administration of                             • Hospital CCN.                                    and would not be included in payment
                                                   performance year 3 by establishing in                      • Hospital contact name, telephone                 reconciliation. Such hospitals would
                                                   advance of performance year 3 whether                   number, and email address.                            have their participation in the CJR
                                                   a hospital would be a participant                          • If selecting the Advanced APM                    model withdrawn effective February 1,
                                                   hospital for the totality of performance                track, attestation of CEHRT use as                    2018. We note that this proposal is
                                                   year 3. However, given the timing of this               defined in § 414.1305.                                consistent with our policy for treatment
                                                   proposed rulemaking, we were not                           Second, we are proposing that the                  of episodes that have not ended by or
                                                   confident that hospitals would have                     participation election letter must                    on the last day of performance year 5
sradovich on DSK3GMQ082PROD with PROPOSALS2




                                                   sufficient time to make a voluntary                     include a certification in a form and                 and cannot be included in performance
                                                   participation election by December 31,                  manner specific by CMS that—                          year 5 reconciliation due to the end of
                                                   2017. Thus, we are proposing that the                      • The hospital will comply with all                the model (see Table 8 of the CJR model
                                                   voluntary participation election period                 requirements of the CJR model (that is,               final rule (80 FR 73326)).
                                                   would occur during the first month of                   42 CFR 510) and all other laws and                       We are proposing to define a low-
                                                   performance year 3 (that is, throughout                 regulations that are applicable to its                volume hospital, mandatory MSA, and
                                                   January 2018) and would apply                           participation in the CJR model; and                   voluntary MSA, to change the definition
                                                   prospectively beginning on February 1,                     • Any data or information submitted                of participant hospital in § 510.2, and to
                                                   2018. We believe this approach will best                to CMS will be accurate, complete and                 amend the specification of the


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                                                                                Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                                                           39319

                                                   geographic areas in § 510.105(a) to                                    election would document each                                           none of the 67 selected MSAs would be
                                                   reflect the establishment of mandatory                                 hospital’s choice, whereas under an opt-                               feasible.
                                                   and voluntary participation MSAs. We                                   out approach there could be instances                                     As discussed in section V. of this
                                                   are proposing to codify the opt-in                                     where hospitals fail to timely notify                                  proposed rule, the estimated impact of
                                                   proposal in new § 510.115. In addition,                                CMS of their desire to withdraw from                                   the changes to the CJR model proposed
                                                   we are proposing to post the list of                                   participation and are thus included in                                 in this proposed rule reduces the overall
                                                   mandatory participation MSAs,                                          the model and subject to potential                                     estimated savings for performance years
                                                   voluntary participation MSAs, and low-                                 repayment amounts. For these reasons,                                  3, 4, and 5 by $90 million. If voluntary
                                                   volume hospitals on the CJR model Web                                  we have proposed an opt-in approach.                                   participation was allowed in all of the
                                                   site.                                                                  We seek comment on this proposal and                                   67 selected MSAs, the overall estimated
                                                      We believe our proposed opt-in                                      the alternative considered.                                            model impact would no longer show
                                                   approach to allow for voluntary                                           We also believe that our proposed                                   savings, and would likely result in
                                                   participation in the CJR model by                                      approach to make the CJR model                                         additional costs to the Medicare
                                                   certain hospitals would be less                                        primarily concentrated in the higher                                   program. If participation was limited to
                                                   burdensome on such hospitals than a                                    cost MSAs where the opportunity for                                    the proposed 34 mandatory
                                                   potential alternative approach of                                      further efficiencies and care redesign                                 participation MSAs and voluntary
                                                   requiring hospitals to opt-out of the                                  may be more likely and allow voluntary                                 participation was not allowed in any
                                                   model. In developing the proposal to                                   participation in the lower cost MSAs                                   MSA, the impact to the overall
                                                   allow eligible hospitals located in the                                and for low-volume and rural hospitals                                 estimated model savings over the last
                                                   proposed 33 voluntary participation                                    allows the Innovation Center to focus on                               three years of the model would be closer
                                                   MSAs and low-volume and rural                                          areas where the opportunity for further                                to $30 million than the $90 million
                                                   hospitals located in the 34 mandatory                                  efficiencies and care redesign may be                                  estimate presented in section V. of this
                                                   participation MSAs to elect voluntary                                  more likely, while still allowing                                      proposed rule, because our modeling,
                                                   participation, we considered whether to                                hospitals in the voluntary MSAs the                                    which does not include assumptions
                                                   propose that hospitals would have to                                   opportunity to participate in the model.                               about behavioral changes that might
                                                   make an affirmative voluntary                                          In developing this proposed rule, we                                   lower fee-for-service spending,
                                                   participation election (that is, an opt-in                             considered that hospitals in the CJR                                   estimates that 60 to 80 hospitals will
                                                   approach) or to propose that these                                     model have been participating for over                                 choose voluntary participation. Since
                                                   hospitals would continue to be required                                a year and a half as of the timing of this                             we estimate that these potential
                                                   to participate in the CJR model unless                                 proposed rule, and we have begun to                                    voluntary participants would be
                                                   written notification was given to CMS to                               give hospitals in the model financial                                  expected to earn only positive
                                                   withdraw the hospital from the CJR                                     and quality results from the first                                     reconciliation payments under the
                                                   model (that is, an opt-out approach). We                               performance year. In many cases,                                       model, these positive reconciliation
                                                   believe an opt-in approach would be                                    participant hospitals have made                                        payments would offset some of the
                                                   less burdensome on hospitals, because it                               investments in care redesign, and we                                   savings garnered from mandatory
                                                   would not require participation in the                                 want to recognize such investments and                                 participants. However, as many current
                                                   CJR model for hospitals located in the                                 commitments to improvement while                                       hospital participants in all of the 67
                                                   proposed 33 voluntary participation                                    reducing the overall number of hospitals                               MSAs are actively invested in the CJR
                                                   MSAs and for low-volume and rural                                      that are required to participate. We also                              model, we are proposing to allow
                                                   hospitals located in the 34 mandatory                                  considered stakeholder feedback that                                   voluntary participation in the 33 MSAs
                                                   participation MSAs unless the hospital                                 suggested we make participation in the                                 that were not selected for mandatory
                                                   affirmatively chose it. Further, we                                    CJR model voluntary, and the model                                     participation and for low-volume and
                                                   believe requiring an affirmative opt-in                                size necessary to detect at least a 3-                                 rural hospitals. We seek comment on
                                                   election would result in less ambiguity                                percent reduction in LEJR episode                                      our proposed approach and the
                                                   about a hospital’s participation                                       spending. Taking these considerations                                  alternatives considered.
                                                   intentions as compared to an opt-out                                   into account, we considered whether                                       A summary of the proposed changes
                                                   approach. Specifically, with an opt-in                                 revising the model to allow for                                        to the CJR model participation
                                                   approach, a hospital’s participation                                   voluntary participation in all, some, or                               requirements is shown in Table 4.

                                                                              TABLE 4—PROPOSED PARTICIPATION REQUIREMENTS FOR HOSPITALS IN THE CJR MODEL
                                                                                                                                                       Required to                     May elect                                         Election
                                                                                                                                                                                                                     Participation
                                                                                                                                                     participate as of                 voluntary                                         effective
                                                                                                                                                                                                                    election period
                                                                                                                                                     February 1, 2018                 participation                                        date

                                                                                                                                     Mandatory Participation MSAs

                                                   All IPPS participant hospitals, except rural and low-volume * .......                             Yes .....................    No .......................                       n/a          n/a
                                                   Rural hospitals * .............................................................................   No .......................   Yes .....................        1/1/2018–1/31/2018     2/1/2018
                                                   Low-volume hospitals (see Table 3) ..............................................                 No .......................   Yes .....................        1/1/2018–1/31/2018     2/1/2018
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                                                                                                                                      Voluntary Participation MSAs

                                                   All IPPS participant hospitals .........................................................          No .......................   Yes .....................        1/1/2018–1/31/2018     2/1/2018
                                                     * Note: Participation requirements are based on the CCN status of the hospital as of January 31, 2018. A change in rural status after the vol-
                                                   untary election period does not affect the participation requirements.




