CMS Hip and Knee Bundled Payment Program

On February 20, 2020, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule revising certain aspects of the Comprehensive Care for Joint Replacement (CJR) model including the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements and the appeals process.

CMS is proposing to extend the CJR model for an additional three years, through Dec. 31, 2023, but only to hospitals in the 34 metropolitan statistical areas in which participation was mandatory. Hospitals participating in the 33 “voluntary” MSAs, as well as all low-volume and rural hospitals that have elected to participate, will continue to see the model end on Dec. 31, 2020.

In addition, CMS is proposing to make changes to the target price calculation. CMS is proposing to change the basis for the target price from 3 years of claims data to the most recent one year of claims data, to remove the national update factor and twice yearly update to the target prices that accounts for prospective payment system and fee schedule updates, to remove anchor factors and weights, and to change the high episode spending cap calculation methodology.

CMS is also proposing to change the definition of an ‘episode of care’ to include outpatient procedures, for which the beneficiary would not be admitted to the participant hospital. This is due to the fact that Medicare beneficiaries can receive a total knee or total hip replacement on an outpatient basis.