Medicare Program; Cancellation of Advancing Care Coordination Through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model: Extreme and Uncontrollable Circumstances Policy for the Comprehensive Care for Joint Replacement Payment Model, 57066-57104 [2017-25979]
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Centers for Medicare & Medicaid
Services
For questions related to the CJR
model: CJR@cms.hhs.gov.
For questions related to the EPMs:
EPMRULE@cms.hhs.gov.
SUPPLEMENTARY INFORMATION:
42 CFR Parts 510 and 512
I. Executive Summary and Background
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
A. Executive Summary
[CMS–5524–F and IFC]
RIN 0938–AT16
Medicare Program; Cancellation of
Advancing Care Coordination Through
Episode Payment and Cardiac
Rehabilitation Incentive Payment
Models; Changes to Comprehensive
Care for Joint Replacement Payment
Model: Extreme and Uncontrollable
Circumstances Policy for the
Comprehensive Care for Joint
Replacement Payment Model
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule; interim final rule
with comment period.
AGENCY:
This final rule cancels the
Episode Payment Models (EPMs) and
Cardiac Rehabilitation (CR) Incentive
Payment Model and rescinds the
regulations governing these models. It
also implements certain revisions to the
Comprehensive Care for Joint
Replacement (CJR) model, including:
Giving certain hospitals selected for
participation in the CJR model a onetime option to choose whether to
continue their participation in the
model; technical refinements and
clarifications for certain payment,
reconciliation and quality provisions;
and a change to increase the pool of
eligible clinicians that qualify as
affiliated practitioners under the
Advanced Alternative Payment Model
(Advanced APM) track. An interim final
rule with comment period is being
issued in conjunction with this final
rule in order to address the need for a
policy to provide some flexibility in the
determination of episode costs for
providers located in areas impacted by
extreme and uncontrollable
circumstances.
SUMMARY:
Effective Date: These final and
interim final regulations are effective on
January 1, 2018.
Comment Period: To be assured
consideration, comments on the interim
final rule with comment period
presented in section III. of this
document must be received at one of the
addresses provided in the ADDRESSES
section no later than 5 p.m. EST on
January 30, 2018.
FOR FURTHER INFORMATION CONTACT:
Nora Fleming, (410) 786–6908.
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DATES:
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1. Purpose
The purpose of this final rule is to
finalize our proposal to cancel the
Episode Payment Models (EPMs) and
the Cardiac Rehabilitation (CR)
Incentive Payment Model, established
by the Center for Medicare and
Medicaid Innovation (Innovation
Center) under the authority of section
1115A of the Social Security Act (the
Act) and to rescind the regulations at 42
CFR part 512. Additionally, this final
rule finalizes our proposal to make
participation voluntary for all hospitals
in approximately half of the geographic
areas selected for participation in the
Comprehensive Care for Joint
Replacement (CJR) model (33 of 67
Metropolitan Statistical Areas [MSAs]
selected; see 80 FR 73299 Table 4) and
for low-volume and rural hospitals in all
of the geographic areas selected for
participation in the CJR model,
beginning in performance year 3. It also
implements several technical
refinements and clarifications for
certain CJR model payment,
reconciliation, and quality provisions,
and finalizes our proposed change to the
criteria for the Affiliated Practitioner
List to broaden the CJR Advanced
Alternative Payment Model (Advanced
APM) track.
As stated in the proposed rule, we
note that reevaluation of policies and
programs, as well as revised rulemaking,
are within an agency’s discretion,
especially after a change in
Administration. The EPMs and the CR
Incentive Payment Model were designed
and implemented as mandatory
payment models via notice-andcomment rulemaking to test the effects
of bundling cardiac and orthopedic care.
The CJR model was also established as
a mandatory payment model via noticeand-comment rulemaking to test the
effects of bundling orthopedic episodes
involving lower extremity joint
replacements. The CJR model began on
April 1, 2016 and is currently in its
second performance year.
While we continue to believe that
cardiac and orthopedic episode models
offer opportunities to redesign care
processes and improve quality and care
coordination while lowering spending,
we determined after careful review that
it was necessary to propose to rescind
the regulations at 42 CFR part 512,
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which relate to the EPMs and CR
Incentive Payment Model, and reduce
the scope of the CJR model for the
following reasons. As stated in the
proposed rule, we believe that requiring
hospitals to participate in additional
episode payment models at this time is
not in the best interest of the Agency or
the affected providers. Many providers
are currently engaged in voluntary CMS
initiatives, and we expect to continue
offering initiatives, including episodebased payment models. Similarly, we
also believe that reducing the number of
providers required to participate in the
CJR model will allow us to continue to
evaluate its effects while limiting the
geographic reach of our current
mandatory models. As we mentioned in
the proposed rule, we considered
altering the design of the EPMs and the
CR Incentive Payment Model to allow
for voluntary participation and to take
into account other feedback on the
models. However, we noted that this
would potentially involve restructuring
the model design, payment
methodologies, financial arrangement
provisions, and/or quality measures,
and we did not believe that such
alterations would offer providers
enough time to prepare, given the
planned January 1, 2018 start date. In
addition, if at a later date we test these
or similar models, we would not expect
to implement them through rulemaking
if made voluntary but would employ the
methods used to implement other
voluntary models.
Finally, as stated in the proposed rule,
we believe that cancelling the EPMs and
CR Incentive Payment Model, as well as
altering the scope of the CJR model,
offers CMS flexibility to design and test
other episode-based payment models
while evaluating the ongoing CJR
model. The CJR model has been
operational for over a year and a half,
and we have begun to provide
participant hospitals initial financial
and quality results from the first
performance year. In many cases, CJR
participant hospitals have invested in
care redesign, and we want to recognize
such commitments to improvement
while reducing the number of hospitals
that are required to participate.
We sought public comment on the
proposals contained in the August 17,
2017 proposed rule (82 FR 39310
through 39333), and also on any
alternatives considered.
2. Summary of Costs and Benefits
In the proposed rule, we stated that
we did not anticipate that the
cancellation of the EPMs and CR
Incentive Payment Model prior to the
start of those models would have any
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costs to providers. As discussed in
section II.A. of this final rule and
interim final rule with comment period,
some commenters noted that providers
who assumed that the EPMs would
begin on January 1, 2018, had incurred
preparatory costs in terms of care
pathway redesign and the creation of
care coordinator positions. However, as
the commenters did not specifically
quantify these costs, we are unable to
estimate them here. As shown in our
impact analysis in section V. of this
final rule and interim final rule with
comment period, we estimate that the
CJR model changes will reduce the
previously projected CJR model savings
(82 FR 603) by a total of approximately
$108 million. Of the total projected
reduction in savings, $106 million is
attributable to CJR model changes over
the final three performance years while
approximately $2 million is attributable
to the extreme and uncontrollable
circumstance policy. Accordingly, we
estimate that the total CJR model impact
after the changes in this final rule will
be $189 million, instead of $294 million
($106 million less in savings), over the
remaining 3-year performance period
(2018 through 2020) of the CJR model.
Additionally, we estimate that the
financial impacts resulting from the
interim final rule with comment period
will be a further reduction in savings of
approximately $2 million during 2017,
noting that we are implementing the
extreme and uncontrollable
circumstances policy (via an interim
final rule with comment) in this rule for
the 2017 reconciliation that will occur
beginning in March of 2018. Our impact
analysis has some degree of uncertainty
and makes assumptions as discussed in
section V. of this final rule and interim
final rule with comment period. In
addition to these estimated impacts, as
with many of the Innovation Center
models, the goals that participants are
attempting to achieve include
improving overall quality of care,
enhancing participating provider
infrastructure to support better care
management, and reducing costs. We
anticipate there will continue to be a
broader focus on care coordination and
quality improvement through the CJR
model among hospitals and other
providers and suppliers within the
Medicare program that may lead to
better care management and improved
quality of care for beneficiaries.
3. Interim Final Rule Regarding
Significant Hardship Due to Extreme
and Uncontrollable Circumstances in
the CJR Model
We are issuing this interim final rule
with comment period in conjunction
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with this final rule in order to address
the need for a policy to provide some
flexibility in the determination of
episode costs for CJR hospitals located
in areas impacted by extreme and
uncontrollable circumstances.
Specifically, this policy would apply to
CJR hospitals located in a county,
parish, U.S. territory, or tribal
government designated in a major
disaster declaration under the Stafford
Act, if as a result of the same major
disaster the Secretary of Health and
Human Services (the Secretary)
authorized waivers under section 1135
of the Act.
B. Background
Under the authority of section 1115A
of the Act, through notice-and-comment
rulemaking, CMS’ Center for Medicare
and Medicaid Innovation (Innovation
Center) established the CJR model in a
final rule titled ‘‘Medicare Program;
Comprehensive Care for Joint
Replacement Payment Model for Acute
Care Hospitals Furnishing Lower
Extremity Joint Replacement Services’’
published in the November 24, 2015
Federal Register (80 FR 73274 through
73554) (referred to in this final rule as
the ‘‘CJR model final rule’’). We
established three new models for acute
myocardial infarction, coronary artery
bypass graft, and surgical hip/femur
fracture treatment episodes of care,
which are collectively called the
Episode Payment Models (EPMs),
created a Cardiac Rehabilitation
Incentive Payment Model (CR Incentive
Payment Model), and revised several
existing provisions for the CJR model, in
a final rule titled ‘‘Advancing Care
Coordination Through Episode Payment
Models (EPMs); Cardiac Rehabilitation
Incentive Payment Model; and Changes
to the Comprehensive Care for Joint
Replacement Model’’ published in the
January 3, 2017 Federal Register (82 FR
180) (referred to in this final rule as the
‘‘EPM final rule’’).
The effective date for most of the
provisions of the EPM final rule was
February 18, 2017, and in the EPM final
rule we specified an effective date of
July 1, 2017 for certain CJR model
regulatory changes intended to align
with a July 1, 2017 applicability, or
start, date for the EPMs and CR
Incentive Payment Model. On January
20, 2017, the Assistant to the President
and Chief of Staff issued a
memorandum titled ‘‘Regulatory Freeze
Pending Review’’ that instructed
Federal agencies to temporarily
postpone the effective date for 60 days
from the date of the memorandum for
regulations that had been published in
the Federal Register but had not taken
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effect, for purposes of reviewing the
rules and considering potentially
proposing further notice-and-comment
rulemaking. Accordingly, on February
17, 2017, we issued a final rule in the
Federal Register (82 FR 10961) to delay
until March 21, 2017 the effective date
of any provisions of the EPM final rule
that were to become effective on
February 18, 2017. We subsequently
issued an interim final rule with
comment (IFC) period in the Federal
Register on March 21, 2017 (referred to
in this final rule as the ‘‘March 21, 2017
IFC’’) (82 FR 14464). The March 21,
2017 IFC further delayed the effective
date of the provisions that were to take
effect March 21, 2017 until May 20,
2017, further delayed the applicability
date of the EPMs and CR Incentive
Payment Model provisions until
October 1, 2017, and further delayed the
effective date of the conforming CJR
model changes until October 1, 2017. In
the March 21, 2017 IFC, we also
solicited public comment on further
delaying the applicability date for the
EPMs and CR Incentive Payment Model
provisions, as well as the effective date
for the conforming changes to the CJR
model from October 1, 2017 until
January 1, 2018 to allow for additional
notice-and-comment rulemaking. Based
on the public comments we received in
response to the March 21, 2017 IFC, we
published a final rule (referred to in this
final rule as the ‘‘May 19, 2017 final
delay rule’’) on May 19, 2017 (82 FR
22895) to finalize a January 1, 2018
applicability date for the EPMs and CR
Incentive Payment Model provisions, as
well as to finalize a January 1, 2018
effective date for the conforming
changes to the CJR model (specifically
amending § 510.2; adding § 510.110;
amending § 510.120; amending
§ 510.405; amending § 510.410; revising
§ 510.500; revising § 510.505; adding
§ 510.506; and amending § 510.515).
Additional changes to the CJR model, in
accordance with the March 21, 2017
IFC, took effect May 20, 2017.
As we stated in the May 19, 2017 final
delay rule (82 FR 22897), we received a
number of comments on the models that
did not relate to the start date change.
These additional comments suggested
that we reconsider or revise various
model aspects, policies and design
components; in particular, many of
these comments suggested that we
should make participation in the models
voluntary instead of mandatory. We did
not respond to these comments in the
May 19, 2017 final delay rule, as the
comments were out of scope of that
rulemaking, but we stated that we might
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take them into consideration in future
rulemaking.
In the August 17, 2017 Federal
Register (82 FR 39310 through 39333),
we published a proposed rule that
proposed to cancel the EPMs and CR
Incentive Payment Model, and to
rescind the regulations governing these
models, as well as implement certain
revisions to the CJR model.
We received approximately 85 timely
pieces of correspondence containing
multiple comments in response to the
August 17, 2017 proposed rule. In the
following sections of this final rule and
interim final rule with comment period,
we discuss our specific proposals,
public comment, and our responses to
those comments.
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II. Provisions of the Proposed
Regulations and Analysis of and
Response to Public Comments
A. Cancellation of EPMs and Cardiac
Rehabilitation Incentive Payment Model
In the January 3, 2017 EPM final rule,
we established three bundled payment
models for acute myocardial infarction
(AMI), coronary artery bypass graft
(CABG), and surgical hip/femur fracture
treatment (SHFFT) episodes, and a
Cardiac Rehabilitation (CR) Incentive
Payment Model. These models were
similar to other Innovation Center
models and focused on complex cases
where we believe improvements in care
coordination and other care redesign
efforts offer the potential for improved
patient outcomes and more efficient
resource use. Many stakeholders,
including commenters responding to the
March 21, 2017 IFC, expressed concerns
about provider burden and challenges
these new models would present. We
noted in the May 19, 2017 final delay
rule (82 FR 22896), which finalized a
January 1, 2018 start date for the EPMs
and the CR Incentive Payment Model,
that we would engage in notice-andcomment rulemaking on these models if
warranted. We also noted that we
received 47 submissions in response to
the March 21, 2017 IFC. These
responses contained a mix of in- and
out-of-scope comments (82 FR 22899).
In the May 19, 2017 final delay rule (82
FR 22897), we noted that in addition to
commenting on the change to the
effective date for the EPMs and CR
Incentive Payment Model and certain
provisions of the CJR model,
commenters highlighted concerns with
the models’ design, including but not
limited to: Participation requirements,
data, pricing, quality measures, episode
length, CR and skilled nursing facility
(SNF) waivers, beneficiary exclusions
and notification requirements,
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repayment, coding, and model overlap
issues. Specifically, many commenters
were opposed to the mandatory
participation requirements, arguing that
these models would force many
providers who lack familiarity,
experience, or proper infrastructure to
quickly support care redesign efforts for
a new bundled payment system. Many
commenters were concerned that these
mandatory models might harm patients
and providers before CMS knows how
these models might affect access to care,
quality, or outcomes. Additionally,
commenters were concerned that
unrelated services would be
incorporated into episode prices under
the finalized price-setting methodology,
in which we base prices on MS–DRGs
and use clinical review to identify
excluded, unrelated services rather than
identifying included, related services.
Commenters also expressed concern
that this pricing approach would result
in diagnosis codes classifying certain
services as included, when in fact these
services have no clinical relevance to
the episode(s). Commenters were further
concerned with the fact that CMS would
progressively incorporate regional data
into EPM target prices, where 100
percent of the EPM target price would
be based on regional data by
performance year 4. Commenters also
took issue with the quality measures
established for the SHFFT model,
stating that these measures are not
clinically related to the target
population and are inappropriate for use
in assessing the care provided to
beneficiaries in the SHFFT model. In
addition, commenters requested
revisions to the CABG EPM to allow
participants the option to use a CABG
composite score developed by the
Society of Thoracic Surgeons (STS)
rather than the all-cause mortality
measure.
Commenters also expressed concerns
about the design of the CR Incentive
Payment Model waivers. Commenters
stated that current direct supervision
requirements would continue to
contribute to a lack of access to cardiac
rehabilitation services and would
inhibit providers’ ability to redesign
care for the CR Incentive Payment
Model. Commenters suggested
broadening the CR physician
supervision waiver because the current
waivers would not cover non-model
beneficiaries who might be obtaining
services concurrently with model
participants and are therefore not
sufficient. Other commenters were
concerned with the precedence rules for
model overlap with Models 2, 3 and 4
of the Innovation Center’s Bundled
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Payments for Care Improvement (BPCI)
initiative.
In the May 19, 2017 final delay rule
(82 FR 22895), we stated that we might
consider these public comments in
future rulemaking. Based on our
additional review and consideration of
this stakeholder feedback, we concluded
that certain aspects of the design of the
EPMs and the CR Incentive Payment
Model should be improved and more
fully developed prior to the start of the
models, and that moving forward with
the implementation of the EPMs and CR
Incentive Payment Model as put forth in
the January 3, 2017 EPM final rule
would not be in the best interest of
beneficiaries or providers at this time.
Based on our acknowledgment of the
many concerns about the design of these
models articulated by stakeholders, we
proposed to cancel the EPMs and CR
Incentive Payment Model before they
began. Accordingly, we proposed to
rescind 42 CFR part 512 in its entirety.
We sought public comment on our
proposal to cancel the EPMs and CR
Incentive Payment Model.