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                                                   39320                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   2. Proposed Codification of CJR Model-                  amount of gainsharing payments for a                  CMS’ Center for Clinical Standards and
                                                   Related Evaluation Participation                        performance year paid to physicians,                  Quality (CCSQ) has recently updated
                                                   Requirements                                            non-physician practitioners, physician                the list of ICD–10 codes used to identify
                                                     We note that for the CJR model                        group practices (PGPs), and non-                      procedures included in the Hip/Knee
                                                   evaluation, the data collection methods                 physician practitioner group practices                Complications measure. We did not
                                                   and key evaluation research questions                   (NPPGPs) must not exceed 50 percent of                intend for our preamble discussions of
                                                   under the proposed reformulated                         the total Medicare approved amounts                   certain ICD–CM codes used, for
                                                   approach (that is, the proposal for                     under the Physician Fee Schedule for                  example, to identify procedures
                                                   voluntary opt-in elections discussed in                 items and services that are furnished to              included in the Hip/Knee
                                                                                                           beneficiaries during episodes that                    Complications measures, and therefore
                                                   section III.B.1 of this proposed rule)
                                                                                                           occurred during the same performance                  the PRO cohorts for the CJR model, to
                                                   would remain similar to the approach
                                                                                                           year for which the CJR participant                    set a policy that would define the
                                                   presented in the CJR model final rule.
                                                                                                           hospital accrued the internal cost                    relevant cohorts for the entirety of the
                                                   The evaluation methodology for the CJR
                                                                                                           savings or earned the reconciliation                  CJR model. We should have also
                                                   model would be consistent with the
                                                                                                           payment that comprises the gainsharing                directed readers to look for the most
                                                   standard Innovation Center approaches
                                                                                                           payment being made (§ 510.500(c)(4)).                 current codes on the CMS quality Web
                                                   we have taken in other voluntary
                                                                                                           Similarly, distribution arrangements are              site at https://www.cms.gov/Medicare/
                                                   models such as the Pioneer Accountable
                                                                                                           limited as specified in § 510.505(b)(8),              Quality-Initiatives-Patient-Assessment-
                                                   Care Organization (ACO) Model.
                                                                                                           and downstream distribution                           Instruments/HospitalQualityInits/
                                                   Cooperation and participation in model-                 arrangements are limited as specified in              Measure-Methodology.html. To ensure
                                                   related activities by all hospitals that                § 510.506(b)(8). These program integrity              that model participants are aware of
                                                   participate in the CJR model would                      safeguards, which are consistent with                 periodic ICD–CM code updates to the
                                                   continue to be extremely important to                   the gainsharing caps in other Innovation              Hip/Knee Complications measure, we
                                                   the evaluation. Therefore, with respect                 Center models, were included to avoid                 are proposing to clarify that participants
                                                   to model-related evaluation activities,                 setting an inappropriate financial                    must use the applicable ICD–CM code
                                                   we propose to add provisions in                         incentive that may result in stinting,                set that is updated and released to the
                                                   § 510.410(b)(1)(i)(G) to specify that CMS               steering or denial of medically                       public each calendar year in April by
                                                   may take remedial action if a participant               necessary care (80 FR 73415 and 73416).               CCSQ and posted on the Hospital
                                                   hospital, or one of its collaborator,                   While we are not proposing in this rule               Quality Initiative Measure Methodology
                                                   collaboration agent, or downstream                      any changes to the gainsharing caps for               Web site (https://www.cms.gov/
                                                   collaboration agent fails to participate in             these models, we have heard various                   medicare/Quality-Initiatives-Patient-
                                                   model-related evaluation activities                     opinions from stakeholders, including                 Assessment-Instruments/Hospital
                                                   conducted by CMS and/or its                             the Medicare Payment Advisory                         QualityInits/Measure-
                                                   contractors for any performance year in                 Commission (MedPAC), on the relative                  Methodology.html) for purposes of
                                                   which the hospital participates. We                     benefit of such limitations on                        reporting each of those measures. CMS
                                                   believe the addition of this provision                  gainsharing and in this proposed rule                 relies on the National Quality Forum
                                                   would make participation and                            we are soliciting comment on this                     (NQF) measure maintenance update and
                                                   collaboration requirements for the CJR                  requirement and any alternative                       review processes to update substantive
                                                   model evaluation clear to all participant               gainsharing caps that may be                          aspects of measures every 3 years.
                                                   hospitals and in particular to hospitals                appropriate to apply to physicians, non-              Through NQF’s measure maintenance
                                                   that are eligible to elect voluntary                    physician practitioners, PGPs, and                    process, NQF endorsed measures are
                                                   participation. We seek comment on our                   NPPGPs.                                               sometimes updated to incorporate
                                                   proposed regulatory change.                                                                                   changes that we believe do not
                                                                                                           C. Maintaining ICD–CM Codes for
                                                   3. Comment Solicitation: Incentivizing                                                                        substantially change the nature of the
                                                                                                           Quality Measures
                                                   Participation in the CJR Model                                                                                measures. Examples of such changes
                                                                                                              In the CJR model final rule (80 FR                 include updated diagnosis or
                                                     In this proposed rule, we are                         73474), we discussed how specific                     procedures codes, changes to patient
                                                   proposing to make participation in the                  International Classification of Diseases              population, definitions, or extension of
                                                   CJR model voluntary in 33 MSAs and                      (ICD)—Clinical Modifications (CM)                     the measure endorsement to apply to
                                                   for low-volume and rural hospitals in                   procedure codes define group of                       other settings. We believe these types of
                                                   the remaining 34 MSAs via the                           procedures included in the Hospital-                  maintenance changes are distinct from
                                                   proposed opt-in election policy                         level risk-standardized complication                  more substantive changes and do not
                                                   discussed in section III.B.1 of this                    rate (RSCR) following elective primary                require the use of the agency’s
                                                   proposed rule. In order to keep hospitals               total hip arthroplasty (THA) and/or total             regulatory process used to update more
                                                   in all MSAs selected for participation in               knee arthroplasty (TKA) (NQF #1550)                   detailed aspects of quality measures.
                                                   the CJR model actively participating in                 (Hip/Knee Complications) measure. In
                                                   the model, we are soliciting comment                    discussing quality measures in general,               D. Clarification of CJR Reconciliation
                                                   on ways to further incentivize eligible                 the ICD–CM codes relative to defining a               Following Hospital Reorganization
                                                   hospitals to elect to continue                          measure cohort are updated annually                   Event
                                                   participating in the CJR model for the                  and are subject to change. For example,                 In the CJR model final rule (80 FR
sradovich on DSK3GMQ082PROD with PROPOSALS2




                                                   remaining years of the model and to                     in the EPM final rule (82 FR 389), we                 73348) rule, we discussed our method of
                                                   further incentivize all participant                     itemized specific ICD–9–CM and ICD–                   setting target prices using all historical
                                                   hospitals to advance care                               10–CM codes for Hip/Knee                              episodes that would represent our best
                                                   improvements, innovation, and quality                   Complications measure. As quality                     estimate of historical volume and
                                                   for beneficiaries throughout LEJR                       measures are refined and maintained,                  payments for participant hospitals when
                                                   episodes.                                               the ICD–CM code values used to                        an acquisition, merger, divestiture, or
                                                     Additionally, we note that, under the                 identify the relevant diagnosis and/or                other reorganization results in a hospital
                                                   CJR refinements established in the                      procedures included in quality                        with a new CCN. When a reorganization
                                                   January 3, 2017 EPM final rule, the total               measures can be updated. For example,                 event occurs during a performance year,


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                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                          39321

                                                   CMS updates the quality-adjusted                        participant hospital for episodes that                incurred to furnish these services are
                                                   episode target prices for the new or                    initiate before the effective date of the             marginal or are paid for through other
                                                   surviving participant hospital                          reorganization event. Episodes that                   MPFS services. However, since the
                                                   (§ 510.300(b)(4)). Following the end of a               initiate after such reorganization event              publication of the CJR model final rule,
                                                   performance year, CMS performs annual                   would be subject to an updated quality-               stakeholders have expressed concern
                                                   reconciliation calculations in                          adjusted episode target price that is                 that the zero value assigned to the PE
                                                   accordance with the provisions                          based on historical episodes for the CJR              RVUs for these codes results in
                                                   established in § 510.305. The annual                    participant hospital which would                      inaccurate pricing. Stakeholders assert
                                                   reconciliation calculations are specific                include historical episode expenditures               that there are additional costs related to
                                                   to the episodes attributable to each                    for all hospitals that are integrated                 the delivery of telehealth services under
                                                   participant hospital entity for that                    under the surviving CCN. These policies               the CJR model such as maintaining the
                                                   performance year. The applicable                        have been in effect since the start of the            telecommunications equipment,
                                                   quality-adjusted episode target price for               CJR model on April 1, 2016. To further                software and security and that, while
                                                   such episodes is the quality-adjusted                   clarify this policy for the CJR model, we             these practice expense costs are not
                                                   episode target price that applies to the                propose to add a provision specifying                 equivalent to in-person service delivery
                                                   episode type as of the anchor                           that separate reconciliation calculations             costs, they are greater than zero. In
                                                   hospitalization admission date                          are performed for episodes that occur                 considering the pricing concerns voiced
                                                   (§ 510.300(a)(3)). For example, if during               before and after a reorganization that
                                                                                                                                                                 by stakeholders, we recognize that there
                                                   a performance year, two participant                     results in a hospital with a new CCN at
                                                                                                                                                                 are resource costs in practice expense
                                                   hospitals (Hospital A and Hospital B)                   § 510.305(d)(1). We believe this
                                                                                                                                                                 for telehealth services furnished
                                                   merge under the CCN of one of those                     clarification would increase
                                                                                                                                                                 remotely, however, we do not believe
                                                   two participant hospital’s CCN (Hospital                transparency and understanding of the
                                                                                                                                                                 the current PE methodology and data
                                                   B’s CCN), (assuming no other                            payment reconciliation processes for the
                                                   considerations apply) three initial (and                                                                      accurately account for these costs
                                                                                                           CJR model. We seek comment on this
                                                   three subsequent) annual reconciliation                                                                       relative to the PE resource costs for
                                                                                                           proposal.
                                                   calculations for that performance year                                                                        other services. This belief previously led
                                                   are performed: An initial (and                          E. Proposed Adjustment to the Pricing                 us to assign zero PE RVUs in valuing
                                                   subsequent) reconciliation for Hospital                 Calculation for the CJR Telehealth                    these services, but because we recognize
                                                   A for the episodes where the anchor                     HCPCS Codes To Include the Facility PE                that there are some costs that are not
                                                   hospitalization admission occurred                      Values                                                being accounted for by the current
                                                   prior to the merger (as determined by                     In the CJR model final rule (80 FR                  pricing for these CJR model codes, we
                                                   the CCN on the IPPS claim), using                       73450), we established 9 HCPCS G-                     believe an alternative to assigning zero
                                                   Hospital A’s episode target price for that              codes to report home telehealth                       PE RVUs would be to use the facility PE
                                                   time period; an initial (and subsequent)                evaluation and management (E/M) visits                RVUs for the analogous in-person
                                                   reconciliation for Hospital B for the                   furnished under the CJR telehealth                    services. While we acknowledge that
                                                   episodes where anchor hospitalization                   waiver as displayed in Table 5. These                 assigning the facility PE RVUs would
                                                   admission occurred before the merger                    codes have been payable for CJR model                 not provide a perfect reflection of
                                                   (as determined by the CCN on the IPPS                   beneficiaries since the CJR model began               practice resource costs for remote
                                                   claim), using Hospital B’s episode target               on April 1, 2016. Pricing for these 9                 telehealth services under the CJR model,
                                                   price for that time period; and an initial              codes is updated each calendar year to                in the absence of more specific
                                                   (and subsequent) reconciliation for the                 reflect the work and malpractice (MP)                 information, we believe it is likely a
                                                   post-merger entity (merged Hospitals A                  relative value units (RVUs) for the                   better proxy for such PE costs than zero.
                                                   and B) for the episodes where anchor                    comparable office and other outpatient                Therefore, we are proposing to use the
                                                   hospitalization admission occurred on                   E/M visit codes on the Medicare                       facility PE RVUs for the analogous
                                                   or after the merger’s effective date, using             Physician Fee Schedule (MPFS). As we                  services in pricing the 9 CJR HCPCS G
                                                   the episode target price that time period.              stated in the CJR model final rule (80 FR             codes shown in Table 5. Additionally,
                                                   Reorganization events that involve a CJR                73450), in finalizing this pricing method             we are proposing to revise
                                                   model participant hospital and a                        for these codes, we did not include the               § 510.605(c)(2) to reflect the addition of
                                                   hospital that is not participating in the               practice expense (PE) RVUs of the                     the RVUs for comparable codes for the
                                                   CJR model and result in the new                         comparable office and other outpatient                facility PE to the work and MP RVUs we
                                                   organization operating under the CJR                    E/M visit codes in the payment rate for               are currently using for the basis for
                                                   participant hospital’s CCN, would not                   these unique CJR model services, based                payment of the CJR telehealth waiver G
                                                   affect the reconciliation for the CJR                   on the belief that practice expenses                  codes.
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                                                   39322                   Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                    TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF RESIDENCE
                                                                                                                                                                                    Work and MP RVUs equal to
                                                                                                                                                                                     those of the corresponding
                                                                                                                                                                                      office/outpatient E/M visit
                                                       HCPCS                                     Long descriptor                                        Short descriptor            CPT code for same calendar
                                                      Code No.                                                                                                                         year under the PFS; PE
                                                                                                                                                                                      RVUs equal to the facility
                                                                                                                                                                                            values for each

