CJR and Rehab Therapy: How Do We Coexist. Session Objectives

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1 CJR and Rehab Therapy: How Do We Coexist Rick Gawenda, PT Gawenda Seminars & Consulting Ascend 2016 September 9, 2016 Session Objectives Identify the start and end period of the CJR model for knee and hip joint replacements. List what services provided post-discharge are included in the CJR model cost calculation Describe how outpatient physical therapists in private practice will be paid in the CJR model Analyze the reward and risk factors in a collaboration agreement with a participating hospital Recite how target pricing and reconciliation payment and/or repayment is determined 2 1

2 Comprehensive Care for Joint Replacement (CJR) Model CMS did implement CJR model in 67 geographic areas defined by metropolitan statistical areas (MSAs) on April 1, 2016 for hospitals paid under the Inpatient Prospective Payment System and continue until December 31, 2020 MSAs are counties associated with a core urban area that has a population of at least 50,000 Non-MSA counties (no urban core area or urban core area of less than 50,000 population) were not eligible for selection Be 3 Comprehensive Care for Joint Replacement (CJR) Model Participation is mandatory for approximately 800 hospitals in those 67 geographic areas Hospitals outside of the 67 geographic areas are not able to participate in the CJR model Hospitals participating in model 1 or at-risk for LEJR episodes under Models 2 or 4 of BPCI are not eligible to participate in CJR Does not apply to Medicare Managed Care plans or critical access hospitals 4 2

3 CJR Model Beneficiary Inclusion Criteria Beneficiary is enrolled in Medicare Part A and Part B The beneficiary's eligibility for Medicare is not on the basis of the End-Stage Renal Disease benefit The beneficiary is not enrolled in any managed care plan The beneficiary is not covered under a United Mine Workers of America health plan Medicare is the primary payer 5 Comprehensive Care for Joint Replacement (CJR) Model Episode of care begins with an admission to a participant hospital and is ultimately discharged under MS-DRG 469 (Major joint replacement or reattachment of lower extremity with major complications or comorbidities) or MS-DRG 470 (Major joint replacement or reattachment of lower extremity without major complications or comorbidities) and ends 90 days post-discharge in order to cover the complete period of recovery for beneficiaries The day of discharge is counted as the first day of the 90-day bundle Be 6 3

4 Comprehensive Care for Joint Replacement (CJR) Model The episode includes all related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, with the exception of certain exclusions Be 7 Comprehensive Care for Joint Replacement (CJR) Model Services Included Physicians services Inpatient hospital services including readmissions Inpatient psychiatric facility services Long-term care hospital services Inpatient Rehabilitation Facility services Skilled Nursing Facility services Be 8 4

5 Comprehensive Care for Joint Replacement (CJR) Model Services Included Home Health Agency services Hospital outpatient services Independent outpatient therapy services Clinical laboratory services Durable Medical Equipment Part B drugs Hospice Be 9 Comprehensive Care for Joint Replacement (CJR) Model Providers of outpatient therapy services (including PTs in private practice), SNF Part A services, inpatient rehabilitation facilities and home health services will be reimbursed under their normal payment method (i.e. Medicare Physician Fee Schedule for outpatient therapy, SNF PPS for Part A stays, etc) Be 10 5

6 CJR Model Target Pricing Every year during the approximate five performance years of this model, CJR hospitals will receive separate episode target prices for MS- DRGs 469 and 470 CMS will also use a simple risk stratification methodology to set different target prices for patients with hip fractures within each MS-DRG CMS determines the target price based on the hospital s recent performance (DRG + 90 days post-discharge spend for a rolling three year period) AND other hospitals in the region Be 11 CJR Model Target Pricing In 2016 and 2017 target pricing will be determined by 2/3 rd hospital specific and 1/3 rd regional In 2018 target pricing will be determined by 1/3 rd hospital specific and 2/3 rd regional In 2019 and 2020, target pricing will be 100% regional Be 12 6

7 13 CJR Model Target Pricing CY 2016 January 2012 December 2014 CY 2017 January 2012 December 2014 CY 2018 January 2014 December 2016 CY 2019 January 2014 December 2016 CY 2020 January 2016 December 2018 Be 14 7

8 CJR Quality Measures - Required The Hospital-Level Risk- Standardized Complication Rate Following Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty (NQF #1550) The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure (NQF #0166) 15 CJR Quality Measures - Optional PROMIS Global (all items) Veterans Rand 12 (all items) Knee injury and Osteoarthritis Outcome Score (KOOS) (all items) Hip disability and Osteoarthritis Outcome Score (HOOS) (all items) 16 8

9 CJR Discount Structure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment <4.0 Below Acceptable No No 3.0% Acceptable Yes No 3.0% Good Yes Yes 2.0% >13.2 Excellent Yes Yes 1.5% 17 CJR Discount Structure Composite Quality Score Quality Category Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 <4.0 Below Acceptable N/A 2.0% 3.0% Acceptable N/A 2.0% 3.0% Good N/A 1.0% 2.0% >13.2 Excellent N/A 0.5% 1.5% 18 9