We noted that, if the proposal to
cancel the EPMs and CR Incentive
Payment Model was finalized, providers
interested in participating in bundled
payment models would still have an
opportunity to do so during calendar
year (CY) 2018 via new bundled
payment models. The Innovation Center
expects to develop new bundled
payment model(s) during CY 2018 that
would be designed to meet the criteria
to be an Advanced APM. We also noted
the strong evidence base and other
positive stakeholder feedback that we
have received regarding the CR
Incentive Payment Model. As we further
develop the Innovation Center’s
portfolio of models, we may revisit this
model and if we do, we will consider
stakeholder feedback.
Comment: The majority of
commenters supported cancellation of
the EPMs, although many of these
commenters noted that they support the
general shift toward value-based
payment models. Many of these
commenters noted they supported
deregulation in general and supported
CMS’ efforts to ease the administrative
burden of mandatory models, voicing
concern that mandatory models unduly
burden hospitals who may be
unprepared for model participation and
compromise patient access and quality
of care delivery. Other commenters
stated that mandatory models
disadvantage inexperienced or underresourced providers, and are too
complex. Commenters argued these
providers, many of whom are smaller
hospitals or systems, face logistical and
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practical challenges that would be
exacerbated by comparing all providers,
and their varying levels of resources, to
one another through a mandatory
initiative. Commenters also argued that
providers need models with greater
flexibility, support, and incentives.
Several commenters supporting the
cancellation of the EPMs stated that
mandatory models fail to solicit and
incorporate stakeholder feedback, and
that CMS moved too quickly in
finalizing the EPMs. Commenters stated
that the models should be improved and
more fully developed prior to the start
of the models. Commenters highlighted
concerns with many aspects of the
models’ design, including: Participation
requirements; episode selection; data;
pricing, especially the movement to
regional pricing under the models;
quality measures used in the models,
especially for the CABG and SHFFT
models; episode length; clinical
homogeneity (or lack thereof) of the
included patient population; episode
inclusions and exclusions; CR and
skilled nursing facility (SNF) waivers;
beneficiary exclusions and notification
requirements; reconciliation and
repayment policies; and model overlap
issues that impact providers already
participating in APMs or other
programs. Commenters also stated that
there is insufficient evidence and
evaluation of the efficacy of mandatory
bundled payment models. They stated
that the EPMs were not built upon the
success of existing cardiac models, and
that CMS should use this opportunity to
gather broad stakeholder feedback.
Response: We thank commenters for
their support for our proposal to cancel
the EPMs. We agree with commenters’
assertions that we should reduce
provider burden when warranted, while
maintaining the ability for providers to
participate in future opportunities that
shift towards value-based payment
models. We continue to believe it is
important to test and evaluate the effects
of episode payment approaches on a
broad range of Medicare providers.
However, we agree with commenters
that the design of the specific EPMs we
are cancelling in this final rule and
interim final rule with comment period
should be further studied and refined,
and we also agree with commenters that
seeking additional stakeholder input in
future model design is important. We
note that in the recent Request for
Information (posted on the CMS Web
site at https://innovation.cms.gov/Files/
x/newdirection-rfi.pdf), CMS solicited
comments through November 20, 2017
on suggestions for a new direction for
the Innovation Center. CMS will
carefully evaluate any input received
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regarding future models and the design
of these models.
Comment: Several commenters
contended that CMS lacks the authority
to mandate participation in Innovation
Center models. Commenters stated they
do not believe that section 1115A of the
Act provides CMS with the authority to
mandate provider and supplier
participation in Innovation Center
models. These commenters stated that
mandatory provider and supplier
participation in models runs counter to
both the letter and spirit of the law that
established the Innovation Center,
including the scope of its authority to
test models under section 1115A of the
Act and the directive to make
recommendations to Congress set forth
in section 1115A(g) of the Act. A
commenter argued that the EPMs are a
prohibited expansion in scope of the
CJR model.
Response: We disagree that the
Innovation Center lacks the authority to
test mandatory models under section
1115A of the Act. Section 1115A of the
Act authorizes the Secretary to test
innovative payment and service
delivery models to reduce program
expenditures while preserving or
enhancing the quality of care furnished
to Medicare, Medicaid, and Children’s
Health Insurance Program (CHIP)
beneficiaries. Section 1115A of the Act
does not specify that participation in
models must be voluntary. Moreover,
the Secretary has authority to establish
regulations to carry out the
administration of Medicare.
Specifically, the Secretary has authority
under both sections 1102 and 1871 of
the Act to implement regulations as
necessary to administer Medicare,
including testing these Medicare
payment and service delivery models.
However, as we discuss later in this
section, the Innovation Center will
approach new model design with a
focus on reducing provider burden.
Finally, we disagree that the EPMs were
an expansion of CJR. The SHFFT Model
was designed as a separate and distinct
model from the CJR model, utilizing
different MS–DRGs.
Comment: Some commenters noted
that the movement away from
mandatory models represents a change
in priorities from the previous
administration. They acknowledged this
change in preference from mandatory to
voluntary model design but questioned
that CMS continue to work toward
achieving the goals of bundled payment
models. They stated their desire to see
CMS strike the best balance possible
between reducing provider burden and
incentivizing health system change that
will allow for broad opportunities for
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57069
Advanced APM participation beginning
in CY 2018. A commenter noted that
easing the regulatory burden on health
systems and continuing the transition
into value-based care need not be
mutually exclusive goals.
Response: We agree with the
commenter that easing regulatory
burden on health systems and
continuing the transition into valuebased care are not mutually exclusive
goals. As we noted in section I. of this
final rule and interim final rule with
comment period, review and
reevaluation of policies and programs,
as well as revised rulemaking, are
within an agency’s discretion, and that
discretion is often exercised after a
change in administration occurs. CMS is
setting a new direction for the
Innovation Center to promote patientcentered care and test market-driven
reforms that empower beneficiaries as
consumers, provide price transparency,
increase choices and competition to
drive quality, reduce costs, and improve
outcomes. We note that in the recent
Request for Information (posted on the
CMS Web site at https://
innovation.cms.gov/Files/x/
newdirection-rfi.pdf), CMS solicited
comments through November 20, 2017
on suggestions for a new direction for
the Innovation Center. As stated in the
RFI, CMS believes that while existing
partnerships with healthcare providers,
clinicians, states, payers and
stakeholders have generated important
value and lessons, CMS is setting a new
direction for the Innovation Center. New
models will be designed to reduce
burdensome requirements and
unnecessary regulations to the extent
possible to allow physicians and other
providers to focus on providing highquality healthcare to their patients. We
appreciate the commenters’
understanding of this change in
priorities, and we reiterate CMS’s
commitment to developing models that
reward value-based care and allow
opportunities for Advanced APM
participation for 2018 and future years.
Comment: Multiple commenters
expressed concern that the cancellation
of the EPMs will signal to the
innovation community (that is, those
who invest valuable resources into the
development of new technologies and
systems with the goal of transforming
healthcare delivery) that healthcare
payment policy is subject to the
uncertainty of ad hoc reversal of
transformative initiatives, thus stifling
further innovation efforts. A commenter
stated that cancellation of the EPMs will
send signals that will slow the
transformation of healthcare and
confuse providers regarding the urgency
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of system change from FFS to valuebased payment. Another commenter
stated that requiring providers to adapt
to innovative, value-based payment
models is preferable to reinforcing
current, financially unsustainable
payment models that incentivize the
delivery of services without
consideration for their cost, quality, and
outcomes.
Response: We acknowledge the
commenters’ concerns about the signals
that cancellation of the EPMs could
send regarding our commitment to
moving away from FFS toward valuebased payment. We reiterate that CMS
continues to explore new models to
incentivize innovation and value-based
payment and is committed to
innovations that will foster an
affordable, accessible healthcare system
that puts patients first.
Comment: Many commenters objected
to the outright cancellation of EPMs and
stated that the models should be offered
on a voluntary basis. These commenters
expressed concern about the precedent
established by the cancellation of a
planned model after health systems
have expended significant time and
resources to prepare for participation in
the initiative, and asserted that, without
offering the option of voluntary
participation, we would disadvantage
health systems that had already made
substantial investments in care redesign
in anticipation of participating in EPMs,
as this would not provide opportunity
for return on those investments.
Specifically, several commenters noted
that since the finalization of the EPMs,
providers have invested considerable
time and funding in developing the
necessary programs, processes,
infrastructure and financial
relationships in preparation for these
programs. Commenters stated that while
there may be limited or minimal
additional costs required going forward
with the cancellation of these models, it
is worth nothing that significant
investment was made by various
stakeholders in preparation for them,
particularly as they had been finalized
by CMS. Multiple commenters stated
that, since the finalization of the rule
implementing EPMs, their health
systems have already made significant
investments and expended resources on
care redesign to meet the payment
models’ requirements. While these
commenters did not quantify the cost of
these investments they noted that the
investments included hiring care
coordinators, re-engineering the process
for admission from the Emergency
Department for hip and femur fractures,
and improving communication between
their health system’s regional hospitals
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and its main hospital, such that
innovations in efficient and effective
care coordination are already emerging
from this implementation process. One
commenter further stated that
preparation for implementing the
models resulted in a culture shift within
their organization, especially with
respect to communication and
coordination between providers.
Another commenter stated the time
clinicians spent preparing for these
models is ultimately a loss for patient
care.
Response: We appreciate the
commenters’ support for voluntary
versions of the EPMs. However, in
reviewing the other comments received
in support of the cancellation due to
concerns with multiple aspects of the
models, we continue to believe that
there would not be enough time to
sufficiently revise the models given the
planned January 1, 2018 start date and
that implementing these models as
originally designed would not be in the
best interest of beneficiaries or
providers. We thank the commenters for
their submissions noting that providers
have invested in infrastructure,
increased staffing, and care redesign in
response to the mandatory nature of the
EPMs. We appreciate these initiatives
taken by hospitals selected for the EPMs
and thank them for bringing these
actions to our attention. We note that
commenters did not provide enough
detail about the hiring status or
educational and licensing requirements
of any care coordinator positions they
may have created and filled (that is, full
or part-time, Registered Nurse or nonRegistered Nurse, scope of work, etc.)
for us to quantify an economic impact
for these case coordination investments.
Likewise investments in re-engineering
of processes and communication
systems were not quantified and thus
preclude us from attempting to estimate
a dollar value impact. We believe that
these investments and preparations will
position providers for successful
participation in future initiatives that
may provide opportunities for return on
these investments. Further we believe
hospitals that made preparations,
especially those that have created new
care coordinator positions that they
intend to keep staffed and those that
have implemented process
improvements that they intend to keep
in place, are likely to provide enhanced
patient care by improving the efficiency
and quality of care for Medicare
beneficiaries and improving the
coordination of care from the initial
hospitalization through recovery, rather
than reverting to previous practices that
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may not have placed as much emphasis
on efficiency, quality, and care
coordination. As we remain committed
to moving toward value-based payment,
we believe that investments in care
coordination and quality improvement
will ultimately benefit both providers
and patients.
Comment: Some commenters stated
their opposition to the cancellation of
EPM models and stated that they should
be implemented as mandatory models.
A commenter stated the belief that
providers would have adapted to the
models and beneficiaries’ access to care
would not have been affected, and
suggested that, rather than cancelling
the models, CMS should further delay
the start date to allow providers more
time to prepare for implementation of
the models. Other commenters noted
that mandatory models, compared to
voluntary models, create a more reliable
experiment with the ability to generate
evidence of bundled payments’
effectiveness, and they increase the
chances of bringing bundled payments
to scale nationally. Another commenter
stated that they support mandatory
models because they are necessary to
eliminate the ‘‘pilot program’’ mentality
of providers. A commenter noted that
voluntary models provide opportunities
for gaming. Another commenter asserted
that the rationale used by CMS to
rescind the EPMs is flawed and
contradicts statements outlined in the
EPM final rule. This commenter further
stated that, while there will always be
innovators who will participate in
voluntary models and guide their peers
in systematic improvements leading to
changes in overall healthcare delivery,
non-participant providers have been
reluctant to accept a change in their
clinical practice and as a result have not
demonstrated the clinical improvement
that others have seen, due to the lack of
a mandate for change. This commenter
expressed concern that without
mandatory models, improvement will
not remain consistent and there will
likely be a reversion to ‘‘the norm.’’
Another commenter stated their
opposition to the cancellation of EPMs
and their belief that mandatory models
should be implemented more broadly.
This commenter further stated their
belief that the cancellation of EPMs
represents an attempt to delay the move
to value-based reimbursement and
maintain the FFS reimbursement model,
which will benefit the financial interests
of healthcare companies at the expense
of the well-being and economic interests
of the healthcare consumer and
American taxpayer. Another commenter
similarly stated their opposition to the
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cancellation of EPMs based on their
concern about the long term fiscal
solvency of Medicare.
Response: We appreciate the
commenters pointing out some of the
specific benefits of mandatory, as
opposed to voluntary, models. We agree
generally that mandatory models have
certain advantages over voluntary
models, and we have had to weigh those
advantages against our goals of
minimizing provider burden at this time
and against the design-related concerns
raised by stakeholders for these specific
EPM and CR Incentive Payment Models.
Furthermore, although we monitor
provider behavior to be sure that
hospitals’ implementation strategies are
in compliance with the CJR model and
other Medicare requirements, and to
identify individual providers that merit
additional investigation, educational
outreach, or referral to program integrity
contractors, cancelling the EPMs will
provide more time to fully evaluate the
impact of CJR.
However, we take seriously the
commenters’ concerns about the
urgency of continuing our movement
toward value-based care in order to
accommodate an aging population with
increasing levels of chronic conditions,
while also acting as responsible
stewards of the Medicare Trust Funds.
We continue to believe that value-based
payment methodologies will play an
essential role in lowering costs and
improving quality of care, which will be
necessary in order to maintain
Medicare’s fiscal solvency. At this time,
we believe that focusing on the
development of different bundled
payment models and engaging more
providers in these models is the best
way to drive health system change
while minimizing provider burden and
maintaining patient access to care.
Comment: We received many
comments in support of our proposal to
cancel the CR Incentive Payment model.
Commenters supporting our proposal to
cancel the CR Incentive Payment Model
lauded the decelerated implementation
of mandatory models and noted that the
mandatory CR Incentive Payment Model
would have created additional undue
administrative burden for providers.
Many of these commenters suggested
that the CR Incentive Payment Model
would strain hospitals’ limited
resources, leading to decreased access to
care or quality of care.
Response: We appreciate some
commenters’ support of our proposal to
cancel the mandatory CR Incentive
Payment Model. We agree with the
commenters that it is important to
lessen provider burden where we can.
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Comment: Several commenters
opposed CMS’ proposal to cancel the CR
Incentive Payment Model. These
commenters stated that they saw the CR
Incentive Payment Model as an
important step toward value-based
payments and that cancelling the CR
Incentive Payment Model would result
in a missed opportunity to collect
evidence. Commenters opposing the
cancellations also cited the financial
investments providers made in
preparation for the model. Some of
these commenters felt that a mandatory
cardiac model would force otherwisehesitant providers to focus on enhanced
care management, improved
infrastructure, and cost reduction.
Several commenters cited evidence of
the effectiveness of cardiac
rehabilitation and its relatively low
utilization levels as support for
continuing the model, stating that it
would be an effective test with or
without concurrent EPM
implementation. A commenter stated
that implementing the CR Incentive
Payment Model alone would provide
independent testing of its effects, and
some commenters requested that the
model continue as a limited pilot.
Response: We thank commenters for
their input and note that we agree with
the premise cited by commenters that
the CR Incentive Payment Model could
provide an opportunity to collect
evidence and may support provision of
an under-utilized yet effective
intervention. However, we believe that
the nature of the CR Incentive Payment
Model does not permit sufficient
provider choice and our intention in
removing this mandatory model at this
time is to enhance providers’ ability to
determine the models and initiatives
that suit their organizations while
increasing quality and value-based
payments. Additionally, we note the
obstacles presented by the cancellation
of the cardiac EPMs and conforming
regulations with which this model is
aligned. Due to the manner in which the
regulations guiding the cardiac EPMs
were interwoven with those of the CR
Incentive Payment Model, we do not
believe it would be feasible to continue
the mandatory CR Incentive Payment
Model alone at this time since we are
cancelling the EPMs and rescinding all
of the associated regulations. However,
as we stated in the proposed rule, as we
further develop the Innovation Center’s
portfolio of models, we may revisit the
concept of a model with a focus on
cardiac rehabilitation and, if we do, will
consider stakeholder feedback.
Comment: Many commenters stated
that the CR Incentive Payment Model
required improvements prior to
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implementation, including many who
requested that it continue as a voluntary
model. A few requested that we solicit
more stakeholder feedback throughout
model development, while others
requested altered or new model waivers.
Many commenters supporting
cancellation of the CR Incentive
Payment Model recommended that any
potential future iterations of the model
should be separate from other APMs. A
commenter asserted that the CR
Incentive Payment Model could be
effective without incentivizing such a
high number of CR or intensive cardiac
rehabilitation (ICR) services. Another
commenter recommended allowing
shared financial arrangements among
CR programs.
Response: We thank commenters for
suggested improvements to the CR
Incentive Payment Model, and would
consider this input for any future
cardiac rehabilitation models.
Comment: Many commenters
encouraged CMS to expedite the
introduction of the new voluntary
bundled payment models that would
meet the criteria to be Advanced APMs.
Commenters noted making new
voluntary models available as soon as
possible will allow hospitals to
capitalize on the preparations they
made in anticipation of the EPMs and
will also allow them to partner with
clinicians to provide better quality,
more efficient care. Commenters are
concerned that the ambiguity
surrounding the future of EPMs has
posed challenges for hospitals
attempting to determine where and how
to invest in implementation.