                                                   G9481 .............   Remote in-home visit for the evaluation and management               Remote E/M new pt 10 mins ......                             99201
                                                                           of a new patient for use only in the Medicare-approved
                                                                           Comprehensive Care for Joint Replacement model,
                                                                           which requires these 3 key components:
                                                                              • A problem focused history.
                                                                              • A problem focused examination.
                                                                              • Straightforward medical decision making, furnished
                                                                                 in real time using interactive audio and video tech-
                                                                                 nology.
                                                                         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 needs of the patient or the family or both. Usu-
                                                                           ally, the presenting problem(s) are self limited or minor.
                                                                           Typically, 10 minutes are spent with the patient or family
                                                                           or both via real time, audio and video intercommunica-
                                                                           tions technology.
                                                   G9482 .............   Remote in-home visit for the evaluation and management               Remote E/M new pt 20 mins ......                             99202
                                                                           of a new patient for use only in the Medicare-approved
                                                                           Comprehensive Care for Joint Replacement model,
                                                                           which requires these 3 key components:
                                                                              • An expanded problem focused history.
                                                                              • An expanded problem focused examination.
                                                                              • Straightforward medical decision making, furnished
                                                                                 in real time using interactive audio and video tech-
                                                                                 nology. Counseling and coordination of care with
                                                                                 other physicians, other qualified health care profes-
                                                                                 sionals or agencies are provided consistent with the
                                                                                 nature of the problem(s) and the needs of the pa-
                                                                                 tient or the family or both. Usually, the presenting
                                                                                 problem(s) are of low to moderate severity. Typi-
                                                                                 cally, 20 minutes are spent with the patient or family
                                                                                 or both via real time, audio and video intercommuni-
                                                                                 cations technology.
                                                   G9483 .............   Remote in-home visit for the evaluation and management               Remote E/M new pt 30 mins ......                             99203
                                                                           of a new patient for use only in the Medicare-approved
                                                                           Comprehensive Care for Joint Replacement model,
                                                                           which requires these 3 key components:
                                                                              • A detailed history.
                                                                              • A detailed examination.
                                                                              • Medical decision making of low complexity, fur-
                                                                                 nished in real time using interactive audio and video
                                                                                 technology. 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 needs of
                                                                                 the patient or the family or both. Usually, the pre-
                                                                                 senting problem(s) are of moderate severity. Typi-
                                                                                 cally, 30 minutes are spent with the patient or family
                                                                                 or both via real time, audio and video intercommuni-
                                                                                 cations technology.
                                                   G9484 .............   Remote in-home visit for the evaluation and management               Remote E/M new pt 45 mins ......                             99204
                                                                           of a new patient for use only in the Medicare-approved
                                                                           Comprehensive Care for Joint Replacement model,
                                                                           which requires these 3 key components:
                                                                              • A comprehensive history.
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                                                                              • A comprehensive examination.




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                                                                          Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                              39323

                                                            TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF
                                                                                            RESIDENCE—Continued
                                                                                                                                                                                    Work and MP RVUs equal to
                                                                                                                                                                                     those of the corresponding
                                                                                                                                                                                      office/outpatient E/M visit
                                                       HCPCS                                     Long descriptor                                        Short descriptor            CPT code for same calendar
                                                      Code No.                                                                                                                         year under the PFS; PE
                                                                                                                                                                                      RVUs equal to the facility
                                                                                                                                                                                            values for each

                                                                            • Medical decision making of moderate complexity,
                                                                              furnished in real time using interactive audio and
                                                                              video technology. Counseling and coordination of
                                                                              care with other physicians, other qualified health
                                                                              care professionals or agencies are provided con-
                                                                              sistent with the nature of the problem(s) and the
                                                                              needs of the patient or the family or both. Usually,
                                                                              the presenting problem(s) are of moderate to high
                                                                              severity. Typically, 45 minutes are spent with the
                                                                              patient or family or both via real time, audio and
                                                                              video intercommunications technology.
                                                   G9485 .............   Remote in-home visit for the evaluation and management               Remote E/M new pt 60 mins ......                             99205
                                                                          of a new patient for use only in the Medicare-approved
                                                                          Comprehensive Care for Joint Replacement model,
                                                                          which requires these 3 key components:
                                                                            • A comprehensive history.
                                                                            • A comprehensive examination.
                                                                            • Medical decision making of high complexity, fur-
                                                                              nished in real time using interactive audio and video
                                                                              technology. 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 needs of
                                                                              the patient or the family or both. Usually, the pre-
                                                                              senting problem(s) are of moderate to high severity.
                                                                              Typically, 60 minutes are spent with the patient or
                                                                              family or both via real time, audio and video inter-
                                                                              communications technology.
                                                   G9486 .............   Remote in-home visit for the evaluation and management               Remote E/M est. pt 10 mins .......                           99212
                                                                          of an established patient for use only in the Medicare-
                                                                          approved Comprehensive Care for Joint Replacement
                                                                          model, which requires at least 2 of the following 3 key
                                                                          components:
                                                                            • A problem focused history.
                                                                            • A problem focused examination.
                                                                            • Straightforward medical decision making, furnished
                                                                              in real time using interactive audio and video tech-
                                                                              nology. Counseling and coordination of care with
                                                                              other physicians, other qualified health care profes-
                                                                              sionals or agencies are provided consistent with the
                                                                              nature of the problem(s) and the needs of the pa-
                                                                              tient or the family or both. Usually, the presenting
                                                                              problem(s) are self limited or minor. Typically, 10
                                                                              minutes are spent with the patient or family or both
                                                                              via real time, audio and video intercommunications
                                                                              technology.
                                                   G9487 .............   Remote in-home visit for the evaluation and management               Remote E/M est. pt 15 mins .......                           99213
                                                                          of an established patient for use only in the Medicare-
                                                                          approved Comprehensive Care for Joint Replacement
                                                                          model, 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, fur-
                                                                              nished in real time using interactive audio and video
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                                                                              technology. 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 needs of
                                                                              the patient or the family or both. Usually, the pre-
                                                                              senting 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 inter-
                                                                              communications technology.



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                                                   39324                  Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                            TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF
                                                                                            RESIDENCE—Continued
                                                                                                                                                                                    Work and MP RVUs equal to
                                                                                                                                                                                     those of the corresponding
                                                                                                                                                                                      office/outpatient E/M visit
                                                       HCPCS                                     Long descriptor                                        Short descriptor            CPT code for same calendar
                                                      Code No.                                                                                                                         year under the PFS; PE
                                                                                                                                                                                      RVUs equal to the facility
                                                                                                                                                                                            values for each

                                                   G9488 .............   Remote in-home visit for the evaluation and management               Remote E/M est. pt 25 mins .......                           99214
                                                                          of an established patient for use only in the Medicare-
                                                                          approved Comprehensive Care for Joint Replacement
                                                                          model, which requires at least 2 of the following 3 key
                                                                          components:
                                                                            • A detailed history.
                                                                            • A detailed examination.
                                                                            • Medical decision making of moderate complexity,
                                                                              furnished in real time using interactive audio and
                                                                              video technology. Counseling and coordination of
                                                                              care with other physicians, other qualified health
                                                                              care professionals or agencies are provided con-
                                                                              sistent with the nature of the problem(s) and the
                                                                              needs of the patient or the family or both. Usually,
                                                                              the presenting problem(s) are of moderate to high
                                                                              severity. Typically, 25 minutes are spent with the
                                                                              patient or family or both via real time, audio and
                                                                              video intercommunications technology.
                                                   G9489 .............   Remote in-home visit for the evaluation and management               Remote E/M est. pt 40 mins .......                           99215
                                                                          of an established patient for use only in the Medicare-
                                                                          approved Comprehensive Care for Joint Replacement
                                                                          model, which requires at least 2 of the following 3 key
                                                                          components:
                                                                            • A comprehensive history.
                                                                            • A comprehensive examination.
                                                                            • Medical decision making of high complexity, fur-
                                                                              nished in real time using interactive audio and video
                                                                              technology. 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 needs of
                                                                              the patient or the family or both. Usually, the pre-
                                                                              senting problem(s) are of moderate to high severity.
                                                                              Typically, 40 minutes are spent with the patient or
                                                                              family or both via real time, audio and video inter-
                                                                              communications technology.



                                                   F. Clinician Engagement Lists                            use this list to identify the eligible                The clinician financial arrangements list
                                                                                                            clinicians who will be assessed as                    (§ 510.120(b)) will be used by CMS to
                                                   1. Background for Submission of
                                                                                                            Qualifying APM Participants (QPs) for                 identify eligible clinicians for whom we
                                                   Clinician Engagement Lists
                                                                                                            the year. CMS will make QP                            would make a QP determination based
                                                      Under the Quality Payment Program,                    determinations individually for these                 on services furnished through the
                                                   the Advanced APM track of the CJR                        eligible clinicians as specified in                   Advanced APM track of the CJR model.
                                                   model does not include eligible                          §§ 414.1425(b)(2), (c)(4), and 414.1435.                 Stakeholders have expressed a desire
                                                   clinicians on a Participation List; rather                  In the EPM final rule, we stated that              for model changes that would also
                                                   the CJR Advanced APM track currently                     a list of physicians, nonphysician                    include in the clinician financial
                                                   includes eligible clinicians on an                       practitioners, or therapists in a sharing             arrangement list physicians, non-
                                                   Affiliated Practitioner List as defined                  arrangement, distribution arrangement,                physician practitioners, and therapists
                                                   under § 414.1305 and described under                     or downstream distribution                            without a financial arrangement under
                                                   § 414.1425(a)(2) of the agency’s Quality                 arrangement, as applicable, would be                  the CJR model, but who are affiliated
                                                   Payment Program regulations. As such,                    considered an Affiliated Practitioner                 with and support the Advanced APM
                                                   the Affiliated Practitioner List for the                 List of eligible clinicians who are                   Entity in its participation in the
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                                                   CJR model is the ‘‘CMS-maintained list’’                 affiliated with and support the                       Advanced APM for purposes of the
                                                   of eligible clinicians that have ‘‘a                     Advanced APM Entity in its                            Quality Payment Program.
                                                   contractual relationship with the                        participation in the Advanced APM for                    We agree with stakeholders that these
                                                   Advanced APM Entity [for CJR, the                        purposes of the Quality Payment                       physicians, non-physician practitioners,
                                                   participant hospital] for the purposes of                Program. An in-depth discussion of how                and therapists should have their
                                                   supporting the Advanced APM Entity’s                     the clinician financial arrangement list              contributions to the Advanced APM
                                                   quality or cost goals under the                          is considered an Affiliated Practitioner              Entity’s participation in the Advanced
                                                   Advanced APM.’’ As specified in our                      List can be found in section V.O. of the              APM recognized under the Quality
                                                   regulations at § 414.1425(a)(2), CMS will                EPM final rule (82 FR 558 through 563).               Payment Program; however, since these


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                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                          39325

