October 09 2018

CJR: Program Mechanics and Lessons Learned

Episodes of Care Series: We talk a lot about how to be successful in bundled payment models on this blog. But in the coming weeks, we’re going back to basics. We’ll be talking about the mechanics of bundled payments, the theories behind them, and the challenges and opportunities they present to organizations engaging in the shift to value. This week we’re talking CJR or CMS’s Comprehensive Care for Joint Replacement Model. To start from the beginning of the series, read our previous post

In 2014, the Centers for Medicare & Medicaid Services (CMS) recorded over 400,000 hip and knee replacements (also called lower extremity joint replacements or LEJR) at a cost of more than $7 billion for hospitalizations alone. Despite the high volume and routine nature of these procedures, the average cost and quality of these surgeries vary greatly by providers across the US. The average cost of a LEJR procedure including surgery, hospitalization, and recovery, ranges from $16,500 to $33,000. Complication rates for infections or implant failures can occur three times more often at some facilities than others, greatly increasing the chance of readmission which drives up costs. In response to this variation, CMS created the Comprehensive Care for Joint Replacement Model (CJR) to control cost, quality, and outcomes for patients undergoing LEJR surgeries.

The CJR model addresses these cost and quality challenges through bundled payments. As one of the most common inpatient surgeries for Medicare beneficiaries, LEJR procedures are a good candidate for bundled payments because the care can be organized and defined into repeatable episodes of care with observable start and end dates. In theory, bundled payments encourage collaboration between the hospital, physician, and post-acute care (PAC) providers through financial incentives. In other words, providers are bonused or penalized according to their ability to successfully manage the cost and quality of patient care in relation to the episode target price set by CMS.

In reality, the CJR model isn’t as simple to manage as the description implies. Step-by-step, a LEJR procedure may be consistent across practices, but the care providers and patients are not. The model doesn’t account for different protocols used by providers or patient risk factors outside the DRG (e.g., patients with multiple comorbidities or social factors such as living alone or living in a building with stairs). It assumes all patients will progress through the care journey as expected. It doesn’t account for case-mix or social determinants of health. As an added layer of complexity, providers don’t have visibility into their patient’s progress once they’ve left their care. This adds pressure to improve the coordination of care from the initial hospitalization through recovery, yet providers often don’t have the tools or the time to do so efficiently.

Still, there’s reason to believe the model is working to control costs while maintaining quality. An August 2018 report prepared for CMS revealed positive results in the first year of the CJR program. From April 1, 2016, to December 31, 2016, participants observed:

  • Average total payments for LEJR episodes decreased by $910 more (or 3.3% from CJR baseline payments) for CJR episodes relative to control group episodes.
  • Reduction in IRF/SNF PAC utilization.
  • Increase in discharges to home.
  • Average total payments for CJR episodes decreased by $1,127 more (3.9%) and $577 more (2.3%) than control episodes in MSAs with historically high and low episode payments, respectively.
    Quality of care was maintained.

Interviews with leaders from participating hospitals suggest more benefits to come from the program in the future. Participants felt positive the CJR model has or will significantly impact beneficiaries, care providers, and their hospitals by improving care delivery, access, and quality – noting that the primary impact of the CJR model comes from the efforts to improve continuity of care across episodes of care. The second major benefit cited is access to Medicare data they’d never had before; many participants did not have data on patients post-discharge or PAC use.

To capture the maximum value from the program, CJR participants are investing in technology to gain a more holistic understanding of their patients, improve care coordination, and enable real-time tracking of patient care journeys.

For example, after being entered into the CJR program, leaders at John Muir Health quickly realized their traditional labor-intensive methods of analysis would not be sufficient to monitor performance in the program. The team needed a solution to generate actionable insights to engage physicians to change behavior that would deliver both improved care and savings before the end of the first program year.

They chose to partner with Clarify to implement Care Prism, our analytics platform. Leading factors in the decision were the intuitive nature of the platform, its precise case-mix adjustment, and AI-generated insights, as well as the support provided by the Clarify clinical transformation and implementation team.

From the first login, John Muir Health had a detailed view of its operational and financial performance at the facility, individual physician, and affiliated partner (e.g., skilled nursing facility) level. The team was able to identify relevant variation and generated specific improvement insights while still cutting the time required to process data and generate reports by over 50%.

The analytics, insights, and support provided by Clarify enable the health system to:

  • Understand their performance
  • Effectively engage physicians
  • Make decisions more rapidly
  • Prioritize where to focus

Today, John Muir is ranked #1 in California and #4 in the US for CJR per patient bonus, proving that quality can go hand-in-hand with delivering more affordable care. This is particularly notable as they are one of the highest-volume total joint replacement (TJR) providers in the Pacific region, which happens to be one of the most resource-efficient regions in the United States.

For more information on the partnership between John Muir Health and Clarify, please read our case study. If you’d like to learn more about how Clarify can help drive success in CJR at your organization contact Benjamin Swails, [email protected].


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