Commenters supported the
development of new models that meet
the Advanced APM definition under the
Quality Payment Program and urged
CMS to build upon the lessons learned
in the Bundled Payments for Care
Improvement (BPCI) initiative. A
commenter urged CMS to align
advancements included in the CJR and
EPM models into a new bundled
payment model. A commenter
recommended that CMS ensure that a
voluntary model is available when the
current BPCI initiative expires. Several
commenters urged CMS to implement
new voluntary models before the
proposed voluntary election period for
CJR (January 1–January 31, 2018) to give
these providers as well as BPCI
participants adequate time to prepare
for future models. Commenters
suggested that in the alternative, CMS
should implement new voluntary
models prior to BPCI’s conclusion in
September 2018. A commenter urged
CMS to limit the size and scope of
future models and ensure open and
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transparent communication with
stakeholders during model
development. Commenters suggested
that CMS should release data on
baselines and targets in advance of a
model’s application deadline to allow
entities to prepare for the most
appropriate models. Commenters
encouraged CMS to initiate
collaborative process between CMS,
providers and other stakeholders as they
stated this would result in more robust
and effective models.
Response: We note providers’ interest
in future bundled payment models that
meet the criteria to be an Advanced
APM and are considering options for
developing such models.
Comment: Numerous commenters
suggested changes to the overall design
of the EPMs, CR Incentive Payment
Model, BPCI initiative, and CJR model
that were outside of the scope of the
August 17, 2017 proposed rule. These
comments touched on model
participation requirements, data,
pricing, choice of quality measures
used, episode length, CR and SNF
waivers, beneficiary exclusions and
notification requirements, repayment,
coding, model overlap issues, and the
inclusion of depression screening in
models. Additionally we received
public comments suggesting alternative
model proposals that include physicianbased, outcome-based, procedure-based,
specialty-based, and Medicare
Advantage APMs. Commenters
recommended that the CJR model and
future models provide more
collaboration opportunities and offer
broader waivers of fraud and abuse
laws, such as the physician self-referral
law commonly known as the ‘‘Stark
Law,’’ and the Anti-Kickback statute.
Several commenters stated that the
‘‘Stark Law,’’ which they contend has
not been updated statutorily for over 2
decades, is challenging to work through
when developing financial
arrangements, as small, unintentional
technical errors on the part of
physicians or staff could lead to heavy
penalties under this strict liability
statute, and that the cost of compliance
and disclosure can be prohibitive to
small and medium practices who would
otherwise want to participate in new
models. Commenters encouraged data
transparency and access to substance
abuse claims, an APM Ombudsman,
differing episode durations, a uniform
model overlap policy, use of care
coordinators, pricing and reconciliation
modifications, different quality
measures, and clarification of certified
electronic health record technology
(CEHRT) requirements.
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Response: We consider these public
comments to be outside of the scope of
the August 17, 2017 proposed rule; and
therefore, we are not addressing them in
this final rule and interim final rule
with comment period. We may consider
these public comments in future
rulemaking.
Summary of Final Decisions: We are
finalizing our proposal to cancel the
Episode Payment Models (EPMs) and
Cardiac Rehabilitation (CR) Incentive
Payment Model and to rescind the
regulations at 42 CFR part 512.
B. Changes to the CJR Model
Participation Requirements
1. Voluntary Participation Election (OptIn) for Certain MSAs and Low-Volume
and Rural Hospitals
The CJR model began on April 1,
2016. The model is currently nearing
completion of the second performance
year, which includes episodes ending
on or after January 1, 2017 and on or
before December 31, 2017. The third
performance year, which includes all
CJR episodes ending on or after January
1, 2018 and on or before December 31,
2018, would necessarily incorporate
episodes beginning before January 2018.
The fifth performance year will end on
December 31, 2020. Currently, with
limited exceptions, hospitals located in
the 67 geographic areas selected for
participation in the CJR model must
participate in the model through
December 31, 2020; that is, their
participation in the CJR model is
mandatory unless the hospital is an
episode initiator for a lower-extremity
joint replacement (LEJR) episode in the
risk-bearing period of Models 2 or 4 of
the BPCI initiative. Hospitals with a
CCN primary address in one of the 67
selected geographic areas selected for
CJR that participated in Model 1 of the
BPCI initiative, which ended on
December 31, 2016, began participating
in the CJR model when their
participation in the BPCI initiative
ended.
Based on smaller, voluntary tests of
episode-based payment models and
demonstrations, such as the Acute Care
Episode (ACE) demonstration and the
BPCI initiative, that have indicated a
potential to improve beneficiaries’ care
while reducing costs (see ACE
evaluation at: https://
downloads.cms.gov/files/cmmi/aceevaluationreport-final-5-2-14.pdf and
BPCI evaluation at: https://
innovation.cms.gov/Files/reports/BPCIEvalRpt1.pdf), we finalized the CJR
model with mandatory participation in
the 67 selected geographic areas so that
we could further test delivery of better
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care at a lower cost across a wide range
of hospitals, including some hospitals
that might not otherwise participate, in
many locations across the country. In
the CJR model final rule (80 FR 73276),
we stated that we believed that by
requiring the participation of a large
number of hospitals with diverse
characteristics, the CJR model would
result in a robust data set for evaluation
of this bundled payment approach, and
would stimulate the rapid development
of new evidence-based knowledge.
Testing the model in this manner would
also allow us to learn more about
patterns of inefficient utilization of
healthcare services and how to
incentivize the improvement of quality
for common LEJR procedure episodes.
After further consideration of
stakeholder feedback, including
responses we received on the March 21,
2017 IFC, we proposed certain revisions
to the mandatory participation
requirements for the CJR model to allow
us to continue to evaluate the effects of
the model while limiting the geographic
reach of our current mandatory models.
Specifically, we proposed that the CJR
model would continue on a mandatory
basis in approximately half of the
selected geographic areas (that is, 34 of
the 67 selected geographic areas), with
an exception for low-volume and rural
hospitals, and continue on a voluntary
basis in the other areas (that is, 33 of the
67 selected geographic areas).
The geographic areas for the CJR
model are certain Metropolitan
Statistical Areas (MSAs) that were
selected following the requirements in
§ 510.105 as discussed in the CJR model
final rule (80 FR 73297 through 73299).
In § 510.2, an MSA is defined as a corebased statistical area associated with at
least one urbanized area that has a
population of at least 50,000. In
selecting the 67 MSAs for inclusion in
the CJR model, the 196 eligible MSAs
were stratified into 8 groups based on
MSA average wage adjusted historic
LEJR episode payments and MSA
population size (80 FR 41207).
Specifically, we classified MSAs
according to their average LEJR episode
payment into four categories based on
the 25th, 50th and 75th percentiles of
the distribution of the 196 potentially
selectable MSAs as determined in the
exclusion rules as applied in the CJR
model proposed rule (80 FR 41198).
This approach ranked the MSAs relative
to one another and created four equally
sized groups of 49. The population
distribution was divided at the median
point for the MSAs eligible for potential
selection, creating 8 groups. Of the 196
eligible MSAs, we chose 67 MSAs via a
stratified random selection process as
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discussed in the CJR model final rule
(80 FR 73291).
In reviewing our discussion of the
MSA selection and the MSA volume
needed to provide adequate statistical
power to evaluate the impact of the
model in the CJR model final rule (80
FR 73297), we determined that reducing
the mandatory MSA volume in half by
selecting the 34 MSAs with the highest
average wage-adjusted historic LEJR
episode payments for continued
mandatory participation could allow us
to evaluate the effects of the CJR model
across a wide range of providers,
including some that might not otherwise
participate in the model. Higher
payment areas are most likely to have
significant room for improvement in
creating efficiencies and greater
variations in practice patterns. Thus, the
selection of more expensive MSAs was
the most appropriate approach to
fulfilling the overall priorities of the CJR
model to increase efficiencies and
savings for LEJR episodes while
maintaining or improving the overall
quality of care.
The original determination of the
sample size need in the CJR model final
rule was constructed to be able to
observe a 2-percent reduction in wageadjusted episode spending after 1 year.
This amount was chosen based on the
anticipated amount of the discount
applied in the target price. In
considering the degree of certainty that
would be needed to generate reliable
statistical estimates, we assumed a 20percent chance of false positive and a
30-percent chance of a false negative.
Using these parameters, we determined
that the number of MSAs needed ranged
from 50 to 150. In order to allow for
some degree of flexibility, we selected
75 MSAs, which were narrowed to 67
due to final exclusion criteria.
As we reviewed the CJR model for the
August 17, 2017 proposed rule, we
noted that, excluding quarterly
reconciliation amounts, evaluation
results from BPCI Model 2 indicated
possible reductions in fee-for-service
spending of approximately 3 percent on
orthopedic surgery episodes for
hospitals participating in the LEJR
episode bundle (https://
innovation.cms.gov/Files/reports/bpcimodels2-4-yr2evalrpt.pdf). We
examined the sample size needed to
detect a 3-percent reduction in CJR
model episode spending after 1 year
using the same methodology as
described in the CJR model final rule.
We determined that we would be able
to meet this standard with 34 MSAs
from the higher cost groups. We noted
that we expect that hospitals in the
higher cost MSAs will be able to achieve
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similar 3-percent savings given their
MSA’s relatively high historic episode
spending and thus greater opportunities
for improvements, and their experience
over the first 2 performance years of the
CJR model. We noted that the proposed
changes to the model, including the
focus on higher cost MSAs and the
reduced number of mandatory MSAs,
would cause changes to the nature of
the evaluation.
To select the 34 MSAs that would
continue to have mandatory
participation (except for low-volume
and rural hospitals), we took the
distribution of average wage-adjusted
historic LEJR episode payments for the
67 MSAs using the definition described
in the CJR model final rule, ordered
them sequentially by average wageadjusted historic LEJR episode
payments, and then selected the 34
MSAs with the highest average
payments. We noted that under the
proposal to reduce the number of MSAs
with mandatory participation, the
remaining 33 MSAs would no longer be
subject to the CJR model’s mandatory
participation requirements; that is,
hospital participation would be
voluntary in these 33 MSAs.
After dividing the 67 MSAs into 34
mandatory and 33 voluntary MSAs as
described previously, we examined
selected MSA characteristics. In order to
determine whether a good balance was
maintained across MSA population size,
we examined the number of MSAs
below and above the median population
point of the 196 MSAs eligible for
potential selection. We observed that a
good balance of MSA population size
was maintained (17 out of 34 mandatory
and 17 out of 33 voluntary MSAs had
a population above the median
population). While the 34 MSAs that
would continue to have mandatory
participation have higher spending on
average, these MSAs all include
providers with average cost episodes in
addition to providers with high cost
episodes. In general, we noted that
hospitals located in higher cost areas
have a greater potential to demonstrate
significant decreases in episode
spending. However, within the higher
cost MSAs, there was still significant
variation in characteristics and
experiences of the included hospitals.
We anticipated that the evaluation
would be able to assess the
generalizability of the findings of the
CJR model by examining variations of
performance within the participating
hospitals that represent a wide range of
hospital and market characteristics.
Therefore, we proposed that the CJR
model would have 34 mandatory
participation MSAs (identified in Table
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1) and 33 voluntary participation MSAs
(identified in Table 2) for performance
years 3, 4, and 5.
Specifically, we proposed that, unless
an exclusion in § 510.100(b) applies
(that is, for certain hospitals that
participate in the BPCI initiative),
participant hospitals in the proposed 34
mandatory participation MSAs that are
not low-volume or rural (as defined in
§ 510.2 and discussed in the following
paragraphs) would continue to be
required to participate in the CJR model.
We also proposed that hospitals in the
proposed 33 voluntary participation
MSAs and hospitals that are lowvolume or rural (as defined in § 510.2
and discussed in the following
paragraphs) would have a one-time
opportunity to notify CMS, in the form
and manner specified by CMS, of their
election to continue their participation
in the CJR model on a voluntary basis
(opt-in) for performance years 3, 4, and
5. We noted that hospitals that choose
to participate in the CJR model and
make a participation election that
complies with proposed § 510.115
would be subject to all model
requirements. Hospitals in the proposed
33 voluntary participation MSAs and
low-volume and rural hospitals (as
defined in § 510.2 and discussed in the
following paragraphs) that do not make
a participation election would be
withdrawn from the CJR model as
described later in this section of this
final rule and interim final rule with
comment period.
We proposed to exclude and
automatically withdraw low-volume
hospitals in the proposed 34 mandatory
participation MSAs, as identified by
CMS (see Table 3), from participation in
the CJR model effective February 1,
2018. Since some low-volume hospitals
may want to continue their participation
in the CJR model, we proposed to allow
low-volume hospitals to make a onetime, voluntary participation election
that complies with the proposed
§ 510.115 in order for the low-volume
hospital to continue its participation in
the CJR model. We proposed to define
a low-volume hospital in § 510.2 as a
hospital identified by CMS as having
fewer than 20 LEJR episodes in total
across the 3 historical years of data used
to calculate the performance year 1 CJR
episode target prices. Note that under
this definition, all hospitals listed in
Table 3 would meet the definition of a
low-volume hospital, but this list would
not be inclusive of all hospitals that
could be identified by CMS as a lowvolume hospital. For example, a new
hospital (with a new CCN) that opens in
a mandatory MSA during the remaining
years of the CJR model would not have
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any LEJR episodes during the historical
years of data used to calculate the
performance year 1 CJR episode target
prices. Under our proposal, we intended
that any hospital with a new CCN that
came into existence after the proposed
voluntary participation election period
would not be required or eligible to join
the CJR model. We noted that our
proposed policy for new hospitals
would not be applicable in the case of
a reorganization event where the
remaining entity is a hospital with a
CCN that was participating in the CJR
model prior to the reorganization event;
consistent with our current policy, such
hospital would continue participation
in the CJR model regardless of whether
all predecessor hospitals were
participant hospitals prior to the
reorganization event.
We also proposed to exclude and
automatically withdraw rural hospitals
from participation in the CJR model
effective February 1, 2018. Since some
rural hospitals may want to continue
their participation in the CJR model, we
proposed to allow rural hospitals to
make a one-time, voluntary
participation election that complies
with the proposed § 510.115 in order for
the rural hospital to continue its
participation in the CJR model.
Specifically, we proposed that rural
hospitals (as defined in § 510.2) with a
CCN primary address in the 34
mandatory participation MSAs would
have a one-time opportunity to opt-in to
continue participation in the CJR model
during the proposed voluntary
participation election period. We
proposed that a hospital’s change in
rural status after the end of the
voluntary participation election period
would not change the hospital’s CJR
model participation requirements.
Specifically, we proposed that hospitals
in the proposed 34 mandatory
participation MSAs that are neither lowvolume or rural hospitals during the
proposed voluntary participation
election period would be required to
participate in the CJR model for
performance years 3, 4, and 5, and that
these hospitals would continue to be
required to participate in the CJR model
even if they subsequently become a
rural hospital. Similarly, we proposed
that a rural hospital that makes a
voluntary participation election during
the one-time opportunity would be
required to continue participating in the
CJR model if that hospital no longer
meets the definition of rural hospital in
§ 510.2. We proposed this approach so
that CMS could identify the hospitals,
by CCN, that would participate in the
model for the remainder of performance
VerDate Sep<11>2014
17:48 Nov 30, 2017
Jkt 244001
year 3 and performance years 4 and 5
at the conclusion of the proposed
voluntary participation election period
and so that there would be less
confusion about which hospitals are CJR
model participants.
We also stated that we believe that
our proposed approach to make the CJR
model primarily concentrated in the
higher cost MSAs where the
opportunity for further efficiencies and
care redesign may be more likely and to
allow voluntary participation in the
lower cost MSAs and for low-volume
and rural hospitals allows the
Innovation Center to focus on areas
where the opportunity for further
efficiencies and care redesign may be
more likely, while still allowing
hospitals in the voluntary MSAs the
opportunity to participate in the model.
In developing the proposed rule, we
considered that hospitals in the CJR
model had been participating for over a
year and a half as of the timing of the
proposed rule, and noted that we had
begun to give hospitals in the model
initial financial and quality results from
the first performance year. In many
cases, participant hospitals had made
investments in care redesign, and we
wanted to recognize such investments
and commitments to improvement
while reducing the overall number of
hospitals that are required to
participate. We also considered
stakeholder feedback that suggested we
make participation in the CJR model
voluntary, and the model size necessary
to detect at least a 3-percent reduction
in LEJR episode spending. Taking these
considerations into account, we
considered whether revising the model
to allow for voluntary participation in
all, some, or none of the 67 selected
MSAs would be feasible.
As discussed in section V. of this final
rule and interim final rule with
comment period (see 82 FR 39327
through 39331 for proposed rule impact
estimates), the estimated impact of the
changes to the CJR model we are
finalizing in this final rule and interim
final rule with comment period are
estimated to reduce the overall
estimated savings for performance years
3, 4, and 5 by $106 million. An
additional estimated $2 million in
reduced savings is estimated for the
performance year 2 reconciliation that
will occur in March of 2018 and will
incorporate the extreme and
uncontrollable circumstances policy we
are putting into place in with the
interim final rule with comment in this
rule for a total reduction in the
originally projected CJR model savings
of $108 million. If voluntary
participation was allowed in all of the
PO 00000
Frm 00010
Fmt 4701
Sfmt 4700
67 selected MSAs, the overall estimated
model impact would no longer show
savings, and would likely result in
additional costs to the Medicare
program. If participation was limited to
the proposed 34 mandatory
participation MSAs and voluntary
participation was not allowed in any
MSA, the impact to the overall
estimated model savings over the last 3
years of the model (excluding the
impact of the extreme and
uncontrollable circumstances policy in
the interim final rule with comment
period portion of this rule) would be
closer to a reduction of $45 million than
the reduction of $106 million estimate
presented in section V. of this final rule,
because our modeling, which does not
include assumptions about behavioral
changes that might lower fee-for-service
spending, estimates that 60 to 80
hospitals will choose voluntary
participation. Since we estimated that
these potential voluntary participants
would be expected to earn only positive
reconciliation payments under the
model, these positive reconciliation
payments would offset some of the
savings garnered from mandatory
participants. However, as many current
hospital participants in all of the 67
MSAs are actively invested in the CJR
model, we proposed to allow voluntary
participation in the 33 MSAs that were
not selected for mandatory participation
and for low-volume and rural hospitals.