                                                   individuals do not have financial                       which eligible clinicians are not                     CJR collaborator during the period of the
                                                   arrangements with the participant                       identified on a Participation List, but are           CJR model performance year specified
                                                   hospital, to also include them on the                   identified on an Affiliated Practitioner              by CMS but who does have a
                                                   clinician financial arrangement list                    List. CMS makes the QP determination                  contractual relationship with a
                                                   would be misleading, and could create                   based on Part B claims data, so                       participant hospital based at least in
                                                   confusion when CJR model participant                    clinicians need not track or report                   part on supporting the participant
                                                   hospitals submit lists to CMS.                          payment amount or patient count                       hospital’s quality or cost goals under the
                                                                                                           information to CMS.                                   CJR model during the period of the CJR
                                                   2. Proposed Clinician Engagement List                      This proposal would broaden the
                                                   Requirements                                                                                                  model performance year specified by
                                                                                                           scope of eligible clinicians that are                 CMS:
                                                      To increase opportunities for eligible               considered Affiliated Practitioners                      ++ The name, TIN, and NPI of the
                                                   clinicians supporting CJR model                         under the CJR model to include those                  individual.
                                                   participant hospitals by performing CJR                 without a financial arrangement under
                                                   model activities and who are affiliated                 the CJR model but who are either                         ++ The start date and, if applicable,
                                                   with participant hospitals to be                        directly employed by or contractually                 the end date for the contractual
                                                   considered QPs, we are proposing that                   engaged with a participant hospital to                relationship between the individual and
                                                   each physician, nonphysician                            perform clinical work for the participant             participant hospital.
                                                   practitioner, or therapist who is not a                 hospital when that clinical work, at                     Further, we propose that if there are
                                                   CJR collaborator during the period of the               least in part, supports the cost and                  no individuals that meet the
                                                   CJR model performance year specified                    quality goals of the CJR model. We                    requirements to be reported, as specified
                                                   by CMS, but who does have a                             propose that the cost and quality goals               in any of § 510.120 (b)(1) through (3) of
                                                   contractual relationship with the                       of the additional affiliated practitioners            the EPM final rule or § 510.120(c) as
                                                   participant hospital based at least in                  who are identified on a clinician                     proposed here, the participant hospital
                                                   part on supporting the participant                      engagement list because they are                      must attest in a form and manner
                                                   hospital’s quality or cost goals under the              contracted with a participant hospital                required by CMS that there are no
                                                   CJR model during the period of the                      must include activities related to CJR                individuals to report.
                                                   performance year specified by CMS,                      model activities, that is, activities                    Given that this proposal would
                                                   would be added to a clinician                           related to promoting accountability for               require submission of a clinician
                                                   engagement list.                                        the quality, cost, and overall care for               engagement list, or an attestation that
                                                      In addition to the clinician financial               beneficiaries during LEJR episodes                    there are no eligible clinicians to be
                                                   arrangement list that is considered an                  included in the CJR model, including                  included on such a list, to reduce
                                                   Affiliated Practitioner List for purposes               managing and coordinating care;                       burden on participant hospitals, we
                                                   of the Quality Payment Program, we                      encouraging investment in                             would collect information for the
                                                   propose the clinician engagement list                   infrastructure, enabling technologies,                clinician engagement list and clinician
                                                   would also be considered an Affiliated                  and redesigned care processes for high                financial arrangement list at the same
                                                   Practitioner List. The clinician                        quality and efficient service delivery;               time.
                                                   engagement list and the clinician                       the provision of items and services
                                                   financial arrangement list would be                                                                              We seek comments on the proposal
                                                                                                           during a CJR episode in a manner that                 for submission of this information. We
                                                   considered together an Affiliated                       reduces costs and improves quality; or
                                                   Practitioner List and would be used by                                                                        are especially interested in comments
                                                                                                           carrying out any other obligation or duty
                                                   CMS to identify eligible clinicians for                                                                       about approaches to information
                                                                                                           under the CJR model.
                                                   whom we would make a QP                                                                                       submission, including the periodicity
                                                                                                              Like the requirements of the clinician
                                                   determination based on services                         financial arrangement lists specified at              and method of submission to CMS that
                                                   furnished through the Advanced APM                      § 510.120(b), for CMS to make QP                      would minimize the reporting burden
                                                   track of the CJR model. As specified in                 determinations for eligible clinicians                on participant hospitals while providing
                                                   § 414.1425, as of our regulations,                      based on services furnished through the               CMS with sufficient information about
                                                   adopted in the Calendar Year (CY) 2017                  CJR Advanced APM track, we would                      eligible clinicians to facilitate QP
                                                   Quality Payment Program final rule (81                  require that accurate information about               determinations.
                                                   FR 77551) (hereinafter referred to as the               each physician, nonphysician                             For each participant hospital in the
                                                   2017 QPP final rule), those physicians,                 practitioner, or therapist who is not a               CJR Advanced APM track, we propose
                                                   nonphysician practitioners, or therapists               CJR collaborator during the period of the             that the participant hospital must
                                                   who are included on the CJR model                       CJR model performance year specified                  maintain copies of its clinician
                                                   Affiliated Practitioner List as of March                by CMS, but who is included on a                      engagement lists and supporting
                                                   31, June 30, or August 31 of a QP                       clinician engagement list, be provided                documentation (that is, copies of
                                                   performance period would be assessed                    to CMS in a form and manner specified                 employment letters or contracts) of its
                                                   to determine their QP status for the year.              by CMS on a no more than quarterly                    clinical engagement lists submitted to
                                                   As discussed in the 2017 QPP final rule                 basis. Thus, we propose that each                     CMS. Because we would use these lists
                                                   (81 FR 77439 and 77440), for clinicians                 participant hospital in the Advanced                  to develop Affiliated Practitioner Lists
                                                   on an Affiliated Practitioner List, we                  APM track of the CJR model submit to                  used for purposes of making QP
                                                   determine whether clinicians meet the                   CMS a clinician engagement list in a                  determinations, these documents would
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                                                   payment amount or patient count                         form and manner specified by CMS on                   be necessary to assess the completeness
                                                   thresholds to be considered QPs (or                     a no more than quarterly basis. We                    and accuracy of materials submitted by
                                                   Partial QPs) for a year by evaluating                   propose this list must include the                    a participant hospital and to facilitate
                                                   whether individual clinicians on an                     following information on eligible                     monitoring and audits. For the same
                                                   Affiliated Practitioner List have                       clinicians for the period of the CJR                  reason, we further propose that the
                                                   sufficient payments or patients flowing                 model performance year specified by                   participant hospital must retain and
                                                   through the Advanced APM; we do not                     CMS:                                                  provide access to the required
                                                   make any determination at the APM                          • For each physician, nonphysician                 documentation in accordance with
                                                   Entity level for Advanced APMs in                       practitioner, or therapist who is not a               § 510.110.


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                                                   39326                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   G. Clarification of Use of Amended                      reconciliation (due to the additional 12              performance year 1 score, using
                                                   Composite Quality Score Methodology                     months of time that will occur between                different methodologies across
                                                   During CJR Model Performance Year 1                     the initial and subsequent reconciliation             performance years would require a
                                                   Subsequent Reconciliation                               calculations), more accurate                          mechanism to account for differences in
                                                      We conducted the initial                             identification of model overlap and                   the quality score methodology, for
                                                   reconciliation for performance year 1 of                exclusion of episodes, as well as                     example we would have to develop a
                                                   the CJR model in early 2017, and expect                 factoring in adjustments to account for               reliable crosswalk approach. If we were
                                                   to make reconciliation payments to CJR                  shared savings payments, and post-                    to develop and use a crosswalk
                                                   participant hospitals by the end of                     episode spending, as specified in                     approach, participants and other
                                                   September 2017 to accommodate the                       § 510.305(i). Specifically, the                       stakeholders would need to be informed
                                                   performance year 1 appeals process                      methodology used to determine the                     about the crosswalk methodology in
                                                   timelines. We will conduct the                          quality-adjusted target price for the                 order to validate data analyses across
                                                   subsequent reconciliation calculation                   performance year 1 subsequent                         performance years and that usage of the
                                                   for performance year 1 of the CJR model                 reconciliation calculation will differ                crosswalk would be ongoing throughout
                                                   beginning in the first quarter of 2018,                 from the methodology used to                          the model’s duration for consistency
                                                   which may result in additional amounts                  determine the quality-adjusted target                 across performance years. This
                                                                                                           price for the performance year 1 initial              methodology could add substantial
                                                   to be paid to participant hospitals or a
                                                                                                           reconciliation calculation as follows:                complexity to this time-limited model.
                                                   reduction to the amount that was paid
                                                                                                           The quality-adjusted target price would               We also considered that the composite
                                                   for performance year 1. However, the
                                                                                                           be recalculated to apply the amended                  quality score for some participant
                                                   results of the performance year 1
                                                                                                           reductions to the effective discount                  hospitals may be higher under the
                                                   subsequent reconciliation calculations
                                                                                                           factors (§ 510.315(f)), which would be                revised scoring methodology. Delaying
                                                   will be combined with the performance
                                                                                                           determined after recalculating the                    use of the revised scoring methodology
                                                   year 2 initial reconciliation results
                                                                                                           composite quality scores, including                   may disadvantage these participants if
                                                   before reconciliation payment or
                                                                                                           applying more generous criteria for                   their composite quality score would be
                                                   repayment amounts are processed for
                                                                                                           earning quality improvement points                    higher and result in a more favorable
                                                   payment or collection. Changes to the                                                                         discount percentage or allow the
                                                   CJR model established in the EPM final                  (that is, a 2 decile improvement rather
                                                                                                           than 3 decile improvement as specified                hospital to qualify for a reconciliation
                                                   rule impact this process.                                                                                     payment. Therefore, we believe the best
                                                      The improvements to the CJR model                    in amended § 510.315(d)). Using the
                                                                                                           recalculated quality-adjusted target                  approach is to apply the quality
                                                   quality measures and composite quality
                                                                                                           price, the net payment reconciliation                 specifications as established in the EPM
                                                   score methodology, which were
                                                                                                           amount (NPRA) would be recalculated                   final rule (that is, the amendments to
                                                   finalized in the EPM final rule (82 FR
                                                                                                           and will include application of post-                 §§ 510.305 and 510.315 that became
                                                   524 through 526), were intended to be
                                                                                                           episode spending reductions                           effective May 20, 2017) to performance
                                                   effective before the CJR model’s                                                                              year 1 subsequent reconciliation
                                                   performance year 1 initial                              (§ 510.305(j)), as necessary, after
                                                                                                           determining the limitations on loss or                calculations to ensure that
                                                   reconciliation. However, as noted in                                                                          reconciliation calculations for
                                                   section II. of this proposed rule, the                  gain. Thus, calculating performance
                                                                                                           year 1 reconciliation payments using                  subsequent performance years will be
                                                   effective date for certain EPM final rule                                                                     calculated using the same methodology
                                                   provisions, including those amending                    these two different provisions may
                                                                                                           result in a range of upward or                        and to improve consistency across
                                                   §§ 510.305 and 510.315 to improve the                                                                         performance years for quality
                                                   quality measures and composite quality                  downward adjustments to participant
                                                                                                           hospitals’ performance year 1 payment                 improvement measurement. Thus, for
                                                   score methodology, were delayed until                                                                         the reasons noted previously, we are not
                                                   May 20, 2017. As a result, the CJR                      amounts. We note that a downward
                                                                                                           adjustment to the performance year 1                  proposing to change the amendments to
                                                   reconciliation reports issued in April                                                                        §§ 510.305 and 510.315 that became
                                                   2017 were created in accordance with                    payment amounts would require
                                                                                                                                                                 effective May 20, 2017. We seek
                                                   the provisions of §§ 510.305 and                        payment recoupment, if offset against a
                                                                                                                                                                 comment on whether using an
                                                   510.315 in effect as of April 2017; that                performance year 2 initial reconciliation
                                                                                                                                                                 alternative approach, such as the quality
                                                   is, the provisions finalized in the CJR                 payment amount is not feasible, which
                                                                                                                                                                 composite score methodology from the
                                                   model final rule. In early 2018, we                     may be burdensome for participant
                                                                                                                                                                 CJR model final rule for the performance
                                                   would perform the performance year 1                    hospitals.
                                                                                                                                                                 year 1 subsequent reconciliation, would
                                                   subsequent reconciliation calculation in                   In developing this proposed rule, we               ensure better consistency for analyses
                                                   accordance with the provisions                          also considered whether there might be                across CJR performance years.
                                                   §§ 510.305 and 510.315 in effect as of                  benefit in further delaying the
                                                   early 2018, that is, established in the                 amendments to §§ 510.305 and 510.315                  H. Clarifying and Technical Changes
                                                   EPM final rule. Applying the provisions                 such that the same calculations would                 Regarding the Use of the CMS Price
                                                   established in the EPM final rule to the                be used for both the performance year                 (Payment) Standardization Detailed
                                                   performance year 1 subsequent                           1 initial reconciliation and the                      Methodology
                                                   reconciliation calculation may result in                subsequent performance year 1                           Based on questions we received from
                                                   significant differences between the                     reconciliation, and the use of the                    participant hospitals during the
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                                                   reconciliation payments calculated                      amended calculations would begin with                 performance year 1 reconciliation
                                                   during the performance year 1 initial                   the performance year 2 initial                        process, we are proposing to make two
                                                   reconciliation and the performance year                 reconciliation. We believe such an                    technical changes to the CJR model
                                                   1 subsequent reconciliation. We                         approach would impact future CJR                      regulations to clarify the use of the CMS
                                                   anticipate that these differences will be               model implementation and evaluation                   Price (Payment) Standardization
                                                   greater than those that would be                        activities. Because determining the                   Detailed Methodology, posted on the
                                                   expected as a result of using more                      performance year 2 composite quality                  QualityNet Web site at http://
                                                   complete claims and programmatic data                   score considers the hospital’s quality                www.qualitynet.org/dcs/Content
                                                   that will be available for the subsequent               score improvement from its                            Server?c=Page&pagename=Qnet


