CMS Issues Final Rule for Comprehensive Care for Joint Replacement Model

On April 29, 2021, the Centers for Medicare and Medicaid Services (CMS) released the final rule that extends and makes changes to the Comprehensive Care for Joint Replacement (CJR) model. This final rule revises the episode definition, payment methodology, and makes other modifications to the model to adapt the CJR model to changes in practice and fee-for-service (FFS) payment occurring over the past several years. The final rule provides the time needed to test modifications to the model by extending the CJR model for an additional three performance years through December 31, 2024 for certain participant hospitals.

For background purposes, the CJR model is a Medicare Part A and B payment model test, led by the CMS Innovation Center and implemented under section 1115A of the Social Security Act. In this model, all providers and suppliers are paid under the usual payment system rules and procedures of the Medicare program throughout the year for episodes of care for lower extremity joint replacement or reattachment of a lower extremity (referred to as LEJR). 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.

Some of the key provisions contained in the final rule include:

• Revision to definition of a CJR episode to now include lower extremity joint replacement procedures performed in the hospital outpatient department;
• Changes to target price calculation from three years of claims data to one year of claims data;
• Changes to the reconciliation process;
• Addition of an episode-level risk adjustment; and
• Finalized the proposal to exclude rural and low-volume hospitals in the 34 mandatory Metropolitan Statistical Areas (MSAs) and any voluntary hospitals in the 33 voluntary MSAs that had opted into the model for performance years 3 through 5.

There is additional information located on the CJR model page on the CMS’ website. The final rule will be published in the May 5, 2021 Federal Register.