We sought comment on this proposal.
Comment: Several commenters
disagreed with our proposal to make
CJR voluntary in certain MSAs.
Commenters noted that in some cases,
they believe their hospitals have
reduced spending and improved quality
of care as well as patient satisfaction as
a result of mandated participation in
CJR. A commenter stated that due to
mandated participation in CJR, it is now
more likely they will elect to participate
in other voluntary initiatives in the
future. Other commenters stated that the
current model of mandatory
participation in all 67 MSAs allows for
more generalizable evaluation results,
and that allowing for voluntary
participation in half of the current
MSAs will negatively impact the
evaluation. Some believe the proposal to
offer hospitals in approximately half of
the geographic areas the option to optin to the model on a voluntary basis will
incentivize patient selection (that is,
select only healthier patients for LEJR
procedures) and limit CMS’ ability to
improve beneficiary health and the
financial viability of the Medicare
program. Several commenters stated
that the proposal would stifle
innovation, resulting in providers
E:\FR\FM\01DER3.SGM
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sradovich on DSK3GMQ082PROD with RULES3
Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
hesitating before engaging in further
innovative payment efforts and
incentivizing only high-performing
hospitals to continue participation in
the voluntary MSAs. A commenter
wrote that they believe it is too early to
limit the scope of the CJR model and
that doing so will halt our ability to
produce data on the impact of the model
on quality and cost.
Response: We thank commenters for
their responses. We continue to believe
that by limiting the geographic areas in
which CJR is mandatory at this time, we
are encouraging innovation by reducing
burden on providers to participate in
models. We also believe that our
proposal will not incentivize patient
selection, as we will continue to
monitor hospitals in CJR for changes in
patient case-mix, and we are only
allowing for a one-time opt-in for
eligible hospitals. Hospitals that opt-in
to the model, as discussed later in this
section, will remain in CJR for the
remaining 3 performance years and will
not have the opportunity to later optout. In addition, all other current
requirements of participation, such as
notifying beneficiaries about the model,
remain in place. We also note that we
expect the CJR model to produce
savings for the Medicare program, as
detailed in section V. of this final rule,
and to improve the quality of care
provided to beneficiaries undergoing
LEJR procedures. Providers in voluntary
MSAs who have made investments and
want to continue participating in CJR
may do so by opting into the model. We
also reiterate that we are considering
options for a new bundled payment
initiative, as discussed previously in
section II.A. of this final rule, which
could provide additional participation
opportunities for providers currently in
CJR, including low volume and rural
providers, as well as hospitals located in
voluntary MSAs, that choose not to optin to CJR. Finally, we believe that we
will still be able to evaluate the CJR
model, given these policy changes. After
examining the remaining 34 mandatory
MSAs, we observed that there remains
significant variation in the types of
markets and hospitals who will
continue participation in the model
across a broad representation of
geographic regions. This wide variation
in hospital and market characteristics
will allow us to evaluate variations in
impact and assess the generalizability of
the findings of the CJR model.
Additionally, the anticipated inclusion
of hospitals in the voluntary MSAs who
opt-in has a high likelihood of resulting
in a robust data set for the evaluation of
generalizability of findings in
VerDate Sep<11>2014
17:48 Nov 30, 2017
Jkt 244001
mandatory areas that moved to
voluntary participation.
Comment: Many commenters
supported our proposal to make CJR
voluntary in 33 MSAs and voluntary for
all rural and low volume providers in
CJR. However, several commenters
requested we make CJR voluntary in all
67 MSAs, effectively removing any
mandatory participation. Commenters
opposed mandatory participation in
payment models due to providers’
differing levels of experience with risk
and infrastructure capabilities and
because some providers may not be
well-positioned to take on financial risk
for a specific patient population. Several
commenters cited concerns with
beneficiary access and the quality of
patient care under mandatory
initiatives. A commenter stated that
mandatory models penalize providers
that have not already participated in
other voluntary initiatives like BPCI.
Other commenters opposed mandatory
models due to a belief that quality of
care is more likely to improve when
health providers actively choose to
participate in payment models. Several
commenters stated that under our
proposal, physicians and other teams of
providers in voluntary MSAs could still
utilize the flexibility and resources
under CJR to improve patient care and
would be incentivized to do so.
Other commenters requested that
CMS make the model voluntary in all
MSAs across the country, not just those
67 currently participating in CJR, in
order to increase participation
opportunities in Advanced APMs and to
treat hospitals in all 67 current CJR
MSAs fairly by not mandating
participation in some areas and not
others. Several commenters noted
support for our proposal to make CJR
voluntary in certain areas, but requested
that CMS clarify that our priorities still
include delivery system reform given
that our proposal would limit the reach
of an existing model.
Response: We thank those
commenters that supported the
proposal. We note that although we are
reducing the number of MSAs where
participation in the CJR model is
mandatory, we continue to believe that
the CJR model offers opportunities for
providers to improve the quality of care
while reducing spending. We expect
many providers in the voluntary MSAs
to elect to continue participation in the
CJR model, and look forward to
continuing to work with all CJR
participant hospitals to improve quality
of care under the model. Delivery
system reform and movement toward
value-based payment remain CMS
priorities; we believe offering more
PO 00000
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Fmt 4701
Sfmt 4700
57075
opportunities for providers to engage in
such activities on a voluntary basis will
allow us to continue to pursue our
goals.
We continue to believe that offering
voluntary participation in 33 MSAs
while maintaining mandatory
participation in the remaining 34 MSAs
is the correct path forward at this time.
As discussed previously, we will
continue to require hospitals in the 34
highest-cost MSAs to participate in CJR
because we believe that those
geographic areas have significant
opportunity for reducing episode
spending while improving quality of
care under the model. Similarly, we
believe that at this point in the CJR
model (the end of the second
performance year), it is most prudent for
us to continue the model in the
geographic areas where providers have
already implemented infrastructure
changes as well as received initial
financial and quality results for the first
performance year. In addition, as
discussed previously, participation will
remain mandatory in the 34 higher-cost
MSAs where we believe there exists
significant opportunity to reduce
episode spending. In lieu of increasing
the number of MSAs participating in
CJR at this time, we are focusing our
efforts on development of other new
models that will further address our
goals of improving quality of care and
reducing spending.
Comment: Several commenters
supported our proposal to make
participation in CJR voluntary in some
of the current MSAs but objected to our
use of the high-cost criterion to
determine which MSAs should remain
mandatory. These commenters
requested that we randomly select
which MSAs would remain mandatory
or include a mixture of high- and lowcost MSAs in the remaining mandatory
areas.
Response: We thank the commenters
for their suggestions but continue to
believe that choosing the higher-cost
MSAs for mandatory participation is
appropriate, especially given the
transition to fully regional pricing in
performance years 4 and 5 of the CJR
model. The higher-cost MSAs may offer
more opportunity for hospitals in CJR to
reduce episode spending and improve
quality, especially as target prices move
to fully regional prices in year 4 of the
model.
Comment: A number of commenters
supported our proposal to allow low
volume hospitals in all 67 MSAs to
participate in the model on a voluntary
basis, but requested that we revise the
low volume threshold to offer voluntary
participation to a larger number of
E:\FR\FM\01DER3.SGM
01DER3
57076
Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
hospitals. Commenters specifically
requested we revise the threshold to 100
episodes across the 3-year historical
baseline (episodes that began in 2012–
2014), noting their belief that hospitals
with fewer episodes have experienced
more pricing volatility and have a more
difficult time managing care redesign
and episode spending under bundled
payment models.
Response: We proposed to define low
volume hospitals as those hospitals with
fewer than 20 episodes in the 3-year
historical baseline period (episodes in
2012 through 2014) used to create PY1
episode target prices. We note that this
definition is consistent with our
treatment of low volume hospitals
currently participating in CJR; since the
model’s inception, under
§ 510.300(b)(3), such hospitals receive a
100 percent regional target price in all
years of the model. This threshold
represents approximately the 10th
percentile of episode volume across
hospitals, which we believed was a
reasonable threshold. In addition, such
hospitals are defined as low volume for
purposes of the CJR model based only
on their historical LEJR episode volume
among Medicare FFS beneficiaries;
while these hospitals may furnish few
LEJR procedures to Medicare FFS
beneficiaries, they are not necessarily
rural or low volume in terms of bed
count or the volume of other services
provided. In response to commenters’
suggestion to revise the threshold, we
reexamined our data on episode volume
across the historical baseline, as well as
the initial performance year 1
reconciliation results.
We are finalizing our proposal to
define low volume hospitals as those
with fewer than 20 episodes in the
historical baseline period for the
following reasons. First, we note that a
number of low volume hospitals earned
initial reconciliation payments for
performance year 1, indicating that
having a low volume of episodes among
Medicare FFS beneficiaries does not
preclude a hospital from achieving care
redesign and financial success under the
model. Second, we are attempting to
balance competing considerations,
including not wanting to overburden
smaller providers, while still learning
how these types of providers perform in
an episode model like CJR. We will
continue to operate CJR as a mandatory
model in 34 MSAs so that we may better
understand how providers who
typically do not participate in voluntary
models respond to an episode payment
structure. In addition, small hospitals
are currently underrepresented in
voluntary Innovation Center models.
Thus, we are particularly interested in
learning about their experiences as
participants so that, when we examine
whether the statutory requirements for
expansion are met for CJR, we can
consider these experiences rather than
assuming that the experience of larger
hospitals can be simply applied to them.
We believe that the current manner of
defining low volume hospitals as those
having fewer than 20 episodes strikes an
appropriate balance between wanting to
understand the experience of hospitals
with different care patterns and
populations while limiting unnecessary
burden.
Comment: Commenters supported our
proposal to make participation
voluntary for rural hospitals in all 67
CJR MSAs. Commenters noted that our
proposal to allow for voluntary
participation in CJR for all rural
hospitals recognizes the unique
challenges that rural hospitals face,
including more limited access to
infrastructure.
Response: We thank the commenters
for their support. We agree that rural
hospitals face unique challenges related
to caring for their patient populations
and are finalizing our policy to allow
rural hospitals in all 67 CJR MSAs to
opt-in to continue participation in the
model.
Comment: Several commenters
requested that CMS clarify how the CJR
regional target prices will change if the
proposal is finalized.
Response: We are clarifying that
regional targets will not change because
they incorporate all lower-extremity
joint replacement episodes in a U.S.
Census Division, regardless of MSA and
CJR participation.
Comment: A commenter requested
clarification on the proposed CJR
participation requirements for hospitals
currently participating in BPCI for LEJR
episodes. The commenter noted that
under our proposed policy, it was
unclear whether a hospital participating
in BPCI for LEJR episodes would enter
CJR upon terminating participation on
BPCI, or when the current BPCI
initiative ends in September 2018. The
commenter believes that requiring
hospitals to enter CJR starting in the
fourth performance year could expose
them to undue financial risk, given that
CJR will transition to fully regional
pricing for performance years 4 and 5 of
the model.
Response: We note that we did not
propose any changes to the CJR
participation requirements with relation
to BPCI precedence. Hospitals that are
participating in the BPCI initiative for
LEJR episodes are not required to
participate in CJR. We did not propose
a special election period for BPCI
hospitals that terminate from BPCI (or
stop participating in LEJR episodes
under that initiative). In other words, a
hospital that terminates from BPCI after
January 1, 2018 and that is located in a
voluntary area or that qualified as a
rural or low volume provider under the
CJR definitions as of January 31, 2018
would not be required or able to
participate in CJR. When BPCI
concludes its final performance period,
we will not offer a special election
period. At that time, hospitals in
mandatory CJR MSAs who do not
qualify as rural or low volume under the
CJR definitions must participate in CJR,
as specified in § 510.100(b). Our
expectation is that hospitals that have
been participating in BPCI will have a
smooth transition into CJR based on
their experience in managing episodes
under the BPCI model. Hospitals not in
mandatory areas or hospitals that have
rural or low volume status under the
CJR definitions interested in
participating in voluntary bundled
payment models would have other
opportunities to apply to do so, as
discussed in section II.A. of this final
rule and interim final rule with
comment period.
sradovich on DSK3GMQ082PROD with RULES3
TABLE 1—CJR MANDATORY PARTICIPATION MSAS
MSA
10420
11700
12420
13140
17140
18580
.............
.............
.............
.............
.............
.............
VerDate Sep<11>2014
Wage-adjusted
episode payments
(in $)
MSA name
Akron, OH .........................................................................................................................................................
Asheville, NC ....................................................................................................................................................
Austin-Round Rock, TX ....................................................................................................................................
Beaumont-Port Arthur, TX ................................................................................................................................
Cincinnati, OH-KY-IN ........................................................................................................................................
Corpus Christi, TX .............................................................................................................................................
17:48 Nov 30, 2017
Jkt 244001
PO 00000
Frm 00012
Fmt 4701
Sfmt 4700
E:\FR\FM\01DER3.SGM
01DER3
$28,081
27,617
28,960
32,544
28,074
30,700
Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
57077
TABLE 1—CJR MANDATORY PARTICIPATION MSAS—Continued
MSA
20020
22500
23540
24780
25420
26300
28660
31080
31180
32820
33100
33740
33860
35300
35380
35620
36420
36740
37860
38300
38940
39340
39740
42680
45300
45780
46220
46340
Wage-adjusted
episode payments
(in $)
MSA name
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
Dothan, AL ........................................................................................................................................................
Florence, SC .....................................................................................................................................................
Gainesville, FL ..................................................................................................................................................
Greenville, NC ...................................................................................................................................................
Harrisburg-Carlisle, PA .....................................................................................................................................
Hot Springs, AR ................................................................................................................................................
Killeen-Temple, TX ............................................................................................................................................
Los Angeles-Long Beach-Anaheim, CA ...........................................................................................................
Lubbock, TX ......................................................................................................................................................
Memphis, TN-MS-AR ........................................................................................................................................
Miami-Fort Lauderdale-West Palm Beach, FL .................................................................................................
Monroe, LA .......................................................................................................................................................
Montgomery, AL ................................................................................................................................................
New Haven-Milford, CT .....................................................................................................................................
New Orleans-Metairie, LA .................................................................................................................................
New York-Newark-Jersey City, NY-NJ-PA .......................................................................................................
Oklahoma City, OK ...........................................................................................................................................
Orlando-Kissimmee-Sanford, FL .......................................................................................................................
Pensacola-Ferry Pass-Brent, FL .......................................................................................................................
Pittsburgh, PA ...................................................................................................................................................
Port St. Lucie, FL ..............................................................................................................................................
Provo-Orem, UT ................................................................................................................................................
Reading, PA ......................................................................................................................................................
Sebastian-Vero Beach, FL ................................................................................................................................
Tampa-St. Petersburg-Clearwater, FL ..............................................................................................................
Toledo, OH ........................................................................................................................................................
Tuscaloosa, AL .................................................................................................................................................
Tyler, TX ...........................................................................................................................................................
30,710
27,901
29,370
27,446
28,360
29,621
27,355
28,219
29,524
28,916
33,072
30,431
30,817
27,529
29,562
31,076
27,267
29,259
29,485
30,886
30,423
28,852
28,679
28,015
32,424
28,658
31,789
30,955
TABLE 2—CJR VOLUNTARY PARTICIPATION MSAS
sradovich on DSK3GMQ082PROD with RULES3
MSA
10740
12020
13900
14500
15380
16020
16180
16740
17860
19500
19740
20500
22420
23580
26900
28140
30700
31540
33340
33700
34940
34980
35980
36260
38900
40980
41180
41860
42660
43780
44420
45820
48620
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
VerDate Sep<11>2014
Wage-adjusted
episode payments
(in $)
MSA name
Albuquerque, NM ..............................................................................................................................................
Athens-Clarke County, GA ................................................................................................................................
Bismarck, ND ....................................................................................................................................................
Boulder, CO ......................................................................................................................................................
Buffalo-Cheektowaga-Niagara Falls, NY ..........................................................................................................
Cape Girardeau, MO-IL ....................................................................................................................................
Carson City, NV ................................................................................................................................................
Charlotte-Concord-Gastonia, NC-SC ................................................................................................................
Columbia, MO ...................................................................................................................................................
Decatur, IL ........................................................................................................................................................
Denver-Aurora-Lakewood, CO ..........................................................................................................................
Durham-Chapel Hill, NC ...................................................................................................................................
Flint, MI .............................................................................................................................................................
Gainesville, GA .................................................................................................................................................
Indianapolis-Carmel-Anderson, IN ....................................................................................................................
Kansas City, MO-KS .........................................................................................................................................
Lincoln, NE ........................................................................................................................................................
Madison, WI ......................................................................................................................................................
Milwaukee-Waukesha-West Allis, WI ...............................................................................................................
Modesto, CA .....................................................................................................................................................
Naples-Immokalee-Marco Island, FL ................................................................................................................
Nashville-Davidson—Murfreesboro—Franklin, TN ...........................................................................................
