CMS Finalizes Changes to CJR, Joint Replacement Medicare Model

CMS issued a final rule that makes changes to the Comprehensive Care for Joint Replacement (CJR) model, including revised episode definition and payment methodology, to adapt the model to changes in fee-for-service payment that have occurred over the past few years.

The final rule extended the CJR model for an additional three performance years (through December 31, 2024) for participating hospitals, allowing for CMS to test modifications to the model.

The final rule changed the definition of a CJR episode to include lower extremity joint replacement procedures performed in the hospital outpatient department due to changes over the past several years to the Outpatient Prospective Payment System (OPPS) inpatient only list policies.

CMS’ final rule also adjusted the basis for the target price calculation from three years of claims data to the most recent year of claims data.

Additionally, the final rule removed the national update factor and twice-yearly update to target prices, which account for fee schedule and prospective payment system updates. What’s more, the final rule eliminated anchor factors and weights, and changed the high episode spending cap calculation methodology.

The final rule also changed the CJR reconciliation process by shifting from two reconciliation periods (conducted two months and 14 months after the close of each performance year) to one reconciliation period conducted six months after the close of each performance year.

CMS added episode-level risk adjustment beyond fracture status and a retrospective trend adjustment factor to the model as well.

Reconciliation changes also included high episode spending cap calculation methodology and quality discount factors to better recognize high quality care.

Lastly, CMS finalized its plan to exclude low-volume and rural hospitals in the 34 mandatory Metropolitan Statistical Areas (MSAs) from the model, as well as any voluntary hospitals in the 33 voluntary MSAs that had opted into the model for performance years 3 through 5.

The rule also finalized that voluntary rural and low-volume hospitals and any voluntary hospitals in the 33 voluntary MSAs that opted into the model in 2018 will no longer be able to participate in the model starting on September 30, 2021.

The CJR model is a Medicare Part A and B payment model test that pays all providers and suppliers under the usual Medicare payment system rules for lower extremity joint replacement or reattachment of a lower extremity (collectively known as LEJR) episodes of care.

At the end of a model performance year, spending for the episode is compared to the Medicare target episode price for the responsible hospital. Depending on the hospital’s quality and spending performance, it may receive an additional payment from Medicare or be required to repay Medicare for part of the episode spending.

CMS originally designed the shared savings/shared losses model to improve efficiency and quality of care for Medicare beneficiaries by encouraging hospitals, physicians, and post-acute care providers to improve care coordination.