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                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                          39327

                                                   Public%2FPage%2FQnetTier4&cid=                          (March 22, 1995; Pub. L. 104–4),                      offers CMS maximum flexibility to
                                                   1228772057350, in the calculation of                    Executive Order 13132 on Federalism                   design alternative episode-based models
                                                   target prices and actual episode                        (August 4, 1999) and the Congressional                and make potential improvements to
                                                   spending. This pricing standardization                  Review Act (5 U.S.C. 804(2)), and                     these models as suggested by
                                                   approach is the same as that used for the               Executive Order 13771 on Reducing                     stakeholders, while still allowing us to
                                                   Hospital Value-Based Purchasing                         Regulation and Controlling Regulatory                 test and evaluate the impact of the CJR
                                                   Program’s (HVBP) Medicare spending                      Costs (January 30, 2017).                             model on the quality of care and
                                                   per beneficiary metric. In section                         Executive Orders 12866 and 13563                   expenditures.
                                                   III.C.3.a. of the CJR model final rule (80              direct agencies to assess all costs and                  This proposed rule is also necessary
                                                   FR 73331 through 73333), we finalized                   benefits of available regulatory                      to propose improvements to the CJR
                                                   how we would operationalize the                         alternatives and, if regulation is                    model for performance years 3, 4, and
                                                   exclusion of the various special                        necessary, to select regulatory                       5. We are proposing a few technical
                                                   payment provisions in calculating CJR                   approaches that maximize net benefits                 refinements and clarifications for
                                                   model episode expenditures, both                        (including potential economic,                        certain payment, reconciliation and
                                                   historical episode spending and                         environmental, public health and safety               quality provisions, and a change to the
                                                   performance year episode spending, by                   effects, distributive impacts, and                    criteria for the Affiliated Practitioner
                                                   relying upon the CMS Price (Payment)                    equity). A regulatory impact analysis                 List to broaden the CJR Advanced APM
                                                   Standardization Detailed Methodology                    (RIA) must be prepared for major rules                track to additional eligible clinicians.
                                                   with modifications. However, we did                     with economically significant effects                 We believe these proposed refinements
                                                   not clearly articulate this finalized                   ($100 million or more in any 1 year).                 would address operational issues
                                                   policy in the regulations at 42 CFR part                This proposed rule proposes to cancel                 identified since the start of the CJR
                                                   510. Thus, we are proposing the                         the EPMs and the CR incentive payment                 model.
                                                   following technical changes to bring the                model in advance of their start date and
                                                                                                                                                                 C. Anticipated Effects
                                                   regulatory text into conformity with our                proposes several revisions to the design
                                                                                                           of the CJR model; these proposals                        In section III. of the preamble to this
                                                   intended policy and to reduce potential
                                                                                                           impact a subset of hospitals under the                proposed rule, we discuss our proposals
                                                   stakeholder uncertainty about how the
                                                                                                           IPPS. Therefore, it would have a                      to amend the regulations governing the
                                                   price (payment) standardization
                                                                                                           relatively small economic impact; as a                CJR model. We present the following
                                                   methodology is used. We are proposing
                                                                                                           result, this proposed rule does not reach             estimated overall impact of these
                                                   to insert ‘‘standardized’’ into the
                                                                                                           the $100 million threshold and thus is                proposed changes to the CJR model.
                                                   definition of actual episode payment in
                                                                                                           neither an ‘‘economically significant’’               Table 6 summarizes the newly
                                                   § 510.2, and insert ‘‘with certain                                                                            calculated estimated impact for the CJR
                                                   modifications’’ into § 510.300(b)(6) to                 rule under E.O. 12866, nor a ‘‘major
                                                                                                           rule’’ under the Congressional Review                 model for the last 3 years of the model.
                                                   account for the modifications we must                                                                            The modeling methodology for
                                                   make to the standardization                             Act.
                                                                                                                                                                 provider performance and participation
                                                   methodology to ensure all pricing                       B. Statement of Need                                  is consistent with the methodology used
                                                   calculations are consistent with our                       As discussed previously, review and                in modeling the CJR impacts in the EPM
                                                   finalized policies.                                     reevaluation of policies and programs,                final rule (82 FR 596). However, we
                                                   IV. Collection of Information                           as well as revised rulemaking, are                    updated our analysis to include an opt-
                                                   Requirements                                            within an agency’s discretion, especially             in option for hospitals in 33 of the 67
                                                                                                           after a change in administration occurs.              MSAs selected for participation in the
                                                     As stated in section 1115A(d)(3) of the                                                                     CJR model (all but 4 of these MSAs are
                                                                                                           After review and reevaluation of the CJR
                                                   Act, Chapter 35 of title 44, United States                                                                    from the lower cost groups), while
                                                                                                           model final rule, the EPM final rule and
                                                   Code, shall not apply to the testing and                                                                      maintaining mandatory participation for
                                                                                                           the public comments we received in
                                                   evaluation of models under section                                                                            the remaining 34 MSAs (all of which are
                                                                                                           response to the March 21, 2017 IFC, in
                                                   1115A of the Act. As a result, the                                                                            from the higher cost groups), and
                                                                                                           addition to other considerations, we
                                                   information collection requirements                     have determined that it is necessary to               allowing for the exclusion of low-
                                                   contained in this proposed rule need                    propose to rescind the regulations at 42              volume and rural hospitals in these 34
                                                   not be reviewed by the Office of                        CFR part 512 and to reduce the                        MSAs from mandatory participation and
                                                   Management and Budget. However, we                      geographic scope of the CJR model for                 allowing them to choose voluntary
                                                   have, summarized the anticipated cost                   the following reasons. First, we believe              participation (opt-in). We would expect
                                                   burden associated with the information                  that requiring hospitals to participate in            the number of mandatory participating
                                                   collection requirements in the                          additional episode models at this time                hospitals from year 3 forward to
                                                   Regulatory Impact Analysis section of                   is not in the best interest of the agency             decrease from approximately 700,
                                                   this proposed rule.                                     or affected providers. We are concerned               which is approximately the number of
                                                   V. Regulatory Impact Analysis                           that engaging in large mandatory                      current CJR participants, to
                                                                                                           episode payment model efforts at this                 approximately 393. We assumed that if
                                                   A. Introduction                                         time may impede our ability to pursue                 a hospital would exceed its target
                                                     We have examined the impacts of this                  and engage providers, such as hospitals,              pricing such that it would incur an
                                                   rule as required by Executive Order                     in future voluntary efforts. Similarly, we            obligation of repayment to CMS of 3
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                                                   12866 on Regulatory Planning and                        also believe that reducing the number of              percent or more in a given year, that
                                                   Review (September 30, 1993), Executive                  providers required to participate in the              hospital would not elect voluntary
                                                   Order 13563 on Improving Regulation                     CJR model would allow us to continue                  participation in the model for the final
                                                   and Regulatory Review (January 18,                      to evaluate the effects of such a model               three performance years. We assumed
                                                   2011), the Regulatory Flexibility Act                   while limiting the geographic reach of                no low-volume providers would
                                                   (RFA) (September 19, 1980, Pub. L. 96–                  our current mandatory models. Finally,                participate, noting that including them
                                                   354), section 1102(b) of the Social                     we believe that canceling the EPMs and                in impacts would not have any
                                                   Security Act, section 202 of the                        CR incentive payment model, as well as                noticeable effects due to their low
                                                   Unfunded Mandates Reform Act of 1995                    altering the scope of the CJR model,                  claims volume. For purposes of


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                                                   39328                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   identifying CJR rural hospitals for this                                  participation in performance years 1                           seek comment on our model
                                                   impact, we used the 2017 IPPS                                             and 2 of the CJR model would be                                assumptions that shifting of episodes
                                                   § 412.103 rural reclassification list. We                                 outweighed by the reconciliation                               will not occur. The new calculations
                                                   found only one provider in the 34                                         payment obligations they would expect                          estimate that the CJR model would
                                                   mandatory MSAs with an active rural                                       to incur if they continued to participate.                     result in a net Medicare program savings
                                                   reclassification and this provider was                                    The 60 to 80 participants we expect to                         of approximately $204 million over the
                                                   also on the low-volume hospital list and                                  continue participating in the model                            3 remaining performance years (2018
                                                   was not included in the impacts. The                                      through the voluntary election process                         through 2020). This represents a
                                                   likelihood of voluntary participation                                     are not included in our previous                               reduction in savings of approximately
                                                   linearly increases based on an upper                                      estimate of 393 CJR participants in the
                                                                                                                                                                                            $90 million from the estimated net
                                                   bound of 3 percent bonus, but the                                         mandatory MSAs. Thus, in total we
                                                                                                                                                                                            financial impacts of the CJR model in
                                                   modeling assumes that 25 percent of                                       expect approximately 450 to 470
                                                   hospitals in the voluntary MSAs would                                     participants in the CJR model for the                          the EPM final rule (82 FR 603).
                                                   not consider participation so that the                                    final three performance years. The                                Our previous analyses of the CJR
                                                   likelihood of participation for each                                      participation parameters were chosen to                        model did not explicitly model for
                                                   hospital is capped at 75 percent; we                                      reflect both the anticipated risk aversion                     utilization changes, such as
                                                   expect 60 to 80 hospitals to elect                                        of providers, and an expectation that                          improvements in the efficiency of
                                                   voluntary participation in the model.                                     many participants do not remain in an                          service during episodes. However, these
                                                      We seek comment on our assumptions                                     optional model or demonstration when                           behavioral changes would have minimal
                                                   about the number of hospitals that                                        there is an expectation that the hospital                      effect on the Medicare financial
                                                   would elect voluntary participation in                                    would incur an obligation of repayment                         impacts. If the actual costs for an
                                                   the CJR model. Due to a lack of available                                 to CMS. These assumptions reflect the                          episode are below the discounted
                                                   data, we did not account for participant                                  experience with other models and                               bundled payment amount, then CMS
                                                   investment in the impact analysis model                                   demonstrations. The value of 3 percent                         distributes the difference between these
                                                   we used for this proposed rule.                                           may be somewhat larger than the level                          two amounts to the participant hospital,
                                                   However, we would expect that those                                       of repayment at which providers would
                                                   who choose to voluntarily participate                                                                                                    up to a capped amount. Similarly, if
                                                                                                                             opt-in, but the value was chosen to
                                                   would have made investments in the                                        allow for the uncertainty of expected                          actual costs for an episode are above the
                                                   CJR model that enable them to perform                                     claims. We note that the possibility of                        discounted bundled payment amount,
                                                   well and that they would anticipate                                       shifting episodes from CJR model                               then the participant hospital pays CMS
                                                   earning positive reconciliation                                           participant hospitals to low-volume or                         the difference between these amounts,
                                                   payments. For those hospitals choosing                                    other non-participating hospitals exists                       up to a capped amount. Due to the
                                                   not to voluntarily participate, we would                                  and that we did not include any                                uncertainty of estimating the impacts of
                                                   expect that the cost of any investments                                   assumptions of this potential behavior                         this model, actual results could be
                                                   they may have made based on their                                         in our financial impact modeling. We                           higher or lower than this estimate.