Norwich-New London, CT .................................................................................................................................
Ogden-Clearfield, UT ........................................................................................................................................
Portland-Vancouver-Hillsboro, OR-WA .............................................................................................................
Saginaw, MI ......................................................................................................................................................
St. Louis, MO-IL ................................................................................................................................................
San Francisco-Oakland-Hayward, CA ..............................................................................................................
Seattle-Tacoma-Bellevue, WA ..........................................................................................................................
South Bend-Mishawaka, IN-MI .........................................................................................................................
Staunton-Waynesboro, VA ...............................................................................................................................
Topeka, KS .......................................................................................................................................................
Wichita, KS .......................................................................................................................................................
17:48 Nov 30, 2017
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E:\FR\FM\01DER3.SGM
01DER3
$25,892
25,394
22,479
24,115
26,037
24,564
26,128
26,736
25,558
24,846
26,119
25,151
24,807
23,009
25,841
27,261
27,173
24,442
25,698
24,819
27,120
26,880
25,780
25,472
22,604
25,488
26,425
23,716
23,669
23,143
25,539
24,273
25,945
57078
Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
TABLE 3—LOW-VOLUME HOSPITALS LOCATED IN THE MANDATORY MSAS ELIGIBLE TO OPT-IN DURING VOLUNTARY
ELECTION PERIOD
sradovich on DSK3GMQ082PROD with RULES3
CCN
010034
010062
010095
010097
010108
010109
010149
040132
050040
050091
050137
050138
050139
050158
050205
050373
050378
050411
050468
050543
050548
050552
050561
050609
050641
050677
050723
050738
050744
050747
050751
050771
050776
050779
050780
050782
070038
070039
100048
100130
100240
100277
100320
100326
190005
190011
190079
190245
190300
190302
190308
190313
250012
250126
250167
310058
330080
330086
330100
330199
330231
330233
330240
330385
330396
330397
330399
330405
360241
370011
370158
Hospital name
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
VerDate Sep<11>2014
MSA
Community Hospital, Inc ..............................................
Wiregrass Medical Center ............................................
Hale County Hospital ...................................................
Elmore Community Hospital ........................................
Prattville Baptist Hospital .............................................
Pickens County Medical Center ...................................
Baptist Medical Center East ........................................
Leo N. Levi National Arthritis Hospital .........................
LAC-Olive View-UCLA Medical Center ........................
Community Hospital of Huntington Park ......................
Kaiser Foundation Hospital-Panorama City .................
Kaiser Foundation Hospital-Los Angeles .....................
Kaiser Foundation Hospital-Downey ............................
Encino Hospital Medical Center ...................................
Glendora Community Hospital .....................................
LAC + USC Medical Center ..........................................
Pacifica Hospital of the Valley .....................................
Kaiser Foundation Hospital-South Bay ........................
Memorial Hospital of Gardena .....................................
College Hospital Costa Mesa ......................................
Fairview Developmental Center ...................................
Motion Picture & Television Hospital ...........................
Kaiser Foundation Hospital-West Los Angeles ...........
Kaiser Foundation Hospital-Orange County-Anaheim
East Los Angeles Doctors Hospital .............................
Kaiser Foundation Hospital-Woodland Hills ................
Kaiser Foundation Hospital-Baldwin Park ...................
Greater El Monte Community Hospital ........................
Anaheim Global Medical Center ..................................
South Coast Global Medical Center ............................
Miracle Mile Medical Center ........................................
Coast Plaza Hospital ....................................................
College Medical Center ................................................
Martin Luther King Jr. Community Hospital .................
Foothill Medical Center ................................................
Casa Colina Hospital ...................................................
Connecticut Hospice Inc ..............................................
Masonic Home and Hospital ........................................
Jay Hospital ..................................................................
Lakeside Medical Center .............................................
Anne Bates Leach Eye Hospital ..................................
Douglas Gardens Hospital ...........................................
Poinciana Medical Center ............................................
Promise Hospital of Miami ...........................................
University Medical Center New Orleans ......................
University Health Conway ............................................
St. Charles Parish Hospital ..........................................
Monroe Surgical Hospital .............................................
St. Charles Surgical Hospital LLC ...............................
Omega Hospital LLC ....................................................
St. Bernard Parish Hospital .........................................
New Orleans East Hospital ..........................................
Alliance Healthcare System .........................................
North Oak Regional Medical Center ............................
Methodist Olive Branch Hospital ..................................
Bergen Regional Medical Center .................................
Lincoln Medical & Mental Health Center .....................
Montefiore Mount Vernon Hospital ..............................
New York Eye and Ear Infirmary .................................
Metropolitan Hospital Center .......................................
Queens Hospital Center ...............................................
Brookdale Hospital Medical Center .............................
Harlem Hospital Center ................................................
North Central Bronx Hospital .......................................
Woodhull Medical and Mental Health Center ..............
Interfaith Medical Center ..............................................
St. Barnabas Hospital ..................................................
Helen Hayes Hospital ..................................................
Edwin Shaw Rehab Institute ........................................
Mercy Hospital El Reno Inc .........................................
Purcell Municipal Hospital ............................................
17:48 Nov 30, 2017
Jkt 244001
PO 00000
Frm 00014
Fmt 4701
MSA title
33860
20020
46220
33860
33860
46220
33860
26300
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
31080
35300
35300
37860
33100
33100
33100
36740
33100
35380
33740
35380
33740
35380
35380
35380
35380
32820
32820
32820
35620
35620
35620
35620
35620
35620
35620
35620
35620
35620
35620
35620
35620
10420
36420
36420
Sfmt 4700
Montgomery, AL.
Dothan, AL.
Tuscaloosa, AL.
Montgomery, AL.
Montgomery, AL.
Tuscaloosa, AL.
Montgomery, AL.
Hot Springs, AR.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
Los Angeles-Long Beach-Anaheim, CA.
New Haven-Milford, CT.
New Haven-Milford, CT.
Pensacola-Ferry Pass-Brent, FL.
Miami-Fort Lauderdale-West Palm Beach, FL.
Miami-Fort Lauderdale-West Palm Beach, FL.
Miami-Fort Lauderdale-West Palm Beach, FL.
Orlando-Kissimmee-Sanford, FL.
Miami-Fort Lauderdale-West Palm Beach, FL.
New Orleans-Metairie, LA.
Monroe, LA.
New Orleans-Metairie, LA.
Monroe, LA.
New Orleans-Metairie, LA.
New Orleans-Metairie, LA.
New Orleans-Metairie, LA.
New Orleans-Metairie, LA.
Memphis, TN-MS-AR.
Memphis, TN-MS-AR.
Memphis, TN-MS-AR.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
New York-Newark-Jersey City, NY-NJ-PA.
Akron, OH.
Oklahoma City, OK
Oklahoma City, OK.
E:\FR\FM\01DER3.SGM
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57079
TABLE 3—LOW-VOLUME HOSPITALS LOCATED IN THE MANDATORY MSAS ELIGIBLE TO OPT-IN DURING VOLUNTARY
ELECTION PERIOD—Continued
CCN
Hospital name
370199 ...........
Lakeside Women’s Hospital A Member of INTEGRIS
Health.
Oklahoma Spine Hospital ............................................
Oklahoma Heart Hospital .............................................
Oklahoma Heart Hospital South ..................................
Highlands Hospital .......................................................
Excela Health Frick Hospital ........................................
McLeod Medical Center-Darlington .............................
Lake City Community Hospital .....................................
Baptist Memorial Hospital Tipton .................................
Seton Smithville Regional Hospital ..............................
Care Regional Medical Center .....................................
University of Texas Health Science Center at Tyler ...
Seton Southwest Hospital ............................................
Orem Community Hospital ...........................................
Baylor Scott & White Emergency Medical CenterCedar Park.
sradovich on DSK3GMQ082PROD with RULES3
370206
370215
370234
390184
390217
420057
420066
440131
450143
450605
450690
450865
460043
670087
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
As stated previously in this section,
we proposed a one-time participation
election period for all hospitals with a
CCN primary address located in the
voluntary participation MSAs listed in
Table 2, low-volume hospitals specified
in Table 3, and rural hospitals. Based on
the anticipated timing for when this
final rule implementing this proposal
would be published, we proposed that
the voluntary participation election
period would begin January 1, 2018, and
would end January 31, 2018. We noted
that we must receive the participation
election letter no later than January 31,
2018. We proposed that the hospital’s
participation election letter would serve
as the model participant agreement.
Voluntary participation would begin
February 1, 2018, and continue through
the end of the CJR model, unless sooner
terminated. Thus, participant hospitals
located in the voluntary participation
MSAs listed in Table 2, the low-volume
hospitals specified in Table 3, and the
rural hospitals that elect voluntary
participation would continue in the CJR
model without any disruption to
episodes attributed to performance year
3, which begins January 1, 2018.
Participant hospitals located in the
voluntary participation MSAs listed in
Table 2, the low-volume hospitals
specified in Table 3, and the rural
hospitals that do not elect voluntary
participation would be withdrawn from
the model effective February 1, 2018,
and all of their performance year 3
episodes up to and including that date
would be canceled, so that these
hospitals would not be subject to a
reconciliation payment or repayment
amount for performance year 3. We
proposed to implement our proposed
opt-in approach in this manner as a way
to balance several goals, including
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MSA
MSA title
36420
Oklahoma City, OK.
36420
36420
36420
38300
38300
22500
22500
32820
12420
18580
46340
12420
39340
12420
Oklahoma City, OK.
Oklahoma City, OK.
Oklahoma City, OK.
Pittsburgh, PA.
Pittsburgh, PA.
Florence, SC.
Florence, SC.
Memphis, TN-MS-AR.
Austin-Round Rock, TX.
Corpus Christi, TX.
Tyler, TX.
Austin-Round Rock, TX.
Provo-Orem, UT.
Austin-Round Rock, TX.
establishing a uniform time period for
hospitals to make a voluntary
participation election, avoiding
disruption of episodes for hospitals that
elect to continue their participation in
the CJR model, and preventing
confusion about whether a hospital is
participating in performance year 3 of
the model. Specifically, we considered
whether adopting a voluntary election
period that ended prior to the start of
performance year 3 would be less
confusing and less administratively
burdensome in terms of whether a
hospital is participating in performance
year 3. To implement this approach, the
voluntary participation election period
would have to close by December 31,
2017, such that each hospital would
have made its determination regarding
participation in performance year 3
before the start of performance year 3
(note that episodes attributed to
performance year 3 would still be
canceled under this alternative
approach for eligible hospitals that do
not make a participation election). We
noted that because the voluntary
election period under this approach
would conclude in advance of the
relevant CJR model performance year,
this approach could simplify our
administration of performance year 3 by
establishing in advance of performance
year 3 whether a hospital would be a
participant hospital for the totality of
performance year 3. However, given the
timing of the proposed rulemaking, we
were not confident that hospitals would
have sufficient time to make a voluntary
participation election by December 31,
2017. Thus, we proposed that the
voluntary participation election period
would occur during the first month of
performance year 3 (that is, throughout
January 2018) and would apply
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Fmt 4701
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prospectively beginning on February 1,
2018. We believed this approach would
best ensure adequate time for hospitals
to make a participation election while
minimizing the time period during
which participation in performance year
3 remains mandatory for all eligible
hospitals in the 67 selected MSAs. We
noted that based on timing
considerations, including potential
changes to the anticipated date of
publication of the final rule and interim
final rule with comment period, we may
modify the dates of the voluntary
participation election period and make
conforming changes to the dates for
voluntary participation in performance
year 3. We sought comment on the
proposed voluntary participation
election period, including whether we
should instead require the participation
election to be made by December 31,
2017 (that is, prior to the start of
performance year 3) or if a different or
later voluntary election period may be
preferable.
Comment: Some commenters
requested that we establish multiple
opt-in periods. Several commenters
requested an additional opt-in period
after we announce new voluntary
bundled payment initiatives, while
others requested an annual opt-in
process. Commenters also noted that
they believe hospitals in the voluntary
MSAs, as well as low volume and rural
hospitals, do not have enough
information to make an informed
decision about participation in CJR at
this time due to the following reasons:
(1) We have not yet released details of
the next voluntary bundled payment
initiative; (2) January 1 through 31, 2018
is too soon for hospitals to make an
educated decision; (3) it is unclear what,
if any, revisions will be made to the CJR
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pricing methodology if we finalize the
proposed OPPS policy to remove total
knee arthroplasty (TKA) from the
inpatient-only (IPO) list; and (4)
commenters believe that offering
multiple opt-in periods will result in a
great number of hospitals electing to
remain in CJR.
Response: We appreciate commenters’
concern that it may be more difficult for
hospitals to make a participation
decision during January 2018 given the
uncertain factors that commenters
provided. We understand that hospitals
facing uncertainty for these reasons or
others may choose not to opt-in based
on that uncertainty. However, we
believe that offering an opt-in period in
January of 2018 is a reasonable
timeframe, given the following reasons.
First, hospitals opting-in to the model
will have already been participants in
CJR for nearly 2 years at that time.
Participant hospitals have been
receiving episode data and have
received initial reconciliation results,
and in many cases an initial
reconciliation payment, for the first
performance year of CJR. Second, as
discussed in section II.I. of this final
rule and interim final rule with
comment period, we plan to address
commenters’ concerns about the
potential impact of the removal of TKA
from the IPO list in future rulemaking,
as appropriate. Finally, we believe that
a one-time opt-in process minimizes
potential patient selection and gaming
issues, as an annual opt-in process may
result in hospitals only opting-in to the
model if they are earning reconciliation
payments. We also believe that a onetime opt-in process reduces confusion
for hospitals regarding participation in
the CJR model. We will publish a list on
the CMS Web site of all hospitals
participating in the CJR model for
performance years 3 through 5 as of
February 1, 2018. Therefore, we are
finalizing our proposal to offer a onetime opt-in period for all participant
hospitals in the 33 voluntary MSAs and
rural and low volume hospitals in all 67
MSAs. In conjunction with the
publication of this final rule and interim
final rule with comment period, we will
post on our Web site the list of rural
hospitals we have identified as rural
that will be automatically excluded
from the CJR model if they do not
submit an opt-in election as specified in
this final rule and interim final rule
with comment period. CJR hospitals not
shown on this list who believe they
should be considered rural should
contact the CJR model at CJR@
cms.hhs.gov.
Comment: A commenter was
concerned about how the opt-in process
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would affect hospitals that have
submitted a rural reclassification
request prior to January 31, 2018 that
has not yet been approved by CMS. The
commenter requested that CMS notify
all current CJR hospitals about the optin process, use the date the
reclassification request was submitted to
CMS to determine whether a hospital is
rural, and offer a 30-day appeals process
for hospitals with pending rural
reclassification requests.
Response: We appreciate the
commenter’s recognition of the
operational challenges involved in
identifying which hospitals are rural
hospitals for purposes of the model. For
this reason, we proposed that we would
consider a hospital’s rural status as of
January 31, 2018 for purposes of
determining which hospitals are
required to participate in CJR or are
eligible for voluntary participation. We
proposed, and are now notifying all CJR
hospitals (and the public in general)
about, the opt-in process. We also have
included information about the
proposed process, which we are now
finalizing, in communications with
current CJR participant hospitals. We do
not believe it is appropriate, or in the
best interest of rural hospitals, to offer
an appeals process or additional opt-in
periods for hospitals that reclassify to
rural status, for the following reasons.
First, we seek to minimize confusion as
to which hospitals are in CJR and to
avoid creating further incentives for
hospitals to reclassify for reasons solely
related to the CJR model. Second, any
participant hospitals that are not
reclassified as rural as of January 31,
2018 will have been participating in the
CJR model since April 1, 2016 without
rural status. Finally, participant
hospitals have already had an incentive
under the model to reclassify to rural,
given that the CJR model has offered
more limited financial risk for rural
hospitals through lower stop-loss limits
since downside risk began in year 2. We
note that any participant hospital that
reclassifies to rural after the opt-in
period would have lower stop-loss
limits for the remainder of the model.
Thus, to more effectively operate the
model, and to make it clear which
hospitals will remain in CJR for
performance years 3 through 5, we are
finalizing our proposal to define rural
hospitals for purposes of the model as
those hospitals that have rural status as
of the final day of the voluntary
participation election period (January
31, 2018).
To specify their participation election,
we proposed that hospitals would
submit a written participation election
letter to CMS in a form and manner
PO 00000
Frm 00016
Fmt 4701
Sfmt 4700
specified by CMS. We noted that we
intend to provide templates that can
easily be completed and submitted in
order to limit the burden on hospitals
seeking to opt-in. If a hospital with a
CCN primary address located in the
voluntary participation MSAs or a lowvolume or rural hospital in the
mandatory participation MSAs does not
submit a written participation election
letter by January 31, 2018, the hospital’s
participation in performance year 3
would end, all of its performance year
3 episodes would be canceled, and it
would not be included in the CJR model
for performance years 4 and 5.
We proposed a number of
requirements for the participation
election letter and that the hospital’s
participation election letter would serve
as the model participant agreement.
First, we proposed that the participation
election letter must include all of the
following:
• Hospital Name.
• Hospital Address.
• Hospital CCN.
• Hospital contact name, telephone
number, and email address.
• If selecting the Advanced APM
track, attestation of CEHRT use as
defined in § 414.1305.
Second, we proposed that the
participation election letter must
include a certification in a form and
manner specific by CMS that—
• The hospital will comply with all
requirements of the CJR model (that is,
42 CFR part 510) and all other laws and
regulations that are applicable to its
participation in the CJR model; and
• Any data or information submitted
to CMS will be accurate, complete and
truthful, including, but not limited to,
the participation election letter and any
quality data or other information that
CMS uses in reconciliation processes or
payment calculations or both.
