Home Health & Hospice Week

Joint replacement demo will limit post-acute care networks, experts warn.

The new Comprehensive Care for Joint Replacement Model is going to create winners and losers in home care, and if you don’t want to be the latter you’ll have to prepare.

Recap: Back in November, the Centers for Medicare & Medicaid Services finalized the CJR program for 67 areas affecting about 800 hospitals in 33 states. Under the model that begins April 1, 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. 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. (For more program details, see Eli’s HCW, Vol. XXV, No. 8.)

Technically, the CJR model affects only hospital pay. But since it uses costs from hospital and PAC FFS providers in the calculation, the demo will have a big impact on home care providers too, experts warn.

CJR, “like so many of CMS’s recent initiatives, will create winners and losers in the home care sector, and will do so far beyond the designated CJR areas,” predicts Bobbey Lolley of the Home Care Association of Florida. Florida has eight metro areas in the model.

“PAC providers are keenly aware that CJR has the chance to make their bottom line a winner (if they are chosen by the hospital/surgeon) or a loser, as their most profitable segment of business comes from orthopedic rehab referrals,” says consultant Shawn Matheson with Salt Lake City, Utah-based Leavitt Partners, in a post on the firm’s website.

2 Trends On The Rise

The CJR model combines two themes gaining prominence in Medicare payment — reimbursement based on quality and bundled payments/care coordination.

Don’t expect to stick your head in the sand and let these areas of focus pass you by unharmed, whether you’re in a CJR area or not. “Value-based purchasing is going to be part of our health care market for some time to come,” forecasts Marcia Tetterton with the Virginia Association for Home Care and Hospice. Virginia has one MSA in the program.

“This whole thing is headed toward bundled payments,” attorney Robert Markette Jr. with Hall Render warns of Medicare payments. Current programs ranging from Accountable Care Organizations, BCPI, CJR, VBP and more are driving a focus on quality and financial performance, resulting in consolidation. Multiple proposals for a PPS across post-acute sites aim at the same goals.

With that future in mind, you should heed this expert advice to prepare for CJR and other bundled and value-based payment methodologies:

1. Educate yourself. You can’t succeed in a program you don’t know much about. You can learn the CJR details in the final rule at www.gpo.gov/fdsys/pkg/FR-2015-11-24/pdf/2015-29438.pdf and on CMS’s CRJ webpage at https://innovation.cms.gov/initiatives/cjr, which has many links to additional resources, a list of the 67 MSAs included in the project, and a list of the participating hospitals updated Feb. 10.

Jane Kelly with the Kansas Home Care Association advises agencies to seek out education and training from their state and national trade groups, among other sources. Kansas has two MSAs in the CJR program.

Stay on the lookout for the answers to pending questions. For example, HHAs in Illinois want to know when hospitals will be receiving their target prices, relates Chicago-based regulatory consultant Rebecca Friedman Zuber. In the Provider and Technical Fact Sheet for the program, CMS says it “will provide participant hospitals with … the target

prices prior to the start of each performance year.” CMS did not respond to a request from Eli for an estimated release date for that information.

2. Know your numbers. A hospital’s success under CJR will depend on efficient post-acute service utilization and prevention of unnecessary hospital readmissions. That means home care providers with high financial and quality outcomes will be the ones who win hospitals’ referrals, says consultant Duane Blackwell with SoSo Solutions in Alexandria, La.

Know where your financial and readmission stats stand not just overall, but specifically for your lower extremity joint replacement (LEJR) rehab patients, experts urge.

3. Improve your numbers. Once you’ve got a handle on your metrics, it’s time to work on improving them. And don’t expect cost-cutting and quality outcome reduction to go hand-in-hand. Your need to boost your quality outcomes while keeping costs low under FFS Medicare.

“Agencies have to learn to be high quality, cost-efficient partners with hospitals,” Blackwell advises. “If not, the business will go somewhere else.”

Outcomes improvement won’t happen overnight, Blackwell acknowledges. It requires systemic changes, and HHAs that have already undertaken the QI process will have a head start.

But with bundling and VBP in its operational infancy, agencies have some time to catch up. For example, CJR doesn’t penalize hospital payments until the second year of the model, which starts in January 2017.