                                                      TABLE 6—COMPARISON OF INITIAL ESTIMATE OF THE IMPACT ON THE MEDICARE PROGRAM OF THE CJR MODEL WITH
                                                                                                REVISED ESTIMATES
                                                                                                                  [Figures are in $ millions, negative values represent savings]

                                                                                                        Year                                                                   2018           2019            2020          Total

                                                   Initial CJR Estimate .........................................................................................                     ¥61            ¥109        ¥125           ¥294
                                                   Revised CJR Estimate .....................................................................................                         ¥38             ¥77         ¥88           ¥204
                                                   Change ............................................................................................................                 22              32          36             90
                                                     Note: The initial estimate includes the changes to the CJR model finalized in the EPM final rule (82 FR 603). The 2016 and 2017 initial esti-
                                                   mate is not impacted by the proposed changes to the CJR model in this proposed rule. The total column reflects 2018 through 2020. Totals do
                                                   not necessarily equal the sums of rounded components.


                                                      Our analysis presents the cost and                                     current baseline assumes these models                          improvements in care potentially made
                                                   transfer payment effects of this                                          would become effective on January 1,                           by some hospitals and warrant
                                                   proposed rule to the best of our ability.                                 2018, and that these models would                              cancellation of these models at this time
                                                                                                                             incentivize care improvements that                             while we engage with stakeholders to
                                                   D. Effects on Beneficiaries
                                                                                                                             would likely result in an increase in                          identify future tests for bundled
                                                      We believe that the proposal to cancel                                 quality of care for beneficiaries, it is                       payments and incentivizing high value
                                                   the EPMs and CR incentive payment                                         possible that the proposal to cancel                           care.
                                                   model would not affect beneficiaries’                                     these models could cause hospitals that                          We believe that the proposed changes
                                                   freedom of choice to obtain healthcare                                    potentially made improvements in care                          to the CJR model discussed in this
                                                   services from any individual or                                           in anticipation of the start of these                          proposed rule, specifically focusing the
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                                                   organization qualified to participate in                                  models to delay or cease these                                 model on higher cost MSAs in which
                                                   the Medicare program, including                                           investments, which could result in a                           participation would continue to be
                                                   providers that are making care                                            reversal of any recent quality                                 mandatory and allowing low-volume
                                                   improvements within their                                                 improvements. However, we believe the                          and rural hospitals and all participant
                                                   communities. Although these models                                        concerns raised by stakeholders and the                        hospitals in lower cost MSAs to choose
                                                   seek to incentivize care redesign and                                     lack of time to consider design                                voluntary participation, would maintain
                                                   collaboration throughout the inpatient                                    improvements for these models prior to                         the potential benefits of the CJR model
                                                   and post-acute care spectrum, the                                         the January 1, 2018 start date outweigh                        for beneficiaries in many areas while
                                                   models have not yet begun. As the                                         potential reversal of any recent                               providing a substantial number of


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                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                            39329

                                                   hospitals with increased flexibility to                 governmental jurisdictions. We estimate               participants submit on a no more than
                                                   better focus on priority needs of the                   that most hospitals and most other                    quarterly basis a list of physicians,
                                                   beneficiaries they serve. Specifically,                 providers and suppliers are small                     nonphysician practitioners, or therapists
                                                   low-volume and rural hospitals as well                  entities, either by virtue of their                   who are not a CJR model collaborator
                                                   as other hospitals in the 33 voluntary                  nonprofit status or by qualifying as                  during the period of the CJR model
                                                   participation MSAs (which are                           small businesses under the Small                      performance year specified by CMS but
                                                   relatively more efficient areas) could                  Business Administration’s size                        who do have a contractual relationship
                                                   elect to participate in the CJR model if                standards (revenues of less than $7.5 to              with a CJR model participant hospital
                                                   they believe that doing so best meets                   $38.5 million in any 1 year; NAIC                     based at least in part on supporting the
                                                   their organization’s strategic priorities               Sector—62 series). States and                         participant hospital’s quality or cost
                                                   for serving the beneficiaries in their                  individuals are not included in the                   goals under the CJR model during the
                                                   community. Alternatively, if these                      definition of a small entity. For details,            period of the performance year specified
                                                   hospitals do not believe continued                      see the Small Business Administration’s               by CMS.
                                                   participation in the CJR model would                    Web site at http://www.sba.gov/content/                  For hospitals eligible to opt-in to the
                                                   benefit their organizational goals and                  smallbusiness-size-standards.                         CJR model that elect to participate in the
                                                   local patient care priorities, they can                   For purposes of the RFA, we generally               model, CMS intends to provide a
                                                   elect not to opt-in for the remainder of                consider all hospitals and other                      template that can be completed and
                                                   the model. We believe that beneficiaries                providers and suppliers to be small                   submitted prior to the proposed January
                                                   in the service areas of the hospitals that              entities. We believe that the provisions              31, 2018 submission deadline. As stated
                                                   would be allowed to choose to                           of this proposed rule relating to acute               previously, we estimate that the number
                                                   participate in the CJR model under our                  care hospitals would have some effects                of hospitals that will elect voluntary
                                                   proposal may have an ongoing benefit                    on a substantial number of other                      participation in CJR is 60 to 80. As
                                                   from the care redesign investments                      providers involved in these episodes of               stated previously, this template would
                                                   these hospitals have already made                       care including surgeons and other                     be designed to minimize burden on
                                                   during the first 2 years of the CJR model.              physicians, skilled nursing facilities,               participants, particularly since all
                                                   Overall, we believe the refinements to                  physical therapists, and other providers.             necessary information required to
                                                   the CJR model proposed in this                          Although we acknowledge that many of                  effectively opt-in will be included
                                                   proposed rule do not materially alter the               the affected entities are small entities,             within the template. Using wage
                                                   potential effects of the model on                       and the analysis discussed throughout                 information from the Bureau of Labor
                                                   beneficiaries. However, we acknowledge                  this proposed rule discusses aspects of               Statistics for medical and health service
                                                   the possibility that the improved quality               episode payment models that may or                    managers (Code 11–9111), we assumed
                                                   of care that was likely to have occurred                would affect them, we have no reason                  a rate of $105.16 per hour, including
                                                   during performance years 1 and 2 of the                 to assume that these effects would reach              overhead and fringe benefits (https://
                                                   CJR model may be curtailed for                          the threshold level of 3 percent of                   www.bls.gov/oes/current/oes_nat.htm)
                                                   beneficiaries that receive care at                      revenues used by HHS to identify what                 and estimated that the time to complete
                                                   hospitals that do not elect to continue                 are likely to be ‘‘significant’’ impacts.             the opt-in template would be, on
                                                   participation in the CJR model.                         We assume that all or almost all of these             average, approximately 30 minutes per
                                                                                                           entities would continue to serve these                hospital. Thus, total costs associated
                                                   E. Effects on Small Rural Hospitals                     patients, and to receive payments                     with completing opt-in templates for all
                                                      The changes to the CJR model                         commensurate with their cost of care.                 60 to 80 hospitals projected to elect
                                                   proposed in this proposed rule do not                   Hospitals currently experience frequent               voluntary participation is expected to
                                                   substantially alter our previous impacts                changes to payment (for example, as                   range between $3,150 (60 hospitals) and
                                                   of the impact on small, geographically                  both hospital affiliations and preferred              $4,200 (80 hospitals).
                                                   rural hospitals specified in either the                 provider networks change) that may                       We seek comment on our assumptions
                                                   EPM final rule (82 FR 606) and the CJR                  impact revenue, and we have no reason                 and information on any costs associated
                                                   model final rule (80 FR 73538) because                  to assume that this would change                      with this work.
                                                   we continue to believe that few                         significantly under the changes                       H. Regulatory Review Costs
                                                   geographically rural hospitals will be                  proposed in this rule.
                                                   included in the CJR model. In addition,                   Accordingly, we have determined that                  If regulations impose administrative
                                                   the proposal to allow all rural hospitals               this proposed rule will not have a                    costs on private entities, such as the
                                                   (as defined in § 510.2) that are not                    significant impact on a substantial                   time needed to read and interpret this
                                                   otherwise excluded the opportunity to                   number of small entities. We solicit                  proposed rule, we should estimate the
                                                   elect to opt-in to the CJR model instead                public comments on our estimates and                  cost associated with regulatory review.
                                                   of having a mandatory participation                     analysis of the impact of our proposals               Due to the uncertainty involved with
                                                   requirement may further reduce the                      on those small entities.                              accurately quantifying the number of
                                                   likelihood that rural hospitals would be                                                                      entities that will review the rule, we
                                                   included in the model. We solicit public                G. Effects of Information Collection                  assume that the total number of unique
                                                   comment on our estimates and analysis                     The changes proposed in this                        commenters on the EPM proposed rule
                                                   of the impact of our proposals on small                 proposed rule would have a minimal                    will be the number of reviewers of this
                                                   rural hospitals.                                        additional burden of information                      proposed rule. We acknowledge that
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                                                                                                           collection for CJR model participant                  this assumption may understate or
                                                   F. Effects on Small Entities                            hospitals. The two areas which this                   overstate the costs of reviewing this
                                                     The RFA requires agencies to analyze                  proposed rule may increase participant                rule. It is possible that not all
                                                   options for regulatory relief of small                  burden include providing clinician                    commenters reviewed the precedent
                                                   entities, if a rule has a significant impact            engagement lists and submitting opt-in                rule in detail, and it is also possible that
                                                   on a substantial number of small                        documentation (for eligible hospitals                 some reviewers chose not to comment
                                                   entities. For purposes of the RFA, small                who choose to opt-in to the CJR model).               on the proposed rule. For these reasons
                                                   entities include small businesses,                        Clinician engagement list submission                we thought that the number of past
                                                   nonprofit organizations, and small                      for the CJR model would require that                  commenters on the EPM proposed rule


