The CMS CCJR Rule – From “Must Do” to “Must Have”

I do not envy hospitals or provider organizations in this very fluid phase of US healthcare. Change is everywhere, and it can come out of nowhere. Consider a newly proposed mandatory rule affecting 75 metropolitan areas including more than 800 hospitals. Obviously another compulsory rule is a distraction to your clinicians, your initiatives, and your strategy. It may seem like Meaningful Use all over again. But this rule proposal is different. If harnessed correctly it can create resources to optimize clinician performance, expand initiatives, and add a strategic advantage to your organization’s portfolio.

CMS has proposed the Comprehensive Care for Joint Replacement Model (CCJR), a new bundled payment program for lower extremity joint replacement. Implementation is to begin January 1st, 2016, which doesn’t give the hospitals affected by this rule much time to prepare. Unlike previous bundle pilots in which everyone was learning along the way, CCJR will require a fast and efficient launch.

The CCJR program resembles Model 2 of Bundled Payments for Care Improvement (BPCI), CMS' pilot program for bundled payment. But unlike BPCI, any hospital in the designated Metropolitan Statistical Areas (MSA) would be required to participate. This is a clear reflection of the CMS pledge to shift 50% of Medicare payments to value-based models by 2018. Overall, CCJR foreshadows a broader move towards integrated care for hospitals everywhere.

CMS' choice of joint replacement to introduce mandatory bundled payments is not surprising. Joint replacements are expensive, high-volume procedures with significant cost variation between hospitals and the potential to generate considerable growth. With demonstrated success across these procedures in BPCI already, most hospitals can expect to do well if they get in early and enthusiastically. One payment to all care providers creates incentives that can significantly reduce the overall cost of care and create top-line profits for your organization.


Get In the Race

The simple fact is that all value-based payment models are a “race to the bottom” in terms of reimbursement, and the pioneers will earn the lion’s share. For anyone who has been holding out on value-based models, hoping that fee-for-service is going to be miraculously resurrected in the future, the CMS CCJR rule should remove all doubt. CMS needs to bend their cost curve, and bundled payments have helped. Mandating these 75 MSAs into bundled payments shows what to expect in the future. It may not all be bundles, but this will be a part of the package. With so many clear signals pointing the way, you have to seize the moment and get in, before all of the advantages have gone to your competitors.

Mandate or not, we believe this is an incredible opportunity. What does a bundled payment do other than encourage a better product at a more competitive price? In this new world of healthcare, with rising consumer pressure and squeezed reimbursement, delivering a better episode at a more competitive price is critical. Any organization that delays building the skills to compete today will be left behind tomorrow. And with a limited scope of only two procedures, this is a great occasion to pilot care redesign in a value-based payment model.


Easier Said Than Done

In order to successfully compete, you’ll need to move fast, and install new skills.

  1. These skills must include an assessment of your organization’s workflow and historical claims data. You can use this assessment to build a program strategy that works for you.
  2. The set-up and configuration of your care coordination platform is key. CCJR has mandated only two DRGs, so the number protocols and the need for care redesign should be minimal. That said, your success engaging your providers and patients depends on that care coordination program, because without those providers and patients, the success of the program will be compromised.
  3. You’ll need technology to manage the patient’s episode, and a spreadsheet and phone don’t count.
  4. Program management is an on-going effort and goal. To ensure that financial and quality measures are met you’ll need periodic assessments, but more importantly real-time data and interventions.
  5. Finally you’ll need skills in CMS reconciliation. You could of course take the Agency’s word for it, but the ability to clarify discrepancies would be useful.


Flip the Negative to a Positive

As with many things in life that are initially painful but ultimately good for us, it's the first step that’s most difficult. If your organization approaches this effort reluctantly then your success will likely be compromised. While no one will ever do cartwheels over another federally imposed mandate, this one offers a huge opportunity. CCJR is mandating that you build skills in value-based payments. These are skills you’ll need in the future, because this revolution in healthcare payments is just beginning.