Home Health & Hospice Week

Quality, costs will matter more than ever.

If you think you can shrug off Medicare’s impending Comprehensive Care for Joint Replacement Model, think again — even if you’re not in a CJR area.

Recap: In July 2015, the Centers for Medicare & Medicaid Services proposed the model for 75 metro areas starting Jan. 1, 2016. CMS then finalized the program in November for 67 areas affecting about 800 hospitals in 33 states. CMS bumped the start date to April 1. Under the model, CMS will track all Medicare fee-for-service costs for hip or knee replacement patients for the “CJR episode,” which includes 90 days post-hospital discharge. If a hospital’s CJR patients’ average cost comes in above a set “target price,” CMS will require a repayment.

If its average cost comes in below a target, Medicare will pay the hospital an add-on bonus. (For more details about the program, see box, p. 59). The model is mandatory, but there is an exclusion for hospitals participating in other payment bundling programs under the Bundled Payments for Care Improvement initiative.

Technically, the model affects only hospital pay. In the 2016 Home Health Prospective Payment System final rule, CMS noted that “HHAs are not participants in the proposed CJR Model. As proposed, hospitals are the participants. Home health payments for beneficiaries participating in the proposed CJR are not subject to alteration under that model... [O]nly the hospital payments are at risk.”

Don’t Underestimate CJR’s Impact

But HHAs will see a major impact from this hospital payment change, experts agree. “While agencies may not be direct participants in CJR from a purely technical standpoint, they are absolutely full participants,” says consultant Duane Blackwell with SoSo Solutions in Alexandria, La. “Superior clinical and financial outcomes at the agency level will eventually determine who gets the post-acute business,” Blackwell tells Eli.

Paradigm shift: “I’ve yet to see a reimbursement change that will have more impact on nursing home and home health providers than this CJR bundled payment,” insists consultant Shawn Matheson with Salt Lake City, Utah-based Leavitt Partners, in a post on the firm’s website. “It’s an exciting time for prepared PAC providers, and those unprepared will find themselves with less, [lower extremity joint replacement] referrals.”

The fact that the model is mandatory for hospitals means its impact will be widespread, adds Susan Adams, VP for alliance integration with Masonicare in Wallingford, Ct. That’s a key difference from other Medicare bundled payment models such as BPCI.

The Home Health Value-Based Purchasing demo, which began Jan. 1 in nine states, is also mandatory, Adams points out. The era of being able to opt out of bundled payments is coming to a close, she predicts.

The CJR model will affect HHAs with ortho-focused programs and patients most heavily, expects attorney Robert Markette Jr. with Hall Render in Indianapolis. Ditto for agencies actually in the 67 CJR areas.

But CJR’s influence will spread to other referrals as well, experts warn. Hospitals and their physicians will develop relationships with their favourite agencies under CJR, then will recommend those agencies for all their referrals, Markette predicts.

The result: A de facto limitation on HHAs receiving hospital referrals. Patients will technically retain their choice of agencies, but most patients will go with whomever their hospital and physician recommend, Markette believes.

The program’s influence will also spill over into CJR-adjacent areas, expects Bobby Lolley with the Home Care Association of Florida. Florida has eight MSAs in the program.

CJR Cuts Both Ways

CJR is going to create winners and losers in HHA communities, Lolley predicts.

On one hand: CJR is a terrific opportunity for HHAs with excellent financial and quality outcomes to promote their services to hospitals, Adams offers. Patients want to rehab at home, and HHAs can provide those services at a very low cost compared to skilled nursing facilities. Agencies don’t have to limit their pitch to joint replacement patients — it’s a chance to market their expertise in all service lines, Adams says.

CJR also may be a good chance to gain patients who would otherwise have gone into a SNF, although those patients may come with increased clinical and resource needs.

HHAs sometimes have a notoriously difficult time working with hospitals, Markette notes.

Instead of thinking of it as a partnership, agencies may want to view CJR as a “vendor-purchaser relationship right now, with the hospital being the purchaser,” Blackwell advises. “In order for agencies to be successful CJR vendors, they are going to have to have the best product to offer.”

On the other hand: HHAs who don’t have the quality and financial outcomes to compete are going to lose out on a major referral stream.

The spectrum: “Some agencies will be completely caught off guard, surprised and unprepared,” Lolley says. “Others will have done the work to prepare but still find themselves not receiving the referrals that have chosen to partner with other agencies. And finally, some will find themselves in the right place, at the right time, offering the right services.”

Note: See the CJR final rule at www.gpo.gov/fdsys/pkg/FR-2015-11-24/pdf/2015-29438.pdf.