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                                                   39330                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                   would be a fair estimate of the number                  proposed rule, if finalized as proposed,              proposal would benefit a greater number
                                                   of reviewers of this rule. We welcome                   is not expected to be subject to the                  of beneficiaries because a greater
                                                   any comments on the approach in                         requirements of E.O. 13771 because it is              number of hospitals would be included
                                                   estimating the number of entities that                  estimated to result in no more than de                in the CJR model.
                                                   would review this proposed rule.                        minimis costs.                                           Instead of proposing to cancel the
                                                      We also recognize that different types                                                                     EPMs and CR incentive payment model,
                                                                                                           L. Alternatives Considered
                                                   of entities are in many cases affected by                                                                     we considered altering the design of
                                                   mutually exclusive sections of this                        Throughout this proposed rule, we                  these models to allow for voluntary
                                                   proposed rule, however for the purposes                 have identified our proposed policies                 participation but as this would
                                                   of our estimate we assume that each                     and alternatives that we have                         potentially involve restructuring the
                                                   reviewer reads approximately 100                        considered, and provided information                  model design, payment methodologies,
                                                   percent of the rule. We seek comments                   as to the effects of these alternatives and           financial arrangement provisions and/or
                                                   on this assumption.                                     the rationale for each of the proposed                quality measures, we did not believe
                                                      Using the wage information from the                  policies. We considered but did not                   that such alterations would offer
                                                   BLS for medical and health service                      propose to allow voluntary participation
                                                                                                                                                                 providers enough time to prepare for
                                                   managers (Code 11–9111), we estimate                    in all of the 67 selected MSAs in the CJR
                                                                                                                                                                 such changes, given the planned
                                                   that the cost of reviewing this rule is                 model because the overall estimated CJR
                                                                                                                                                                 January 1, 2018 start date. In addition,
                                                   $105.16 per hour, including overhead                    model impact would no longer show
                                                                                                                                                                 if at a later date we decide to offer these
                                                   and fringe benefits https://www.bls.gov/                savings, and would likely result in
                                                                                                                                                                 models, or similar models, on a
                                                   oes/current/oes_nat.htm. Assuming an                    costs. An entirely voluntary CJR model
                                                                                                                                                                 voluntary basis, we would not expect to
                                                   average reading speed, we estimate that                 would likely result in costs due to the
                                                                                                                                                                 implement them through rulemaking,
                                                   it would take approximately 1.6 hours                   assumption that, in aggregate, hospitals
                                                                                                                                                                 but rather would establish them
                                                   for the staff to review this proposed                   that expect to receive a positive
                                                                                                                                                                 consistent with the manner in which we
                                                   rule. For each entity that reviews the                  reconciliation payment from Medicare
                                                                                                           would elect to opt-in to the model while              have implemented other voluntary
                                                   rule, the estimated cost is $168.26 (1.6                                                                      models.
                                                   hours × $105.16). Therefore, we estimate                hospitals that expect to owe Medicare a
                                                                                                           reconciliation amount would not likely                   We solicit and welcome comments on
                                                   that the total cost of reviewing this                                                                         our proposals, on the alternatives we
                                                   regulation is $29,445 ($105.16 × 175                    elect to participate in the model. We
                                                                                                           also considered but did not propose                   have identified, and on other
                                                   reviewers).                                                                                                   alternatives that we should consider, as
                                                                                                           limiting participation to the proposed
                                                   I. Unfunded Mandates                                    34 mandatory participation MSAs and                   well as on the costs, benefits, or other
                                                      Section 202 of the Unfunded                          not allowing voluntary participation in               effects of these.
                                                   Mandates Reform Act of 1995 (UMRA)                      any of the 67 selected MSAs. If                       M. Accounting Statement and Table
                                                   also requires that agencies assess                      participation was limited to the
                                                   anticipated costs and benefits before                   proposed 34 mandatory participation                      As required by OMB Circular A–4
                                                   issuing any rule whose mandates                         MSAs and voluntary participation was                  under Executive Order 12866 (available
                                                   require spending in any 1 year of $100                  not allowed in any MSA, the impact to                 at http://www.whitehouse.gov/omb/
                                                   million in 1995 dollars, updated                        the overall estimated model savings                   circulars_a004_a-4) in Table 7, we have
                                                   annually for inflation. In 2017, that is                over the last three years of the model                prepared an accounting statement
                                                   approximately $148 million. This                        would be closer to $30 million than the               showing the classification of transfers
                                                   proposed rule does not include any                      $90 million estimate presented in                     associated with the provisions in this
                                                   mandate that would result in spending                   section V. of this proposed rule, because             proposed rule. The accounting
                                                   by state, local or tribal governments, in               our modeling does not include                         statement is based on estimates
                                                   the aggregate, or by the private sector in              assumptions about behavioral changes                  provided in this regulatory impact
                                                   the amount of $148 million in any 1                     that might lower fee-for-service                      analysis. As described in Table 6, we
                                                   year.                                                   spending. Since our impact model                      estimate the proposed changes to the
                                                                                                           estimates that 60 to 80 hospitals would               CJR model would continue to result in
                                                   J. Federalism                                           choose voluntary participation and that               savings to the federal government of
                                                      We do not believe that there is                      these potential voluntary participants                approximately $204 million over the 3
                                                   anything in this proposed rule that                     would be expected to earn only positive               remaining performance years of the
                                                   either explicitly or implicitly preempts                reconciliation payments under the                     model from 2018 to 2020, noting these
                                                   any state law, and furthermore we do                    model, these positive payments to the                 changes do reduce the original CJR
                                                   not believe that this proposed rule                     voluntary participants would offset                   estimated savings by approximately $90
                                                   would have a substantial direct effect on               some of the savings garnered from                     million. In Table 7, the overall
                                                   state or local governments, preempt                     mandatory participants. However, we                   annualized change in payments (for all
                                                   state law, or otherwise have a federalism               are proposing to allow voluntary                      provisions in this proposed rule relative
                                                   implication.                                            participation in the proposed 33                      to the CJR model as originally finalized)
                                                                                                           voluntary participation MSAs and for                  based on a 7-percent and 3-percent
                                                   K. Reducing Regulation and Controlling                  low-volume and rural hospitals to                     discount rate, results in net federal
                                                   Regulatory Costs                                        permit hospitals that have made                       monetary transfer from the federal
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                                                      Executive Order 13771, titled                        investments in care redesign and                      government to participant IPPS
                                                   Reducing Regulation and Controlling                     commitments to improvement to                         hospitals of $73.2 million and $82.4
                                                   Regulatory Costs (82 FR 9339), was                      continue to participate in the model for              million in 2017 dollars, respectively,
                                                   issued on January 30, 2017. This                        the remaining 3 years. We believe our                 over the period of 2018 to 2020.




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                                                                            Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                                       39331

                                                          TABLE 7—ACCOUNTING STATEMENT CHANGES TO COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL FOR
                                                                                       PERFORMANCE YEARS 2018 TO 2020
                                                                                                                                                                                          Units
                                                                                        Category                                               Estimates                         Discount rate
                                                                                                                                                                Year dollar                              Period covered
                                                                                                                                                                                     (%)

                                                   Costs: *
                                                       Upfront cost of regulation ($million) .............................................             0.03             2017                      7   2018 upfront cost.
                                                                                                                                                       0.03             2017                      3   2018 upfront cost.

                                                                                From Whom to Whom                                                    Incurred by IPPS Hospitals as a result of this regulation.

                                                   Transfers:
                                                       Annualized/Monetized ($million/year) ...........................................              27.90              2017                      7   2018–2020.
                                                                                                                                                     29.14              2017                      3   2018–2020.

                                                                               From Whom To Whom                                                  From the Federal Government to Participating IPPS Hospitals.
                                                      * The cost includes the regulatory familiarization and completing opt-in templates for up to 80 hospitals to join the CJR model.


                                                   M. Conclusion                                                 1115A of the Social Security Act, the                    Participant hospital means one of the
                                                      This analysis, together with the                           Centers for Medicare & Medicaid                        following:
                                                   remainder of this preamble, provides                          Services proposes to amend 42 CFR                        (1) During performance years 1 and 2
                                                   the Regulatory Impact Analysis of a                           Chapter IV, as follows:                                of the CJR model and the period from
                                                   rule. As a result of this proposed rule,                                                                             January 1, 2018 to January 31, 2018 of
                                                                                                                 PART 510—COMPREHENSIVE CARE                            performance year 3, a hospital (other
                                                   we estimate that the financial impact of
                                                                                                                 FOR JOINT REPLACEMENT MODEL                            than a hospital excepted under
                                                   the changes to the CJR model proposed
                                                   here would result in a reduction to                                                                                  § 510.100(b)) with a CCN primary
                                                                                                                 ■ 1. The authority citation for part 510               address located in one of the geographic
                                                   previously estimated savings by $90                           continues to read as follows:
                                                   million over the 3 remaining                                                                                         areas selected for participation in the
                                                   performance years (2018 through 2020)                           Authority: Secs. 1102, 1115A, and 1871 of            CJR model in accordance with
                                                                                                                 the Social Security Act (42 U.S.C. 1302,               § 510.105.
                                                   although we note that the CJR model                           1315(a), and 1395hh).
                                                   would still be estimated to save the                                                                                   (2) Beginning February 1, 2018, a
                                                   Medicare program approximately $204                           ■  2. Section 510.2 is amended by—                     hospital (other than a hospital excepted
                                                   million over the remaining three                              ■  a. Revising the definition of ‘‘Actual              under § 510.100(b)) that is one of the
                                                   performance years.                                            episode payment’’;                                     following:
                                                                                                                 ■ b. Adding, in alphabetical order,                      (i) A hospital with a CCN primary
                                                      In accordance with the provisions of
                                                   Executive Order 12866, this rule was                          definitions of ‘‘Low-volume hospital’’                 address located in a mandatory MSA as
                                                   reviewed by the Office of Management                          and ‘‘mandatory MSA’’.                                 of February 1, 2018 that is not a rural
                                                                                                                 ■ c. Revising the definition of                        hospital or a low-volume hospital on
                                                   and Budget.
                                                                                                                 ‘‘participant hospital’’; and                          that date.
                                                   VI. Response to Comments                                      ■ d. Adding the definition of ‘‘voluntary                (ii) A hospital that is a rural hospital
                                                     Because of the large number of public                       MSA’’.                                                 or low-volume hospital with a CCN
                                                   comments we normally receive on                                  The revisions and additions read as                 primary address located in a mandatory
                                                   Federal Register documents, we are not                        follows:                                               MSA that makes an election to
                                                   able to acknowledge or respond to them                        § 510.2     Definitions.                               participate in the CJR model in
                                                   individually. We will consider all                                                                                   accordance with § 510.115.
                                                   comments we receive by the date and                           *     *     *     *     *
                                                                                                                                                                          (iii) A hospital with a CCN primary
                                                   time specified in the DATES section of                          Actual episode payment means the
                                                                                                                                                                        address located in a voluntary MSA that
                                                   this preamble, and, when we proceed                           sum of standardized Medicare claims
                                                                                                                                                                        makes an election to participate in the
                                                   with a subsequent document, we will                           payments for the items and services that
                                                                                                                                                                        CJR model in accordance with
                                                   respond to the comments in the                                are included in the episode in
                                                                                                                                                                        § 510.115.
                                                   preamble to that document.                                    accordance with § 510.200(b), excluding
                                                                                                                 the items and services described in                    *      *    *     *     *
                                                   List of Subjects                                              § 510.200(d).                                            Voluntary MSA means an MSA
                                                                                                                                                                        designated by CMS as a voluntary
                                                   42 CFR Part 510                                               *     *     *     *     *
                                                                                                                   Low-volume hospital means a hospital                 participation MSA in accordance with
                                                     Administrative Practice and                                                                                        § 510.105(a).
                                                                                                                 identified by CMS as having fewer than
                                                   Procedure, Health facilities, Health                                                                                 ■ 3. Section 510.105 is amended by
                                                                                                                 20 LEJR episodes in total across the 3
                                                   professions, Medicare, and Reporting                                                                                 revising paragraph (a) to read as follows:
                                                                                                                 historical years of data used to calculate
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                                                   and recordkeeping requirements.
                                                                                                                 the performance year 1 CJR episode                     § 510.105   Geographic areas.
                                                   42 CFR Part 512                                               target prices.                                           (a) General. The geographic areas for
                                                     Administrative Practice and                                 *     *     *     *     *                              inclusion in the CJR model are obtained
                                                   Procedure, Health facilities, Health                            Mandatory MSA means an MSA                           based on a stratified random sampling
                                                   professions, Medicare, and Reporting                          designated by CMS as a mandatory                       of certain MSAs in the United States.
                                                   and recordkeeping requirements.                               participation MSA in accordance with                     (1) All counties within each of the
                                                     For the reasons set forth in the                            § 510.105(a).                                          selected MSAs are selected for inclusion
                                                   preamble, under the authority at section                      *     *     *     *     *                              in the CJR model.


