CMS proposes changes to CJR: 6 key thoughts on what this means for orthopedic bundled payments

Spinal Tech

Over the past few weeks, CMS proposed a rule to reduce the number of mandatory geographic areas participating in the Comprehensive Care for Joint Replacement bundled payments and a separate rule that would make participation in CJR voluntary for low volume and rural hospitals in all geographic areas. The agency also plans to cancel the surgical hip and femur fracture treatment bundles that were scheduled to begin Jan. 1, 2018.

The American Academy of Orthopaedic Surgeons has advocated for revisions in the process and applauded CMS for proposing these changes. "As we have said before, AAOS strongly supports the efforts of all stakeholders to develop payment models that incentivize care coordination and address rising healthcare costs," said AAOS President William J. Maloney, MD, in a statement. "Additionally, appropriate alternative payment models are a necessary component of the current Quality Payment Program. However, imposing mandatory models on surgeons and facilities lack the familiarity, experience or infrastructure required has serious unintended consequences."


CMS plans to reduce the geographic participation areas from 67 to 34 under the proposed rule. CMS Administrator Seema Verma hopes the updates will allow the agency to test and evaluate improvements in the care process while easing burdens on hospitals. The agency may also test other episode-based models for Medicare beneficiaries.


How will this shift affect orthopedics and healthcare providers going forward? Here are key thoughts from seven physicians, analysts and healthcare industry executives.


Mark Vrahas, MD. Chief of Orthopedics at Cedars-Sinai Medical Center (Los Angeles): "Changes proposed by CMS will likely slow provider and hospital efforts to create bundles but ultimately bundled payments are inevitable and it is unlikely that hospitals that have already created bundled payment programs will return to business as usual. Mandatory CJR has, for the first time, aligned the interests of acute care hospitals, surgeons and extended care facilities, and prompted them to consider the full episode of care rather than just their own pieces of the pie. This has eliminated waste, reduced variation, saved money and improved the patient experience.


At the same time, it has either maintained or improved quality. These changes were possible because hospitals were willing to invest in making changes to avoid CJR losses. Hospitals that have improved the joint experience as a result of CJR are not likely to go back to business as usual, but hospitals that have not put these programs in place are not likely to invest in developing the programs without the impetus from CMS. However, cost saving have been dramatic enough that private insurers are likely to continue the push towards bundled payments regardless of what CMS does."


Jeff Goldsmith, PhD. National Advisor for Navigant (Chicago): "This needs to be taken in the same breath as the delay in physician MIPS requirements under MACRA. Sec. Price’s issue with these initiatives was that they were hospital centric, and handed big pieces of physician incomes to hospitals. I don't think the entire CMMI portfolio will disappear, but the parts of it that disadvantage private docs vs. hospitals very well may."


Jean Drouin, MD. CEO and Co-Founder of Clarify Health Solutions (San Francisco): "The announcement will be most positive for orthopedic surgeons if CMS follows through with its commitment to offer even more voluntary bundle options. That will reward the multitude of entrepreneurial surgeons who are already dipping their toe in commercial bundles and readying themselves to volunteer for a new round of BPCI bundles in 2018. Our discussions across the country already indicate an acceleration of interest on the part of orthopedic surgeons to strike up commercial bundle arrangements.


The driver is that commercial bundles create a win-win situation. Surgeons who are willing to take on the management of an entire bundle can share in the overall savings, thereby counteracting continued pressure on professional fees. Moreover, bundles align all parties — physicians, facilities and payers — in delivering care journeys that are more affordable and yield superior outcomes. If anything, this announcement shifts the focus even more to commercial bundles. The winners will be those that use commercial bundles as the foundation from which to invest in the digital and analytics capabilities that further differentiate their practices from their peers."


Chris Garcia. CEO of Remedy Partners (Darien, Conn.): "We estimate that Medicare bundled payment models are currently impacting more than $10 billion in spending. Expect to see multiples of this program size in the next two years as government and private payers build upon the successes we are achieving today. As these payment models evolve, I believe we will see programs tailored to the unique circumstances of each local healthcare ecosystem. This is to be expected and depends on the acuity of the patient population, the capabilities and supply of physician groups and outpatient facilities, and the structure of the post-acute care environment."


Gail Daubert. Partner at Reed Smith (Washington, D.C.): "These bundles will continue. Orthopedics, especially hip and knee replacement, have been very popular in the bundled payment model. These procedures are well suited to the bundled payment model for several reasons: (1) the episode can be clearly defined, (2) the procedure can be standardized, (3) complications are uncommon, (4) costs are generally predictable, and (5) savings can be achieved.


The future remains bright for these bundles. The surgeons need opportunities to participate in alternative payment models. State Orthopaedic groups have rallied and many have provided specific tools to aid members in understanding bundled payment models. Many hospitals ramped if they were part of CJR and this is also the direction that commercial payers are driving.


Debra McCurdy. Senior Health Policy Analyst at Reed Smith (McLean, Pa.): "The big shift here on the Medicare side is mandatory vs. voluntary participation. More parties will have a choice about whether they can bring savings to the table — but they won’t be forced into arrangements on CMS terms."


Joseph Smith, MD, PhD. CEO of Reflexion Health (San Diego): "Experience with fee-for service medicine has unfortunately, but predictably, resulted in world-leading expenditures without commensurate quality. Alternative payment mechanisms to drive value-based healthcare spending have been broadly championed as the path forward to assure that our healthcare dollars are being spent wisely and our patients experience ever-improving outcomes. CMS' bundled payment initiatives are mechanisms that positively incentivize individuals and organizations to innovate care pathways and develop enabling technologies to improve outcomes while lowering costs.


We must relentlessly incentivize innovation that improves quality and drives down the total cost of care. Bundled payments do just that. And before we even consider removing this payment instrument from healthcare's black bag, it would be incumbent upon us to identify a superior alternative rather than simply move backwards to a system with known failings that incentivizes doing more, but not necessarily better. Patients deserve better."


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