We solicited feedback on this
proposed certification requirement,
including whether the certification
should include different or additional
attestations.
Finally, we proposed that the
participation election letter be signed by
the hospital administrator, chief
financial officer (CFO) or chief
executive officer (CEO).
We proposed that, if the hospital’s
participation election letter meets these
criteria, we would accept the hospital’s
participation election. Once a
participation election for the CJR model
is made and is effective, the participant
hospital would be required to
participate in all activities related to the
CJR model for the remainder of the CJR
model unless the hospital’s
participation is terminated sooner.
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Comment: Several commenters
requested that we make the opt-in
template available as soon as possible,
and that the template be clear and
concise, minimizing the administrative
burden on hospitals and limiting
confusion.
Response: We are finalizing the
proposed elements of the participation
election letter with one modification.
We will not require hospitals to attest to
CEHRT use in the opt-in template, as we
currently request that information from
hospitals on an annual basis, along with
their clinician financial arrangements
list, when they elect a track in CJR for
purposes of Advanced APM status
consistent with § 510.120. In order to
minimize burden and limit confusion
for hospitals as to whether attesting to
CEHRT use in the opt-in template
would supersede other information
provided to use regarding CEHRT use,
we are removing that item from the optin template. We note that the opt-in
template for hospitals eligible for
voluntary participation in CJR has been
posted on the CMS public Web site at
https://innovation.cms.gov/initiatives/
cjr in conjunction with this final rule
and interim final rule with comment
period.
We noted that episodes end 90 days
after discharge for the CJR model and
episodes that do not start and end in the
same calendar year will be attributed to
the following performance year. For
example, episodes that start in October
2017 and do not end on or before
December 31, 2017 are attributed to
performance year 3. Our methodology
for attributing these episodes to the
subsequent performance year would be
problematic in cases where a hospital
with a CCN primary address located in
a voluntary participation MSA or a rural
hospital or a low-volume hospital, as
specified by CMS, has not elected to
voluntarily continue participating in the
model. Therefore, for a hospital with a
CCN primary address located in a
voluntary participation MSA, or a rural
hospital or a low-volume hospital, as
specified by CMS, that does not elect
voluntary participation during the onetime voluntary participation election
period, we proposed that all episodes
attributed to performance year 3 for that
hospital would be canceled and would
not be included in payment
reconciliation. Such hospitals would
have their participation in the CJR
model withdrawn effective February 1,
2018. We noted that this proposal is
consistent with our policy for treatment
of episodes that have not ended by or
on the last day of performance year 5
and cannot be included in performance
year 5 reconciliation due to the end of
the model (see Table 8 of the CJR model
final rule (80 FR 73326)).
We stated that we believe our
proposed opt-in approach to allow for
voluntary participation in the CJR
model by certain hospitals would be
less burdensome on such hospitals than
a potential alternative approach of
requiring hospitals to opt-out of the
model. In developing the proposal to
allow eligible hospitals located in the
proposed 33 voluntary participation
MSAs and low-volume and rural
hospitals located in the 34 mandatory
participation MSAs to elect voluntary
participation, we considered whether to
propose that hospitals would have to
make an affirmative voluntary
participation election (that is, an opt-in
approach) or to propose that these
hospitals would continue to be required
to participate in the CJR model unless
written notification was given to CMS to
withdraw the hospital from the CJR
model (that is, an opt-out approach). We
stated that we believe an opt-in
approach would be less burdensome on
hospitals, because it would not require
participation in the CJR model for
hospitals located in the proposed 33
voluntary participation MSAs and for
low-volume and rural hospitals located
in the 34 mandatory participation MSAs
unless the hospital affirmatively chose
it. Further, we stated that we believe
requiring an affirmative opt-in election
would result in less ambiguity about a
hospital’s participation intentions as
compared to an opt-out approach.
Specifically, with an opt-in approach, a
hospital’s participation election would
document each hospital’s choice,
whereas under an opt-out approach
there could be instances where hospitals
fail to timely notify CMS of their desire
to withdraw from participation and are
thus included in the model and subject
57081
to potential repayment amounts. For
these reasons, we proposed an opt-in
approach. We sought comment on this
proposal and the alternative considered.
Comment: A commenter requested
that CMS clarify whether hospitals are
allowed to terminate participation in
CJR. The commenter noted that
although our proposal for the opt-in
process is clear, the language in the
proposed rule does not clearly state
whether a hospital could opt-in to CJR
and later opt-out of the model after
January 2018. Another commenter
requested clarification as to whether a
hospital that opts-in to CJR may later
withdraw from the model through
participation in a new voluntary
bundled payment initiative.
Response: Under our proposed policy,
all hospitals that opt-in to the model as
of January 31, 2018 would be required
to participate through the end of
performance year 5 (episodes that end
by December 31, 2020), unless such
participation were terminated in
accordance with § 510.410 or § 510.900,
regardless of the hospital’s participation
in a new voluntary bundled payment
initiative.
A summary of the finalized changes to
the CJR model participation
requirements is shown in Table 4.
Summary of Final Decisions: We are
finalizing our proposals to reduce the
number of MSAs where all IPPS
hospitals are required to participate in
CJR from 67 to 34, and to allow for
voluntary participation for all IPPS
participant hospitals in the remaining
33 MSAs. We are also finalizing our
proposal that rural hospitals (as defined
at § 510.2 as of January 31, 2018) and
low volume hospitals, defined as
hospitals with fewer than 20 episodes in
the historical baseline period used to
create the PY1 target prices, in the 34
mandatory participation MSAs are not
required to participate in the model but
may opt-in to the model. We are
finalizing our proposal to offer a single
opt-in period from January 1, 2018
through January 31, 2018. Table 4
provides a summary of our final
participation requirements.
These policies are codified at
§§ 510.2, 510.105, and 510.115.
sradovich on DSK3GMQ082PROD with RULES3
TABLE 4—PARTICIPATION REQUIREMENTS FOR HOSPITALS IN THE CJR MODEL
Required to
participate as of
February 1, 2018
May elect
voluntary
participation
Participation
election period
Election
effective
date
Mandatory Participation MSAs
All IPPS participant hospitals, except rural and low-volume *
Rural hospitals * ......................................................................
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Yes .......................
No ........................
Fmt 4701
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No ........................
Yes .......................
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Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
TABLE 4—PARTICIPATION REQUIREMENTS FOR HOSPITALS IN THE CJR MODEL—Continued
Required to
participate as of
February 1, 2018
Low-volume hospitals (see Table 3) ......................................
May elect
voluntary
participation
No ........................
Yes .......................
Participation
election period
Election
effective
date
1/1/2018–1/31/2018
2/1/2018
1/1/2018–1/31/2018
2/1/2018
Voluntary Participation MSAs
All IPPS participant hospitals .................................................
No ........................
Yes .......................
* Note: Participation requirements are based on the CCN status of the hospital as of January 31, 2018. A change in rural status after the voluntary election period does not affect the participation requirements.
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2. Proposed Codification of CJR ModelRelated Evaluation Participation
Requirements
We note that for the CJR model
evaluation, the data collection methods
and key evaluation research questions
under the proposed reformulated
approach (that is, the proposal for
voluntary opt-in elections discussed in
section III.B.1. of the proposed rule (82
FR 39313)) would remain similar to the
approach presented in the CJR model
final rule. The evaluation methodology
for the CJR model would be consistent
with the standard Innovation Center
approaches we have taken in other
voluntary models such as the Pioneer
Accountable Care Organization (ACO)
Model. Cooperation and participation in
model-related activities by all hospitals
that participate in the CJR model would
continue to be extremely important to
the evaluation. Therefore, with respect
to model-related evaluation activities,
we proposed to add provisions in
§ 510.410(b)(1)(i)(G) to specify that CMS
may take remedial action if a participant
hospital, or one of its collaborators,
collaboration agents, or downstream
collaboration agents fails to participate
in model-related evaluation activities
conducted by CMS and/or its
contractors for any performance year in
which the hospital participates. We
noted that we believe the addition of
this provision would make participation
and collaboration requirements for the
CJR model evaluation clear to all
participant hospitals and in particular to
hospitals that are eligible to elect
voluntary participation. We sought
comment on our proposed regulatory
change.
Comment: A commenter requested
clarification on our proposal, including
how CMS will monitor hospitals for
compliance, what the remedial actions
will be, and if the evaluation
requirements apply to collaborators as
well.
Response: In order to monitor
whether hospitals comply with the
model’s evaluation requirements, we
may do so through our existing
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monitoring activities, which include
data analysis and other methods such as
site visits and interviews, or through
other methods. Under the existing CJR
model regulations, we have numerous
remedial actions available to us, should
a hospital fail to comply with any of the
model requirements. We believe that
our ability to evaluate the CJR model is
a crucial aspect of the model test, and
therefore we are finalizing our proposal
to add provisions to § 510.410(b)(1)(i)(G)
to specify that we may take remedial
action if a CJR participant hospital,
collaborator, collaboration agent, or
downstream collaboration agent fails to
comply with model-related evaluation
activities. We refer readers to section
§ 510.410(b)(2) of the CJR regulations for
a list of potential remedial actions.
Finally, we note that our regulations at
§ 510.410 state that model requirements
such as the addition of evaluation
requirements apply to CJR collaborators
as well as participant hospitals.
3. Comment Solicitation: Incentivizing
Participation in the CJR Model
In the August 17, 2017 proposed rule
(82 FR 39310 through 39333), we
proposed to make participation in the
CJR model voluntary in 33 MSAs and
for low-volume and rural hospitals in
the remaining 34 MSAs via the
proposed opt-in election policy
discussed in section III.B.1 of the
proposed rule (82 FR 39313). In order to
keep hospitals in all MSAs selected for
participation in the CJR model actively
participating in the model, we solicited
comment on ways to further incentivize
eligible hospitals to elect to continue
participating in the CJR model for the
remaining years of the model and to
further incentivize all participant
hospitals to advance care
improvements, innovation, and quality
for beneficiaries throughout LEJR
episodes.
Comment: Commenters suggested a
variety of ways that CMS could
incentivize participation in the CJR
model, and in bundled payment models
in general, including: Allowing
convener organizations, including
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medical device manufacturers, to
participate in CJR; limiting model
participation to entities that provide
direct patient care; reducing the regional
component of CJR target prices in
performance years 3 through 5 of the
model; setting target prices at the higher
of the hospital-specific or regional
amount; using MSAs instead of U.S.
Census Divisions to establish regional
pricing; avoiding rebasing prices near
the beginning of the model; limiting the
use of a national trend factor to avoid
penalizing hospitals that have reduced
episode spending under models like
BPCI; including reconciliation and
repayment amounts in target prices;
including risk adjustment in the pricing
methodology, including adjustment for
socioeconomic factors; allowing
gainsharing on a more frequent basis;
excluding further procedures and
diagnoses, such as cancer, from CJR
model episodes; altering the pricing
structure to ensure that high-performing
hospitals are incentivized to remain in
the model as it moves to regional
pricing and baseline years are updated
to include later years; allow hospitals to
choose when they enter downside risk;
annually evaluating whether models
should include outpatient procedures;
changing precedence rules to level the
playing field for hospitals; broadening
CJR to allow other entities such as
physicians and non-IPPS providers such
as inpatient rehabilitation facilities to
initiate episodes and bear direct
financial risk for episode spending;
offering waivers of certain IRF payment
policies to allow for additional
flexibilities for post-acute care
providers; and releasing baseline data
and target prices in advance of model
start dates.
Response: We thank the commenters
for their suggestions to incentivize
participation in CJR and in bundled
payment models in general. We note
that we have considered and discussed
some of these suggestions and issues in
prior rulemaking that established the
CJR model regulations (see 80 FR
73273). We will continue to consider
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these options raised by commenters as
we move forward with CJR and other
models.
Additionally, we noted in the August
17, 2017 proposed rule that, under the
CJR refinements established in the
January 3, 2017 EPM final rule, the total
amount of gainsharing payments for a
performance year paid to physicians,
non-physician practitioners, physician
group practices (PGPs), and nonphysician practitioner group practices
(NPPGPs) must not exceed 50 percent of
the total Medicare approved amounts
under the Physician Fee Schedule for
items and services that are furnished to
beneficiaries during episodes that
occurred during the same performance
year for which the CJR participant
hospital accrued the internal cost
savings or earned the reconciliation
payment that comprises the gainsharing
payment being made (§ 510.500(c)(4)).
Distribution payments to these
individuals and entities are similarly
limited as specified in § 510.505(b)(8),
and downstream distribution payments
are similarly limited as specified in
§ 510.506(b)(8). These program integrity
safeguards, which are consistent with
the gainsharing caps in other Innovation
Center models, were included to avoid
setting an inappropriate financial
incentive that may result in stinting,
steering or denial of medically
necessary care (80 FR 73415 and 73416).
While we did not propose in the August
17, 2017 proposed rule any changes to
the gainsharing caps for these models,
we noted that we had heard various
opinions from stakeholders, including
the Medicare Payment Advisory
Commission (MedPAC), on the relative
benefit of such limitations on
gainsharing and in the proposed rule we
solicited comment on this requirement
and any alternative gainsharing caps
that may be appropriate to apply to
physicians, non-physician practitioners,
PGPs, and NPPGPs.
Comment: Several commenters
supported the current 50 percent
gainsharing cap. Other commenters
offered a variety of recommendations for
changing the gainsharing limitations,
including: Increasing the frequency of
gainsharing payments from hospitals to
collaborators; increasing the gainsharing
cap on physicians, non-physician
practitioners, PGPs, and NPPGPs to 70
percent; granting hospitals increased
flexibility in designing their respective
gainsharing programs and determining
the amount of savings to share with
their collaborators; removing all
gainsharing limits, noting that when
surgeons coordinate with the hospital to
provide efficient, high-quality care that
decreases cost, they should be able to
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fully share in the resulting cost
reductions; providing more clarity on
the applicability of the gainsharing
policy; and coordinating unified
guidance from CMS and the HHS Office
of the Inspector General (OIG) relating
to gainsharing and the model’s fraud
and abuse waivers, as well as providing
a mechanism for hospitals to ask
questions about the model’s waivers.
Response: We thank the commenters
for their suggestions regarding
gainsharing limitations and alternative
gainsharing caps. We will continue to
consider these issues raised by
commenters as we move forward with
CJR and other models.
Comments on the waivers of fraud
and abuse laws for the CJR model are
beyond the scope of this rulemaking.
Fraud and abuse waivers issued in
connection with the CJR model are
available at https://www.cms.gov/
Medicare/Fraud-and-Abuse/Physician
SelfReferral/Fraud-and-AbuseWaivers.html and on the OIG’s Web site.
No waivers of any fraud and abuse
authorities are being issued in this final
rule.
C. Maintaining ICD–CM Codes for
Quality Measures
In the CJR model final rule (80 FR
73474), we discussed how specific
International Classification of Diseases
(ICD)—Clinical Modifications (CM)
procedure codes define group of
procedures included in the Hospitallevel risk-standardized complication
rate (RSCR) following elective primary
total hip arthroplasty (THA) and/or total
knee arthroplasty (TKA) (NQF #1550)
(Hip/Knee Complications) measure. In
discussing quality measures in general,
the ICD–CM codes relative to defining a
measure cohort are updated annually
and are subject to change. For example,
in the EPM final rule (82 FR 389), we
itemized specific ICD–9–CM and ICD–
10–CM codes for Hip/Knee
Complications measure. As quality
measures are refined and maintained,
the ICD–CM code values used to
identify the relevant diagnosis and/or
procedures included in quality
measures can be updated. For example,
CMS’ Center for Clinical Standards and
Quality (CCSQ) has recently updated
the list of ICD–10 codes used to identify
procedures included in the Hip/Knee
Complications measure. We did not
intend for our preamble discussions of
certain ICD–CM codes used, for
example, to identify procedures
included in the Hip/Knee
Complications measures, and therefore
the PRO cohorts for the CJR model, to
set a policy that would define the
relevant cohorts for the entirety of the
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57083
CJR model. We should have also
directed readers to look for the most
current codes on the CMS quality Web
site at https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-AssessmentInstruments/HospitalQualityInits/
Measure-Methodology.html. To ensure
that model participants are aware of
periodic ICD–CM code updates to the
Hip/Knee Complications measure, we
proposed to clarify that participants
must use the applicable ICD–CM code
set that is updated and released to the
public each calendar year in April by
CCSQ and posted on the Hospital
Quality Initiative Measure Methodology
Web site (https://www.cms.gov/
medicare/Quality-Initiatives-PatientAssessment-Instruments/Hospital
QualityInits/MeasureMethodology.html) for purposes of
reporting each of those measures.
CMS relies on the National Quality
Forum (NQF) measure maintenance
update and review processes to update
substantive aspects of measures every 3
years. Through NQF’s measure
maintenance process, NQF endorsed
measures are sometimes updated to
incorporate changes that we believe do
not substantially change the nature of
the measures. Examples of such changes
include updated diagnosis or
procedures codes, changes to patient
population, definitions, or extension of
the measure endorsement to apply to
other settings. We believe these types of
maintenance changes are distinct from
more substantive changes and do not
require the use of the agency’s
regulatory process used to update more
detailed aspects of quality measures.
Final Decision: We did not receive
any comments regarding this section.
Therefore, we are finalizing the proposal
without modification.