10 CJR Stop-Loss & Stop-Gain Policy CMS will limit how much a hospital can gain (in reconciliation payments from Medicare) or lose (in repayments back to Medicare) based on its actual episode payments relative to the target prices. These are termed stop-gain and stop-loss limits, respectively See next slide 19 CJR Stop-Loss & Stop-Gain Policy Year Stop-Gain Limit Stop-Loss Limit April 1, 2016 December 31, % N/A Calendar Year % 5% Calendar Year % 10% Calendar Year % 20% Calendar Year % 20% 20 10

11 Comprehensive Care for Joint Replacement (CJR) Model At the end of a model performance year, actual spending for the episode (total expenditures for related services under Medicare Parts A and B) is compared to the Medicare target episode price for the responsible hospital. Depending on the participant hospital s quality and episode spending performance, the hospital may receive an additional payment from Medicare or be required to repay Medicare for a portion of the episode spending Be 21 Comprehensive Care for Joint Replacement (CJR) Model The model will allow participant hospitals to enter into financial arrangements with certain types of providers and suppliers (SNFs, long-term care hospitals, HHAs, inpatient rehabilitation facilities, physician and non-physician practitioners, and outpatient therapy providers) Those arrangements will allow participant hospitals to share, subject to the limitations outlined in the rule, with these third-party providers and entities (called Collaborators) the following: reconciliation payments, internal cost savings, and the responsibility for repayment to Medicare Be 22 11

12 Comprehensive Care for Joint Replacement (CJR) Model CMS places a limit on how much financial risk a CJR hospital is allowed to share with Collaborators A CJR hospital must retain at least 50 percent of its total risk, meaning that if the hospital owes CMS a repayment, it cannot share more than 50 percent of that repayment responsibility with Collaborators Additionally, it cannot share more than 25 percent of its responsibility with any single CJR Collaborator Be 23 CJR Case Example Medicare TKR in calendar year 2019 (MS-DRG 470) Hospital has entered into a financial arrangement with Rick Gawenda who practices at Awesome Physical Therapy and Rick Gawenda has assumed 25% financial responsibility Target price for Hospital is $24,000 and after the automatic 3% reduction is $23,280 In CY 2019, hospital performs 75 TKR s and all 75 TKR s were referred to Rick Gawenda at Awesome Physical Therapy for physical therapy. TKR patient s did not receive any other post acute care services (SNF, Home Health, etc.) and hospital has not entered into any other financial arrangements 24 12

13 CJR Case Example Hospital target price for 75 cases is $1,746,000 ($23,280 times 75 cases) CMS total expenditures for the 75 cases was $1,547,450 Hospital was $198,550 under their target price In CY 2019, hospital quality score was an 11.2 Due to this quality score, hospital will receive a 2% reduction off their target price instead of 3% 25 CJR Case Example New target price is now $23,520 per case Hospital target price for the 75 cases is now $1,764,000 CMS total expenditures for the 75 cases was $1,547,450 Hospital was $216,550 under their target price Stop-gain limit for CY 2019 is 20% Hospital would receive a reconciliation payment from CMS of $43,310 Rick Gawenda had a financial agreement to assume 25% of the risk so Hospital would pay Rick Gawenda 25% of the $43,310 which is $10,

14 CJR Should I Become a Collaborator Is your practice in one or near one of the 67 geographical areas? If yes, do you receive Medicare referrals who had a THA or TKR at a CJR hospital? If yes, how many referrals per month or per year and how many visits does this translate into in a calendar year? What is the CJR Hospital CMS Star Rating? 27 CJR Should I Become a Collaborator Do you know your cost per episode to provide physical therapy to a THA and TKR patient? Do you collect outcome data on your THA and TKR patients? Are you aware of and know who the other Collaborators are that may be involved in the care of patient s you provide PT to on an outpatient basis? Do you know the Star ratings of other Collaborators (SNF, HHA)? 28 14

15 CJR Should I Become a Collaborator You understand how the total cost of care is calculated? You understand how quality measures and quality scores impact Target Pricing? You know if CJR hospital will conduct optional quality measure? You have a health care attorney that understands CJR bundling and has your best interest in mind? 29 CJR Model What s On The Horizon CMS has proposed to expand the CJR rule to include other surgical treatments for hip and femur fractures beyond hip replacement MS-DRG 480 (Hip and femur procedures except major joint with major complication or comorbidity (MCC) MS-DRG 481 (Hip and femur procedures except major joint with complication or comorbidity (CC) MS-DRG 482 (Hip and femur procedures except major joint without CC or MCC) 30 15

16 CJR Model What s On The Horizon The proposed bundle would include all related items and services paid under Medicare Part A and Part B with the exception of certain exclusions determined by CMS CMS proposes to use the existing 67 MSAs selected for the current CJR model Proposed effective date is July 1, References CMS CJR Model American Physical Therapy Association CMS Proposed Rule Be 32 16

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The Pain or the Gain?

The Pain or the Gain? Comprehensive Care Joint Replacement (CJR) Model DRG 469 (Major joint replacement with major complications) DRG 470 (Major joint without major complications or comorbidities) Actual