Glean CJR and bundling wisdom from this proverb, Blackwell offers: “The best time to plant a tree was 20 years ago. The second best time is today.”

4. Promote the value of home care. Hospitals probably aren’t going to come knocking on your door to partner under CJR. Representatives in many of the 33 CJR states tell Eli that hospitals in their CJR MSAs have not reached out at all about the program that starts in less than two months.

It’s on you to convince referring hospitals that you are the right partner under the new model.

Versus SNFs: “HHAs are a very attractive post-acute care partner for hospitals in orthopaedic bundles, as HHA daily rates are much less expensive than SNF rates,” Matheson observes.

Analysis conducted by Avalere Health shows that the percentage of Medicare beneficiaries rehospitalized within 30 days of major joint replacement or reattachment of lower extremity without major complications is 3.84 percent for those who were discharged to home health versus 7.53 percent for individuals discharged to skilled nursing, pointed out the Visiting Nurse Associations of America in its comment letter on the proposed CJR rule.

5. Promote your individual agency’s value. Under the program, hospitals can’t restrict patient choice. However, “Hospitals, if desired, may recommend ‘preferred providers,’ that is, high quality PAC providers/suppliers with whom they have relationships (either financial and/or clinical) for the purpose of improving quality, efficiency, or continuity of care,” CMS specified in the CJR final rule published in the Nov. 24, 2015, Federal Register.

Expect hospitals to narrow their preferred providers to as few as two, Matheson advises. “Hospitals with their own HHA are inclined to integrate and coordinate their services more closely, whereas hospitals without their own HHA want to engage top-performing agencies.”

That hospital endorsement will result in those “preferred providers” receiving the vast majority of hospital referrals, Markette believes.

“The more progressive agencies are … formulating a ‘value proposition’ of sorts to share with hospitals,” comparing their financial and quality outcomes to other PAC providers, Blackwell says. “The value proposition … explains ‘Why you should choose my agency for CJR.’”

Analogy: HHAs may not want to think of themselves as partnering with hospitals in CJR, Blackwell recommends. A vendor-purchaser relationship is closer to the mark right now, “with the hospital being the purchaser,” he tells Eli. “In order for agencies to be successful CJR vendors, they are going to have to have the best product to offer.”

“You should be out there touting it,” says Susan Adams, VP for alliance integration with Masonicare in Wallingford, Ct. Hitting on your experience with CJR patients and your superior data is key, Adams advises.

CJR is also an opportunity to promote your non-joint replacement services as well, Adams adds.

6. Be bold: Just sticking a toe in the CJR waters may not bear fruit. “If an agency has a significant amount of therapy or joint business, then that agency must prepare like it has already landed the big preferred provider contract with the local hospital,” Lolley advises. “They will never be considered, never asked to dance, if they have not prepared.”

7. Pay attention to star ratings. The CJR final rule set out a minimum star rating requirement for skilled nursing facility partners for waiver of the SNF 3-day rule. The CJR rule contains no star rating requirements for HHAs, but you can expect those to become commonplace too under forthcoming programs, Markette predicts. The CJR SNF floor is three stars, and agencies can probably expect the same, he says.

8. Improve your communication with hospitals. Even once you enter into a CJR relationship with a hospital, your work isn’t done. “Just because you are talking and using the same words, doesn’t mean you’re talking about the same thing,” Markette cautions.

HHAs and hospitals often have a hard time working together, so make sure you are communicating clearly and sharing expectations, information, etc., he adds.

9. Don’t expect cash. In the CJR final rule, CMS sets out guidelines for hospitals and their partners to share potential CJR rewards through gainsharing arrangements. But HHAs nationwide are reporting no such financial arrangements with partnering hospitals as the program’s implementation date nears.

“‘Gainsharing’ for agencies will be realized in the form of increased admission flows if agency performance merits it,” Blackwell predicts. “A bigger piece of the pie.”

10. Gear up for more bundling. As bundling and VBP in Medicare increase, you’ll need to adjust your strategic planning accordingly. “Most home health providers aren’t looking past face-toface” and other industry-specific challenges, Markette cautions. “You need to be working with hospitals” under programs ranging from ACOs to BCPI to CJR — and the many similar models that will follow.

“Figure out which ship you need to be on and get a ticket,” Markette urges.