D. Clarification of CJR Reconciliation
Following Hospital Reorganization
Event
In the CJR model final rule (80 FR
73348) rule, we discussed our method of
setting target prices using all historical
episodes that would represent our best
estimate of historical volume and
payments for participant hospitals when
an acquisition, merger, divestiture, or
other reorganization results in a hospital
with a new CCN. When a reorganization
event occurs during a performance year,
CMS updates the quality-adjusted
episode target prices for the new or
surviving participant hospital
(§ 510.300(b)(4)). Following the end of a
performance year, CMS performs annual
reconciliation calculations in
accordance with the provisions
established in § 510.305. The annual
reconciliation calculations are specific
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to the episodes attributable to each
participant hospital entity for that
performance year. The applicable
quality-adjusted episode target price for
such episodes is the quality-adjusted
episode target price that applies to the
episode type as of the anchor
hospitalization admission date
(§ 510.300(a)(3)). For example, if during
a performance year, two participant
hospitals (Hospital A and Hospital B)
merge under the CCN of one of those
two participant hospital’s CCN (Hospital
B’s CCN), (assuming no other
considerations apply) three initial (and
three subsequent) annual reconciliation
calculations for that performance year
are performed: An initial (and
subsequent) reconciliation for Hospital
A for the episodes where the anchor
hospitalization admission occurred
prior to the merger (as determined by
the CCN on the IPPS claim), using
Hospital A’s episode target price for that
time period; an initial (and subsequent)
reconciliation for Hospital B for the
episodes where anchor hospitalization
admission occurred before the merger
(as determined by the CCN on the IPPS
claim), using Hospital B’s episode target
price for that time period; and an initial
(and subsequent) reconciliation for the
post-merger entity (merged Hospitals A
and B) for the episodes where anchor
hospitalization admission occurred on
or after the merger’s effective date, using
the episode target price for that time
period. Reorganization events that
involve a CJR participant hospital and a
hospital that is not participating in the
CJR model and result in the new
organization operating under the CJR
participant hospital’s CCN, would not
affect the reconciliation for the CJR
participant hospital for episodes that
initiate before the effective date of the
reorganization event. Episodes that
initiate after such reorganization event
would be subject to an updated qualityadjusted episode target price that is
based on historical episodes for the CJR
participant hospital which would
include historical episode expenditures
for all hospitals that are integrated
under the surviving CCN. These policies
have been in effect since the start of the
CJR model on April 1, 2016. To further
clarify this policy for the CJR model, we
proposed to add a provision specifying
that separate reconciliation calculations
are performed for episodes that occur
before and after a reorganization that
results in a hospital with a new CCN at
§ 510.305(d)(1). We noted that we
believe this clarification would increase
transparency and understanding of the
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payment reconciliation processes for the
CJR model. We sought comment on this
proposal.
Comment: We received no comments
on our proposal.
Response: We will finalize this
proposal without modification. We will
continue to perform two reconciliation
calculations for hospitals that undergo a
merger, consistent with our existing
regulations.
E. Proposed Adjustment to the Pricing
Calculation for the CJR Telehealth
HCPCS Codes To Include the Facility PE
Values
In the CJR model final rule (80 FR
73450), we established 9 HCPCS Gcodes to report home telehealth
evaluation and management (E/M) visits
furnished under the CJR telehealth
waiver as displayed in Table 5. These
codes have been payable for CJR model
beneficiaries since the CJR model began
on April 1, 2016. Pricing for these 9
codes is updated each calendar year to
reflect the work and malpractice (MP)
relative value units (RVUs) for the
comparable office and other outpatient
E/M visit codes on the Medicare
Physician Fee Schedule (MPFS). As we
stated in the CJR model final rule (80 FR
73450), in finalizing this pricing method
for these codes, we did not include the
practice expense (PE) RVUs of the
comparable office and other outpatient
E/M visit codes in the payment rate for
these unique CJR model services, based
on the belief that practice expenses
incurred to furnish these services are
marginal or are paid for through other
MPFS services. However, since the
publication of the CJR model final rule,
stakeholders have expressed concern
that the zero value assigned to the PE
RVUs for these codes results in
inaccurate pricing. Stakeholders assert
that there are additional costs related to
the delivery of telehealth services under
the CJR model such as maintaining the
telecommunications equipment,
software and security and that, while
these practice expense costs are not
equivalent to in-person service delivery
costs, they are greater than zero. In
considering the pricing concerns voiced
by stakeholders, we recognized that
there are resource costs in practice
expense for telehealth services
furnished remotely. However, we did
not believe the current PE methodology
and data accurately accounted for these
costs relative to the PE resource costs for
other services. This belief previously led
us to assign zero PE RVUs in valuing
these services, but because we
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recognized that there are some costs that
were not being accounted for by the
current pricing for these CJR model
codes, we believed an alternative to
assigning zero PE RVUs would be to use
the facility PE RVUs for the analogous
in-person services. While we
acknowledged that assigning the facility
PE RVUs would not provide a perfect
reflection of practice resource costs for
remote telehealth services under the CJR
model, in the absence of more specific
information, we believed it was likely a
better proxy for such PE costs than zero.
Therefore, we proposed to use the
facility PE RVUs for the analogous
services in pricing the 9 CJR HCPCS G
codes shown in Table 5. Additionally,
we proposed to revise § 510.605(c)(2) to
reflect the addition of the RVUs for
comparable codes for the facility PE to
the work and MP RVUs we are currently
using for the basis for payment of the
CJR telehealth waiver G codes.
Comment: Commenters supported
CMS’ proposal to assign facility PE
RVUs to the telehealth codes utilized
under the CJR model, stating that our
proposal acknowledges the additional
infrastructure and care coordination
costs associated with providing
telehealth services and supports
increasing the use of telemedicine for
Medicare beneficiaries. A commenter
requested that CMS allow physical
therapists to furnish telehealth services
under CJR. Another commenter
requested that CMS develop a
demonstration to test whether capitated
payments may increase the utilization of
telehealth services.
Response: We thank the commenters
for their support of our proposed policy.
We note that we did not propose to
make any changes to the regulations
regarding providers and suppliers that
may furnish telehealth services under
CJR. We agree that, while the PE values
are not a perfect representation of the
overhead costs associated with
furnishing telehealth services, they are a
reasonable approximation of the care
coordination and infrastructure costs.
We are finalizing our proposed policy to
use the facility PE RVUs for analogous
services when pricing the 9 HCPCS Gcodes used for telehealth services under
the CJR model. We also thank
commenters for their suggestions
around incentivizing the use of
telehealth more generally.
This policy is codified in the
regulations at § 510.605 (which we
inadvertently referred to as § 510.65 in
the proposed rule).
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57085
TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF RESIDENCE
Work and MP RVUs equal to
those of the corresponding
office/outpatient E/M visit
CPT code for same calendar
year under the PFS; PE
RVUs equal to the facility
values for each
HCPCS Code
No.
Long descriptor
Short descriptor
G9481 .............
Remote in-home visit for the evaluation and management of
a new patient for use only in the Medicare-approved
Comprehensive Care for Joint Replacement model, which
requires these 3 key components:
• A problem focused history.
• A problem focused examination.
• Straightforward medical decision making, furnished in
real time using interactive audio and video technology.
Counseling and coordination of care with other physicians,
other qualified health-care professionals or agencies are
provided consistent with the nature of the problem(s) and
the needs of the patient or the family or both. Usually, the
presenting problem(s) are self-limited or minor. Typically,
10 minutes are spent with the patient or family or both via
real time, audio and video intercommunications technology.
Remote in-home visit for the evaluation and management of
a new patient for use only in the Medicare-approved
Comprehensive Care for Joint Replacement model, which
requires these 3 key components:
• An expanded problem focused history.
• An expanded problem focused examination.
• Straightforward medical decision-making, furnished in
real time using interactive audio and video technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of low to moderate severity. Typically, 20
minutes are spent with the patient or family or both
via real time, audio and video intercommunications
technology.
Remote in-home visit for the evaluation and management of
a new patient for use only in the Medicare-approved
Comprehensive Care for Joint Replacement model, which
requires these 3 key components:
• A detailed history.
• A detailed examination.
• Medical decision making of low complexity, furnished
in real time using interactive audio and video technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of moderate severity. Typically, 30 minutes are spent with the patient or family or both via
real time, audio and video intercommunications technology.
Remote in-home visit for the evaluation and management of
a new patient for use only in the Medicare-approved
Comprehensive Care for Joint Replacement model, which
requires these 3 key components:
Remote E/M new pt 10 mins ...
99201
Remote E/M new pt 20 mins ...
99202
Remote E/M new pt 30 mins ...
99203
Remote E/M new pt 45 mins ...
99204
G9482 .............
G9483 .............
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G9484 .............
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TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF
RESIDENCE—Continued
HCPCS Code
No.
Long descriptor
G9485 .............
G9486 .............
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G9487 .............
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Short descriptor
• A comprehensive history.
• A comprehensive examination.
• Medical decision making of moderate complexity, furnished in real time using interactive audio and video
technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of moderate to high severity. Typically, 45
minutes are spent with the patient or family or both
via real time, audio and video intercommunications
technology.
Remote in-home visit for the evaluation and management of
a new patient for use only in the Medicare-approved
Comprehensive Care for Joint Replacement model, which
requires these 3 key components:
• A comprehensive history.
• A comprehensive examination.
• Medical decision making of high complexity, furnished in real time using interactive audio and video
technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of moderate to high severity. Typically, 60
minutes are spent with the patient or family or both
via real time, audio and video intercommunications
technology.
Remote in-home visit for the evaluation and management of
an established patient for use only in the Medicare-approved Comprehensive Care for Joint Replacement
model, which requires at least 2 of the following 3 key
components:
• A problem focused history.
• A problem focused examination.
• Straightforward medical decision making, furnished in
real time using interactive audio and video technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are self limited or minor. Typically, 10 minutes
are spent with the patient or family or both via real
time, audio and video intercommunications technology.
Remote in-home visit for the evaluation and management of
an established patient for use only in the Medicare-approved Comprehensive Care for Joint Replacement
model, which requires at least 2 of the following 3 key
components:
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Work and MP RVUs equal to
those of the corresponding
office/outpatient E/M visit
CPT code for same calendar
year under the PFS; PE
RVUs equal to the facility
values for each
Fmt 4701
Remote E/M new pt 60 mins ...
99205
Remote E/M est. pt 10 mins ....
99212
Remote E/M est. pt 15 mins ....
99213
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57087
TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF
RESIDENCE—Continued
HCPCS Code
No.
Long descriptor
G9488 .............
G9489 .............
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1. Background for Submission of
Clinician Engagement Lists
Under the Quality Payment Program,
the Advanced APM track of the CJR
model does not include eligible
clinicians on a Participation List; rather
the CJR Advanced APM track currently
includes eligible clinicians on an
Affiliated Practitioner List as defined
under § 414.1305 and described under
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Short descriptor
• An expanded problem focused history.
• An expanded problem focused examination.
• Medical decision making of low complexity, furnished
in real time using interactive audio and video technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of low to moderate severity. Typically, 15
minutes are spent with the patient or family or both
via real time, audio and video intercommunications
technology.
Remote in-home visit for the evaluation and management of
an established patient for use only in the Medicare-approved Comprehensive Care for Joint Replacement
model, which requires at least 2 of the following 3 key
components:
• A detailed history.
• A detailed examination.
• Medical decision making of moderate complexity, furnished in real time using interactive audio and video
technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of moderate to high severity. Typically, 25
minutes are spent with the patient or family or both
via real time, audio and video intercommunications
technology.
Remote in-home visit for the evaluation and management of
an established patient for use only in the Medicare-approved Comprehensive Care for Joint Replacement
model, which requires at least 2 of the following 3 key
components:
• A comprehensive history.
• A comprehensive examination.
• Medical decision making of high complexity, furnished in real time using interactive audio and video
technology. Counseling and coordination of care with
other physicians, other qualified healthcare professionals or agencies are provided consistent with the
nature of the problem(s) and the needs of the patient
or the family or both. Usually, the presenting problem(s) are of moderate to high severity. Typically, 40
minutes are spent with the patient or family or both
via real time, audio and video intercommunications
technology.
F. Clinician Engagement Lists
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Remote E/M est. pt 25 mins ....
99214
Remote E/M est. pt 40 mins ....
99215
§ 414.1425(a)(2) of the agency’s Quality
Payment Program regulations. As such,
the Affiliated Practitioner List for the
CJR model is the ‘‘CMS-maintained list’’
of eligible clinicians that have ‘‘a
contractual relationship with the
Advanced APM Entity [for CJR, the
participant hospital] for the purposes of
supporting the Advanced APM Entity’s
quality or cost goals under the
Advanced APM.’’ As specified in our
regulations at § 414.1425(a)(2), CMS will
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those of the corresponding
office/outpatient E/M visit
CPT code for same calendar
year under the PFS; PE
RVUs equal to the facility
values for each
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use this list to identify the eligible
clinicians who will be assessed as
Qualifying APM Participants (QPs) for
the year. CMS will make QP
determinations individually for these
eligible clinicians as specified in
§§ 414.1425(b)(2), (c)(4), and 414.1435.
In the EPM final rule, we stated that
a list of physicians, nonphysician
practitioners, or therapists in a sharing
arrangement, distribution arrangement,
or downstream distribution
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arrangement, as applicable, would be
considered an Affiliated Practitioner
List of eligible clinicians who are
affiliated with and support the
Advanced APM Entity in its
participation in the Advanced APM for
purposes of the Quality Payment
Program. An in-depth discussion of how
the clinician financial arrangement list
is considered an Affiliated Practitioner
List can be found in section V.O. of the
EPM final rule (82 FR 558 through 563).
The clinician financial arrangements list
(§ 510.120(b)) will be used by CMS to
identify eligible clinicians for whom we
would make a QP determination based
on services furnished through the
Advanced APM track of the CJR model.
2. Proposed Clinician Engagement List
Requirements
To increase opportunities for eligible
clinicians supporting CJR model
participant hospitals by performing CJR
model activities and who are affiliated
with participant hospitals to be
considered QPs, we proposed that each
physician, nonphysician practitioner, or
therapist who is not a CJR collaborator
during the period of the CJR model
performance year specified by CMS, but
who does have a contractual
relationship with the participant
hospital based at least in part on
supporting the participant hospital’s
quality or cost goals under the CJR
model during the period of the
performance year specified by CMS,
would be added to a clinician
engagement list.
In addition to the clinician financial
arrangement list that is considered an
Affiliated Practitioner List for purposes
of the Quality Payment Program, we
proposed the clinician engagement list
would also be considered an Affiliated
Practitioner List. The clinician
engagement list and the clinician
financial arrangement list would be
considered together an Affiliated
Practitioner List and would be used by
CMS to identify eligible clinicians for
whom we would make a QP
determination based on services
furnished through the Advanced APM
track of the CJR model. As specified in
§ 414.1425, as of our regulations,
adopted in the Calendar Year (CY) 2017
Quality Payment Program final rule (81
FR 77551), those physicians,
nonphysician practitioners, or therapists
who are included on the CJR model
Affiliated Practitioner List as of March
31, June 30, or August 31 of a QP
performance period would be assessed
to determine their QP status for the year.
As discussed in the 2017 Quality
Payment Program final rule (81 FR
77439 and 77440), for clinicians on an
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Affiliated Practitioner List, we
determined whether clinicians meet the
payment amount or patient count
thresholds to be considered QPs (or
Partial QPs) for a year by evaluating
whether individual clinicians on an
Affiliated Practitioner List have
sufficient payments or patients flowing
through the Advanced APM; we do not
make any determination at the APM
Entity level for Advanced APMs in
which eligible clinicians are not
identified on a Participation List, but are
identified on an Affiliated Practitioner
List. CMS makes the QP determination
based on Part B claims data, so
clinicians need not track or report
payment amount or patient count
information to CMS.
We noted that the proposal to
establish a clinician engagement list
would broaden the scope of eligible
clinicians that are considered Affiliated
Practitioners under the CJR model to
include those without a financial
arrangement under the CJR model but
who are either directly employed by or
contractually engaged with a participant
hospital to perform clinical work for the
participant hospital when that clinical
work, at least in part, supports the cost
and quality goals of the CJR model. We
proposed that the cost and quality goals
of the additional affiliated practitioners
who are identified on a clinician
engagement list because they are
contracted with a participant hospital
must include activities related to CJR
model activities. CJR model activities
are activities related to promoting
accountability for the quality, cost, and
overall care for beneficiaries during
LEJR episodes included in the CJR
model, including managing and
coordinating care; encouraging
investment in infrastructure, enabling
technologies, and redesigned care
processes for high quality and efficient
service delivery; the provision of items
and services during a CJR episode in a
manner that reduces costs and improves
quality; or carrying out any other
obligation or duty under the CJR model.
Like the requirements of the clinician
financial arrangement lists specified at
§ 510.120(b), for CMS to make QP
determinations for eligible clinicians
based on services furnished through the
CJR Advanced APM track, we would
require that accurate information about
each physician, non-physician
practitioner, or therapist who is not a
CJR collaborator during the period of the
CJR model performance year specified
by CMS, but who is included on a
clinician engagement list, be provided
to CMS in a form and manner specified
by CMS on a no more than quarterly
basis. Thus, we proposed that each
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participant hospital in the Advanced
APM track of the CJR model submit to
CMS a clinician engagement list in a
form and manner specified by CMS on
a no more than quarterly basis. We
proposed this list must include the
following information on eligible
clinicians for the period of the CJR
model performance year specified by
CMS:
• For each physician, non-physician
practitioner, or therapist who is not a
CJR collaborator during the period of the
CJR model performance year specified
by CMS but who does have a
contractual relationship with a
participant hospital based at least in
part on supporting the participant
hospital’s quality or cost goals under the
CJR model during the period of the CJR
model performance year specified by
CMS:
++ The name, TIN, and NPI of the
individual.
