To: Finance and Quality Staff at Selected Hospitals
From: Tom Evert, Chief Financial Officer
Carol Wagner, Senior Vice President, Patient Safety
This bulletin is intended to inform hospital Finance and Quality leaders about the Washington State Hospital Association’s (WSHA’s) resources available around the new proposal from the Centers for Medicare & Medicaid Services (CMS) on bundled payment for hip and knee replacements, known as Comprehensive Care for Joint Replacement (CCJR). The resources include data, a web conference, and staff to help answer questions.
CMS’s new proposal on bundled payment for hip and knee replacements will likely be applied beginning January 1, 2016. Very shortly, WSHA will provide impacted hospitals with a summary of the proposed rule and related data analyses.
This new proposal sets up a mandatory program for payment for these procedures in all hospitals in the metropolitan statistical areas (MSAs) selected by CMS. For these hospitals, CMS is proposing to adjust payments for lower extremity joint replacements based on cost and quality criteria. For Washington State, the selected MSAs include Snohomish, King, Pierce, and Clark Counties and include the following hospitals (assuming they perform hip and knee replacement surgery).
- Cascade Valley Hospital
- CHI Franciscan Health Highline Medical Center, St. Clare Hospital, St. Joseph Medical Center, St. Francis Hospital, and St. Anthony Hospital
- Evergreen Health, Evergreen Health Monroe
- Legacy Salmon Creek Medical Center
- MultiCare Good Samaritan Hospital, MultiCare Auburn Medical Center, MultiCare Tacoma General Allenmore Hospital
- Overlake Medical Center
- PeaceHealth Southwest Medical Center
- Providence Regional Medical Center Everett
- Swedish Edmonds, Swedish First Hill and Ballard, Swedish Cherry Hill, and Swedish Issaquah
- UW Medicine Northwest Hospital, University of Washington Medical Center, Harborview Medical Center, and Valley Medical Center
- Virginia Mason Medical Center
Unlike previous Medicare initiatives such as accountable care organizations and other bundled payment initiatives, participation is mandatory for the listed hospitals. The only exception is for hospitals already participating in Model 1 or Phase ll of Models 2 or 4 of the Bundled Payment for Care Improvement model for the lower extremity joint replacement clinical episode.
We encourage Quality and Finance staff at the hospitals listed above to familiarize themselves with the proposed initiative. The proposed rule was released July 9. Comments on the proposed rule are due to CMS by September 8. WSHA plans to submit comments, but we need member input. If you have comments you would like us to include in our comment letter, please get them to Andrew Busz (email@example.com) at WSHA by September 1.
WSHA Resources and Webinar
Through our decision support program at WSHA and our arrangement with DataGen, a division of the Healthcare Association of New York State, we will be providing hospitals with reports based on Medicare claims data that model the impact of the proposed rule on each of your facilities. The reports will show components of spending attributed to your hospital from hospital expense, physician expense, ancillary services, therapy and post-acute care. We anticipate sending your hospital’s report to you very soon. We will also be sending a summary of the proposed rule.
Also through our arrangement with DataGen, WSHA is making available for hospital members two identical webinars on the proposed rule. Registration is required, using the links below:
- “Medicare Mandatory Bundled Payment” Webinar on Wednesday, August 12 @ 1:00 p.m. PDT
- “Medicare Mandatory Bundled Payment” Webinar on Thursday, August 20 @ 1:00 pm PDT
Overview of the Proposed Rule
CMS released the proposed rule on July 9. At a high level, provisions of the proposed rule include the following:
- All providers will continue to be paid on a fee-for-service basis for care provided. Under the proposal, however, hospitals will have a retrospective incentive or penalty reconciliation adjustment made to their hospital payment based on the sum of Medicare payments to all the participating providers for an episode of care period of 90 days following the surgery.
- For the first year of the program, the adjustments will only result in additional payments.
- The adjustment for hospital payment will take into account quality and cost for lower extremity joint replacement episodes of care (as measured by Medicare fee-for-service payments). The cost calculations for the episodes will be triggered by Medicare fee-for-service hospitalizations for MS-DRG 469 (major joint replacement or reattachment of lower extremity with major complications or comorbidities) or MS-DRG 470 (major joint replacement or reattachment of lower extremity without major complications or comorbidities). Services measured include hospital services, physician services, ancillary services, therapy services and post-acute care including skilled nursing facilities (SNF) or other post-acute institutional care, and any other medical care related to the service.
- The quality measures used as metrics are from the Hospital Inpatient Quality Reporting Program, and no new data submissions beyond what are currently collected are needed. They are:
– 30–day hospital readmissions for total hip and total knee replacement
– Complications within 90 days of hospitalization
– Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey
Performance is required to be at least the 30th percentile of the national score in performance for the first three years and at least at the 40th percentile for years four and five.
For additional questions or suggestions on how we can help, contact the WSHA Staff listed above.