Wednesday, November 18, 2015

CMS Finalizes Joint Replacement Rule

Drew Thies

The Centers for Medicare and Medicaid Services (CMS) Monday finalized a rule that will change how Medicare pays for hip and knee replacements in a broader move by the Obama administration to reward quality over quantity in healthcare.

The Comprehensive Care for Joint Replacement (CJR) program is a mandatory bundling program for lower joint replacement surgeries affecting providers in 67 metropolitan statistical areas (MSAs). Such surgeries are the most common for Medicare’s 55 million beneficiaries.

The new direction seeks to optimize care coordination across a wide range of acute and post-acute care providers. Beginning April 1, hospitals will bear a greater burden of the risk following a lower joint surgery and will be accountable for the costs and quality of the care both during the operation and 90 days after the patient leaves the hospital.

During this episode of care, the hospital can either be rewarded for maintaining low costs while delivering quality care, or, starting in the second year of implementation, can face monetary punishments in the form of Medicare repayments if spending is above target.

Included in the rule is a partial waiver of the three-day hospital stay requirement for patients wishing to have skilled nursing care paid for by Medicare following a stay at a hospital. Current policy dictates that a patient must spend three inpatient days in a hospital before Medicare will cover costs associated with staying in a skilled nursing facility (SNF). The rule, however, waives this requirement for SNFs who have a Five-Star Quality Rating of 3 stars or higher for at least seven of the preceding 12 months, allowing Medicare payments for patients who did not spend 3 days in a hospital following a joint replacement.

CMS released a version of the changes earlier this year in a proposed rule. The final version reduced from 75 the amount of MSAs affected, pushed the implementation date back from January 1, and gave hospitals more time to comply with regulations before they face penalties.

AHCA is currently developing a toolkit of resources for members who will be impacted by the new program.

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