Hundreds of hospitals are apparently unprepared for Medicare's Comprehensive Care for Joint Replacement reimbursement model, survey data shows, but proponents say there is still time to get on the bundled payments bandwagon.
Federal officials are not fooling around when it comes to bundled payments.
On April 1, the Centers for Medicare and Medicaid Services imposed mandatory participation in bundled payments for hip and knee replacement procedures for about 800 hospitals under Medicare's Comprehensive Care for Joint Replacement (CJR) reimbursement model.
In two hospital surveys released last month, the majority of hospitals polled report they are not ready for CJR. A FORCE-TJR survey found 56% of hospital orthopedics programs report being unprepared for CJR. Last week, the Washington, DC-based consultancy Avalere Health released survey results indicating that 60% of the hospitals required to participate in CJR could lose money in the bundled payment model when downside risk begins in January 2017.
CHI, which operates more than 100 hospitals in 19 states, is prepared for CJR mainly because the health system has a couple years of experience with BPCI, Stanley says. But the sprawling nonprofit healthcare provider is far from complacent. "Even though we are very advanced in this and have been doing it for two-and-a-half years, we are constantly re-evaluating and changing our programs. This is not a short-term project. This is a fundamental shift in how healthcare is provided and how it is paid for," he says.
Fred Bentley, vice president of Avalere's Center for Payment & Delivery Innovation, is not surprised at the widespread lack of preparedness for CJR. "[Providers] have really been focused on the care of patients in the four walls of the hospital and not really on the post-discharge side. They have been focused on growing their orthopedics volume and their referrals, and now they're going to be focused on the entire episode. And that's a big shift."
Under the CJR bundled payment model, each participating hospital will be given a target price for hip and knee replacement procedure episodes, which include the cost of post-acute care. The cost of hip and knee replacement procedure episodes for Medicare patients varies widely across the country, from $16,500 to $33,000, according to CMS.
Keys to Unlocking CJR Success
"What happens in the post-acute space is critical to success," Stanley says.
As CHI has ramped up its involvement in bundled payments for hip and knee replacement procedures, garnering a deep understanding of post-acute care and working closely with skilled nursing facilities (SNFs) have been major challenges for the health system. "There was high variability in the discharge destination," he says, noting 10% of joint replacement patients were being discharged to SNFs in one CHI market compared to 50% of patients being sent to SNFs in another market. "We rarely had any insight into it. Now, we're really aligning all of the incentives."
Pre-operative preparations also play a major role in achieving financial success in bundled payments for joint replacement, Stanley says. "It's not just as simple as saying, 'Where are we discharging patients to?' We make sure the patients are tuned up on the front end."
CHI provides several pre-operative services for patients before they have hip and knee replacement procedures, including smoking cessation, diabetes management and weight loss programs.
Mining the wealth of data that Medicare provides to hospitals participating in CJR is another critically important area, Stanley says. "Hospitals need to focus on using the data you get from CMS for both baselines and how care is provided month-to-month."
At one of CHI's hospitals, the readmissions data for hip and knee replacement procedures shocked the orthopedics department, he says. The hospital and its orthopedic surgeons thought the readmissions rate was about 7.5%. "When they looked at the data, they found out their readmissions rates were 15%."
To meet or beat target pricing in CJR, hospitals need to engage all of the stakeholders in the care continuum and set effective "care pathways," Stanley says. Those stakeholders include orthopedic surgeons, advanced practice nurses, SNFs, rehabilitation facilities and home health agencies.
"That care model piece is the hardest to do. Hospitals rarely work with their physicians and community providers on the 30- to 90-day post-operative period."
Physician engagement is critically important for hospitals that are behind the CJR curve, Bentley says. "There's still a lot of work that hospitals can be doing to partner with their physicians… to standardize care and adhere to care protocols. They just have to get more and more efficient at what they're doing."
Gainsharing with physicians is an effective strategy for hospitals participating in CJR to achieve standardization, he says. "They are developing gainsharing arrangements with surgeons. That is getting surgeons to move from using the favorite implant they like to use, and getting the whole program down to three or four implants."
Standardization and adherence to care protocols can be a tough physician-engagement hurdle to clear, Bentley says. "The accusation is that this is cookie-cutter medicine, but that changes when they have skin in the game."
Christopher Cheney is the senior clinical care editor at HealthLeaders.