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                                                   39332                 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules

                                                      (2) Beginning with performance year                  1, 2018, on May 19, 2017 (82 FR 22895),                 (i) Ceases to meet any criterion listed
                                                   3, the selected MSAs are designated as                  is amended by removing paragraph                      in § 510.205.
                                                   either mandatory participation MSAs or                  (b)(4), revising paragraph (c), and                     (ii) Is readmitted to any participant
                                                   voluntary participation MSAs.                           adding paragraphs (d) and (e).                        hospital for another anchor
                                                   *      *    *    *     *                                   The revision and additions read as                 hospitalization.
                                                   ■ 4. Section 510.115 is added to read as                follows:                                                (iii) Initiates an LEJR episode under
                                                   follows:                                                                                                      BPCI.
                                                                                                           § 510.120 CJR participant hospital CEHRT                (iv) Dies.
                                                                                                           track requirements.
                                                   § 510.115   Voluntary participation election.                                                                   (2) For performance year 3, the
                                                      (a) General. To continue participation               *       *    *     *     *                            participant hospital did not submit a
                                                                                                              (c) Clinician engagement list. Each                participation election letter that was
                                                   in performance year 3 and participate in
                                                                                                           participant hospital that chooses CEHRT               accepted by CMS to continue
                                                   performance year 4 and performance
                                                                                                           use as provided in paragraph (a)(1) of                participation in the model.
                                                   year 5, the following hospitals must
                                                                                                           this section must submit to CMS a                     ■ 7. Section 510.300 is amended by
                                                   submit a written participation election
                                                                                                           clinician engagement list in a form and               revising paragraph (b)(6) to read as
                                                   letter as described in paragraph (c) of
                                                                                                           manner specified by CMS on a no more                  follows:
                                                   this section during the voluntary
                                                                                                           than quarterly basis. This list must
                                                   participation election period specified
                                                                                                           include the following information on                  § 510.300 Determination of quality-
                                                   in paragraph (b) of this section:                                                                             adjusted episode target prices.
                                                                                                           individuals for the period of the
                                                      (1) Hospitals (other than those
                                                                                                           performance year specified by CMS:                    *     *    *     *     *
                                                   excluded under § 510.100(b)) with a                        (1) For each physician, nonphysician                 (b) * * *
                                                   CCN primary address in a voluntary                      practitioner, or therapist who is not a                 (6) Exclusion of incentive programs
                                                   MSA.                                                    CJR collaborator during the period of the             and add-on payments under existing
                                                      (2) Low-volume hospitals with a CCN                  CJR model performance year specified                  Medicare payment systems. Certain
                                                   primary address in a mandatory MSA.                     by CMS but who does have a
                                                      (3) Rural hospitals with a CCN                                                                             incentive programs and add-on
                                                                                                           contractual relationship with the                     payments are excluded from historical
                                                   primary address in a mandatory MSA.                     participant hospital based at least in
                                                      (b) Voluntary participation election                                                                       episode payments by using, with certain
                                                                                                           part on supporting the participant                    modifications, the CMS Price (Payment)
                                                   period. The voluntary participation                     hospital’s quality or cost goals under the
                                                   election period begins on January 1,                                                                          Standardization Detailed Methodology
                                                                                                           CJR model during the period of the                    used for the Medicare spending per
                                                   2018 and ends on January 31, 2018.                      performance year specified by CMS:
                                                      (c) Voluntary participation election                                                                       beneficiary measure in the Hospital
                                                                                                              (i) The name, TIN, and NPI of the                  Value-Based Purchasing Program.
                                                   letter. The voluntary participation                     individual.
                                                   election letter serves as the model                        (ii) The start date and, if applicable,            *     *    *     *     *
                                                   participation agreement. CMS accepts                                                                          ■ 8. Section 510.305 is amended by
                                                                                                           the end date for the contractual
                                                   the voluntary participation election                                                                          revising paragraph (d)(1) to read as
                                                                                                           relationship between the individual and
                                                   letter if the letter meets all of the                                                                         follows:
                                                                                                           participant hospital.
                                                   following criteria:                                        (2) [Reserved]                                     § 510.305 Determination of the NPRA and
                                                      (1) Includes the following:                             (d) Attestation to no individuals. If              reconciliation process.
                                                      (i) Hospital name.                                   there are no individuals that meet the
                                                      (ii) Hospital address.                                                                                     *      *    *      *    *
                                                                                                           requirements to be reported, as specified               (d) * * *
                                                      (iii) Hospital CCN.                                  in paragraphs (b)(1) through (3) or
                                                      (iv) Hospital contact name, telephone                                                                        (1) Beginning 2 months after the end
                                                                                                           paragraph (c) of this section, the                    of each performance year, CMS does all
                                                   number, and email address.                              participant hospital must attest in a
                                                      (v) Model name (that is, CJR model).                                                                       of the following:
                                                                                                           form and manner required by CMS that                    (i) Performs a reconciliation
                                                      (vi) Attestation of CEHRT use as                     there are no individuals to report.
                                                   specified in § 510.120(a)(1) (if the                                                                          calculation to establish an NPRA for
                                                                                                              (e) Documentation requirements. (1)                each participant hospital.
                                                   hospital is choosing to participate in the              Each participant hospital that chooses
                                                   Advanced APM track).                                                                                            (ii) For participant hospitals that
                                                                                                           CEHRT use as provided in paragraph                    experience a reorganization event in
                                                      (2) Includes a certification that the                (a)(1) of this section must maintain
                                                   hospital will—                                                                                                which one or more hospitals reorganize
                                                                                                           documentation of their attestation to                 under the CCN of a participant hospital
                                                      (i) Comply with all applicable                       CEHRT use, clinician financial
                                                   requirements of this part and all other                                                                       performs—
                                                                                                           arrangements lists, and clinician                       (A) Separate reconciliation
                                                   laws and regulations applicable to its                  engagement lists.
                                                   participation in the CJR model; and                                                                           calculations (during both initial and
                                                                                                              (2) The participant hospital must                  subsequent reconciliations for a
                                                      (ii) Submit data or information to                   retain and provide access to the
                                                   CMS that is accurate, complete and                                                                            performance year) for each predecessor
                                                                                                           required documentation in accordance                  participant hospital for episodes where
                                                   truthful, including, but not limited to,                with § 510.110.
                                                   the participation election letter and any                                                                     anchor hospitalization admission
                                                                                                           ■ 6. Section 510.210 is amended by
                                                   quality data or other information that                                                                        occurred before the effective date of the
                                                                                                           revising paragraph (b) to read as follows:            reorganization event; and
                                                   CMS uses in its reconciliation
                                                                                                                                                                   (B) Reconciliation calculations
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                                                   processes.                                              § 510.210    Determination of the episode.
                                                      (3) Is signed by the hospital                        *     *    *     *     *                              (during both initial and subsequent
                                                   administrator, CFO or CEO.                                (b) Cancellation of an episode. The                 reconciliations for a performance year)
                                                      (4) Is submitted in the form and                     episode is canceled and is not included               for each new or surviving participant
                                                   manner specified by CMS.                                in the determination of NPRA as                       hospital for episodes where the anchor
                                                   ■ 5. Section 510.120, as added January                  specified in § 510.305 if any of the                  hospitalization admission occurred on
                                                   3, 2017 (82 FR 180), delayed until                      following occur:                                      or after the effective date of the
                                                   October 1, 2017, on March 21, 2017 (82                    (1) The beneficiary does any of the                 reorganization event.
                                                   FR 14464), further delayed until January                following during the episode:                         *      *    *      *    *


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                                                                         Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules                                               39333

                                                   ■ 9. Section 510.410 is amended by                      § 510.65 Waiver of certain telehealth                 further delayed until January 1, 2018, on
                                                   adding paragraph (b)(1)(i)(G) to read as                requirements.                                         May 19, 2017 (82 FR 22895), is removed
                                                   follows:                                                *     *     *    *    *                               and reserved.
                                                                                                             (c) * * *
                                                   § 510.410   Compliance enforcement.                                                                             Dated: August 10, 2017.
                                                                                                             (2) CMS waives the payment
                                                   *     *     *    *     *                                requirements under section                            Seema Verma,
                                                     (b) * * *                                             1834(m)(2)(B) of the Act to allow the                 Administrator, Centers for Medicare &
                                                     (1) * * *                                             distant site payment for telehealth home              Medicaid Services.
                                                     (i) * * *                                             visit HCPCS codes unique to this model.                 Dated: August 11, 2017.
                                                     (G) Failing to participate in CJR
                                                   model-related evaluation activities                     *     *     *    *    *                               Thomas E. Price,
                                                   conducted by CMS or its contractors or                                                                        Secretary, Department of Health and Human
                                                                                                           PART 512—[REMOVED AND                                 Services.
                                                   both.
                                                                                                           RESERVED]                                             [FR Doc. 2017–17446 Filed 8–15–17; 4:15 pm]
                                                   *     *     *    *     *
                                                   ■ 10. Section 510.605 is amended by                     ■ 11. Part 512, as added January 3, 2017              BILLING CODE 4120–01–P
                                                   revising paragraph (c)(2) to read as                    (82 FR 180), delayed until October 1,
                                                   follows:                                                2017, on March 21, 2017 (82 FR 14464),
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Document Created: 2017-08-17 01:42:27
Document Modified: 2017-08-17 01:42:27
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesComment period: To be assured consideration, comments on this
ContactFor questions related to the CJR model: [email protected]
FR Citation82 FR 39310 
RIN Number0938-AT16
CFR Citation42 CFR 510
42 CFR 512
CFR AssociatedAdministrative Practice and Procedure; Health Facilities; Health Professions; Medicare and Reporting and Recordkeeping Requirements

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