++ The start date and, if applicable,
the end date for the contractual
relationship between the individual and
participant hospital.
Further, we proposed that if there are
no individuals that meet the
requirements to be reported, as specified
in any of § 510.120 (b)(1) through (3) of
the EPM final rule or § 510.120(c) of the
August 17, 2017 proposed rule (82 FR
39310 through 39333), the participant
hospital must attest in a form and
manner required by CMS that there are
no individuals to report.
Given that the proposal would require
submission of a clinician engagement
list, or an attestation that there are no
eligible clinicians to be included on
such a list, to reduce burden on
participant hospitals, we would collect
information for the clinician
engagement list and clinician financial
arrangement list at the same time.
We sought comments on the proposal
for submission of this information. We
noted that we were especially interested
in comments about approaches to
information submission, including the
periodicity and method of submission to
CMS that would minimize the reporting
burden on participant hospitals while
providing CMS with sufficient
information about eligible clinicians to
facilitate QP determinations.
For each participant hospital in the
CJR Advanced APM track, we proposed
that the participant hospital must
maintain copies of its clinician
engagement lists and supporting
documentation (that is, copies of
employment letters or contracts) of its
clinical engagement lists submitted to
CMS. Because we would use these lists
to develop Affiliated Practitioner Lists
used for purposes of making QP
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determinations, these documents would
be necessary to assess the completeness
and accuracy of materials submitted by
a participant hospital and to facilitate
monitoring and audits. For the same
reason, we further proposed that the
participant hospital must retain and
provide access to the required
documentation in accordance with
§ 510.110.
Comment: Many commenters
supported our proposal to broaden the
scope of eligible clinicians that could be
considered Affiliated Practitioners
under the CJR model and therefore
eligible for the incentives available
under the Advanced APM track of the
Quality Payment Program. Commenters
urged CMS to finalize the policy as
proposed, stressing the importance of
providing further opportunities for
clinician groups to engage in more
comprehensive risk-based Advanced
APMs as an alternative to MIPS
reporting. Commenters also stated that a
significant number of healthcare
clinicians support participant hospitals
but their efforts are not accounted for by
CMS, despite the critical importance of
the care they deliver to patients
included within the CJR model. These
commenters noted that expanding the
number of Affiliated Practitioners will
help to recognize the efforts of those
clinicians while also enhancing access
to care under the CJR model.
Response: We appreciate the positive
feedback on the proposed policy, and
agree with commenters that increasing
opportunities for clinicians in a
contractual relationship with Advanced
APM participant hospitals is valuable.
We agree that the work these clinicians
perform on CJR model activities is
essential to the success of care under the
CJR model and that we should be
recognizing the efforts of these
clinicians by providing them the
opportunity to qualify as qualified
practitioners under the Quality Payment
Program.
Comment: A commenter requested
that CMS provide clarification on the
definition of contractual agreements,
and that CMS provide further guidance
on how CJR-related activities will be
monitored and whether there will be
any thresholds that clinicians must meet
to be considered engaged in the quality
or costs goals of CJR.
Response: To clarify, for each
physician, non-physician practitioner,
or therapist who is not a CJR
collaborator during the period of the CJR
model performance year specified by
CMS, but who does have a contractual
relationship with the participant
hospital based at least in part on
supporting the participant hospital’s
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quality or cost goals under the CJR
model during the period of the
performance year as specified by CMS,
can be included on the hospital’s
clinician engagement list. The term
contractual relationship encompasses
the wide range of relationships whereby
a participant hospital engages a
clinician to perform work that at least in
part supports the cost and quality goals
of the CJR model
CMS will monitor compliance with
the requirement that clinicians be
engaged to support cost and quality
goals via a range of methods, including
but not limited to document reviews
and site visits.
CMS is not establishing a specific
threshold a clinician must met to be
considered engaged in supporting the
cost and quality goals of the CJR model.
Comment: Several commenters
objected to the requirement that
hospitals include a clinician’s start and
end date on the clinician engagement
list, noting a start date is not feasible
because the clinician’s employment may
have started before the start of the CJR
model and may not have end-dates but
rather automatically renew.
Commenters also stated that
maintaining and submitting a clinician
engagement list is burdensome. The
commenters suggested that hospitals
should attest that the clinician was
under contract during the model, and
that CMS could conduct audits to verify
this information.
Response: We appreciate commenters’
feedback on this requirement for
submitting the clinician engagement
list. The requirement that a hospital
include the clinician’s start date at a
minimum will allow CMS to determine
whether the clinician is an eligible
clinician for Quality Payment Program
purposes; a simple attestation will not
suffice for the Quality Payment
Program. We understand that clinicians
may have begun the contractual
relationship with the hospital prior to
the start of the CJR model. However, the
hospital will have to determine whether
and when the contractual relationship
with the clinician began supporting the
participant hospital’s quality or cost
goals under the CJR model. The hospital
would then report to CMS the date on
which the relationship began supporting
the cost and quality goals of the CJR
model. For example, if a physician
started working at the participant
hospital on 1/1/2000 and started
supporting the participant hospital’s
quality or cost goals under the CJR
model on 7/15/2016, the hospital would
report 7/15/2016. The end date of the
contractual relationship need only be
supplied if the clinician has one. Also,
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57089
we understand that maintaining a list
can be burdensome; however, we
developed this requirement in response
to feedback from stakeholders and
hospitals who expressed a desire to
enhance opportunities for those
physicians, non-physician practitioners,
and therapists without a financial
arrangement under the CJR model.
Finally, in order to reduce burden, CMS
will collect information for the clinician
financial arrangement list and the
clinician engagement list together.
Hospitals will be able to complete all
required attestations at one time.
Summary of Final Decisions: We
thank the commenters for their
suggestions and feedback. We are
finalizing our policy as proposed. This
policy is codified at § 510.120(c)
through (e).
G. Clarification of Use of Amended
Composite Quality Score Methodology
During CJR Model Performance Year 1
Subsequent Reconciliation
We conducted the initial
reconciliation for performance year 1 of
the CJR model in early 2017 and made
reconciliation payments to CJR
participant hospitals in fall 2017 to
accommodate the performance year 1
appeals process timelines. We will
conduct the subsequent reconciliation
calculation for performance year 1 of the
CJR model beginning in the first quarter
of 2018, which may result in additional
amounts to be paid to participant
hospitals or a reduction to the amount
that was paid for performance year 1.
However, the results of the performance
year 1 subsequent reconciliation
calculations will be combined with the
performance year 2 initial reconciliation
results before reconciliation payment or
repayment amounts are processed for
payment or collection. Changes to the
CJR model established in the EPM final
rule impact this process.
The improvements to the CJR model
quality measures and composite quality
score methodology, which were
finalized in the EPM final rule (82 FR
524 through 526), were intended to be
effective before the CJR model’s
performance year 1 initial
reconciliation. However, as noted in
section II. of the proposed rule (82 FR
39311), the effective date for certain
EPM final rule provisions, including
those amending §§ 510.305 and 510.315
to improve the quality measures and
composite quality score methodology,
were delayed until May 20, 2017.
As a result, the CJR reconciliation
reports issued in April 2017 were
created in accordance with the
provisions of §§ 510.305 and 510.315 in
effect as of April 2017; that is, the
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provisions finalized in the CJR model
final rule. In early 2018, we would
perform the performance year 1
subsequent reconciliation calculation in
accordance with the provisions
§§ 510.305 and 510.315 in effect as of
early 2018, that is, established in the
EPM final rule. Applying the provisions
established in the EPM final rule to the
performance year 1 subsequent
reconciliation calculation may result in
significant differences between the
reconciliation payments calculated
during the performance year 1 initial
reconciliation and the performance year
1 subsequent reconciliation. We
anticipate that these differences will be
greater than those that would be
expected as a result of using more
complete claims and programmatic data
that will be available for the subsequent
reconciliation (due to the additional 12
months of time that will occur between
the initial and subsequent reconciliation
calculations), more accurate
identification of model overlap and
exclusion of episodes, as well as
factoring in adjustments to account for
shared savings payments, and postepisode spending, as specified in
§ 510.305(i).
Specifically, the methodology used to
determine the quality-adjusted target
price for the performance year 1
subsequent reconciliation calculation
would differ from the methodology used
to determine the quality-adjusted target
price for the performance year 1 initial
reconciliation calculation as follows:
The quality-adjusted target price would
be recalculated to apply the amended
reductions to the effective discount
factors (§ 510.315(f)), which would be
determined after recalculating the
composite quality scores, including
applying more generous criteria for
earning quality improvement points
(that is, a 2 decile improvement rather
than 3 decile improvement as specified
in amended § 510.315(d)). Using the
recalculated quality-adjusted target
price, the net payment reconciliation
amount (NPRA) would be recalculated
and include application of post-episode
spending reductions (§ 510.305(j)), as
necessary, after determining the
limitations on loss or gain. Thus,
calculating performance year 1
reconciliation payments using these two
different provisions may result in a
range of upward or downward
adjustments to participant hospitals’
performance year 1 payment amounts.
We note that a downward adjustment to
the performance year 1 payment
amounts would require payment
recoupment, if offset against a
performance year 2 initial reconciliation
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payment amount is not feasible, which
may be burdensome for participant
hospitals.
In developing the August 17, 2017
proposed rule (82 FR 39310 through
39333), we also considered whether
there might be benefit in further
delaying the amendments to §§ 510.305
and 510.315 such that the same
calculations would be used for both the
performance year 1 initial reconciliation
and the subsequent performance year 1
reconciliation, and the use of the
amended calculations would begin with
the performance year 2 initial
reconciliation. We noted that we believe
such an approach would impact future
CJR model implementation and
evaluation activities. Because
determining the performance year 2
composite quality score considers the
hospital’s quality score improvement
from its performance year 1 score, using
different methodologies across
performance years would require a
mechanism to account for differences in
the quality score methodology, for
example we would have to develop a
reliable crosswalk approach. If we were
to develop and use a crosswalk
approach, participants and other
stakeholders would need to be informed
about the crosswalk methodology in
order to validate data analyses across
performance years and that usage of the
crosswalk would be ongoing throughout
the model’s duration for consistency
across performance years. This
methodology could add substantial
complexity to this time-limited model.
We also considered that the composite
quality score for some participant
hospitals may be higher under the
revised scoring methodology. Delaying
use of the revised scoring methodology
may disadvantage participants if their
composite quality score would be higher
and result in a more favorable discount
percentage or allow the hospital to
qualify for a reconciliation payment.
Therefore, we believed the best
approach was to apply the quality
specifications as established in the EPM
final rule (that is, the amendments to
§§ 510.305 and 510.315 that became
effective May 20, 2017) to performance
year 1 subsequent reconciliation
calculations to ensure that
reconciliation calculations for
subsequent performance years will be
calculated using the same methodology
and to improve consistency across
performance years for quality
improvement measurement. Thus, for
the reasons noted previously, we did
not propose to change the amendments
to §§ 510.305 and 510.315 that became
effective May 20, 2017. We sought
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comment on whether using an
alternative approach, such as the
composite quality score methodology
from the CJR model final rule for the
performance year 1 subsequent
reconciliation, would ensure better
consistency for analyses across CJR
performance years.
Comment: We received several
comments supporting our proposal to
apply the quality specifications as
established in the EPM final rule (that
is, the amendments to §§ 510.305 and
510.315 that became effective May 20,
2017) to performance year 1 subsequent
reconciliation calculations. Several
commenters favored this approach
because they believed it was unlikely
for a hospital’s quality category to
decrease between the initial and
subsequent reconciliation. A commenter
favored applying the EPM final quality
specifications to performance year 1
subsequent reconciliation calculations
because they believed applying more
generous criteria for earning quality
improvement points and using a more
appropriate national peer group as the
reference for determining performance
would result in higher composite
quality scores. The commenter stated
that these higher composite quality
scores would allow more CJR
participant hospitals to be eligible for
reconciliation payments or to owe
smaller repayments and would preserve
the ability for high-performing hospitals
to earn reconciliation payments that
more accurately reflect their
performance and investments in the
model. The commenter noted that
transitioning to the revised composite
quality score methodology between the
performance year 1 initial and
subsequent reconciliation calculations
may increase the differences between
the results of the two calculations than
would otherwise have occurred during
subsequent reconciliation due to the
anticipated longer claims run out,
accounting for model overlap, and postepisode spending adjustments. They
stated that the difference would vary by
hospital, and could be positive or
negative. The commenter clarified that
the impact of any larger downward
adjustments, however, should occur in
performance year 1, when hospitals are
not responsible for repayments to CMS
if their costs exceed their qualityadjusted target price. Finally, the
commenter stated that delaying
implementation of the EPM final quality
specifications until performance year 2
initial reconciliation calculations would
increase CJR operational complexity and
complicate evaluation of CJR model
results. The commenter urged CMS to
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share results from the performance year
1 subsequent reconciliation with
participant hospitals as early as feasible
in 2018 to minimize uncertainty for
hospitals, should a downward
adjustment occur.
Response: We appreciate the feedback
we received from commenters on the
benefits of applying the quality
specifications as established in the EPM
final rule to performance year 1
subsequent reconciliation calculations,
and we thank the commenters for their
support of our proposed policy. We
agree there are benefits to applying the
EPM final rule quality specifications to
performance year 1 subsequent
reconciliation calculations instead of
delaying use of the amended
specifications until initial reconciliation
for performance year 2. These benefits
include reducing the complexity of
future evaluation of the model and
preventing possibly disadvantaging
participants whose composite quality
scores would be higher as a result of
applying the amended specifications.
Comment: Several commenters
opposed our proposal to apply the
quality specifications established in the
EPM final rule to performance year 1
subsequent reconciliation calculations.
A commenter stated that a hospital’s
payment should not be adjusted for
performance year 1 as a result of
administrative issues, such as the delay
of the effective date for the EPM final
rule, which occurred between the initial
reconciliation and the subsequent
reconciliation for performance year 1.
Response: We appreciate the
commenters’ concerns regarding
possible downward adjustments to the
performance year 1 payment amounts
that would require repayment
recoupment. We intended for the
refinements to the CJR model quality
measures and composite quality score
methodology finalized in the EPM final
rule (82 FR 524 through 526) to be
effective before the CJR model’s
performance year 1 initial
reconciliation. We acknowledge that the
delayed effective date for the EPM final
rule has caused frustration, and we
acknowledge that a downward
adjustment requiring payment
recoupment would be burdensome for
participant hospitals.
For these reasons, we sought
comment on whether using an
alternative approach, such as applying
the quality composite score
methodology from the CJR model final
rule to the performance year 1
subsequent reconciliation, would ensure
better consistency for analyses across
performance years. Commenters
generally supported our proposal to
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apply the quality specifications as
established in the EPM final rule.
Furthermore, we believe that the
benefits to hospitals of applying the
quality specifications finalized in the
EPM final rule to performance year 1
subsequent reconciliation justify
finalizing our proposal. This approach
ensures that reconciliation calculations
for subsequent performance years will
be calculated using the same
methodology, eliminating the need for a
the development of a crosswalk
approach for reconciling differences in
composite quality scores across
performance years and reducing the
impact on future model evaluation
efforts.
Comment: Several commenters
provided out-of-scope public comments
that suggested changes to the composite
quality score methodology, the choice of
quality measures in the EPM and CJR
models, and the patient reported
outcomes (PRO) data submission.
Several commenters believed the
revised composite quality score
methodology was not in the best interest
of model success, and CMS was
inaccurate in stating that the changes to
the composite quality score would
result in a higher composite quality
score for some participant hospitals.
Several commenters suggested we
include, replace, or drop some or all of
the finalized quality measures. Finally,
a commenter stated that CMS did not
provide sufficient supporting rationale
for determinations regarding patientreported outcomes (PRO) data
submission, nor did CMS provide clear
information on which patients were
eligible for PRO data collection. This
commenter requested that CMS provide
hospitals with lists of PRO-eligible
patients on a regular basis.
Response: We consider these public
comments to be outside of the scope of
the August 17, 2017 proposed rule.
Therefore, we are not addressing them
in this final rule and interim final rule
with comment period. We may consider
these public comments in future
rulemaking. We do note that a number
of resource guides on the PRO data
collection process and eligible patients
is available to CJR participant hospitals
on the CJR Connect site.
Summary of Final Decisions: We are
finalizing our proposal to apply the
quality specifications as established in
the EPM final rule (that is, the
amendments to §§ 510.305 and
§ 510.315 that became effective May 20,
2017) to performance year 1 subsequent
reconciliation calculations.
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H. Clarifying and Technical Changes
Regarding the Use of the CMS Price
(Payment) Standardization Detailed
Methodology
Based on questions we received from
participant hospitals during the
performance year 1 reconciliation
process, we proposed to make two
technical changes to the CJR model
regulations to clarify the use of the CMS
Price (Payment) Standardization
Detailed Methodology, posted on the
QualityNet Web site at https://
www.qualitynet.org/dcs/Content
Server?c=Page&pagename=Qnet
Public%2FPage%2FQnetTier4&cid=
1228772057350, in the calculation of
target prices and actual episode
spending. This pricing standardization
approach was the same as that used for
the Hospital Value-Based Purchasing
Program’s (HVBP) Medicare spending
per beneficiary metric. In section
III.C.3.a. of the CJR model final rule (80
FR 73331 through 73333), we finalized
how we would operationalize the
exclusion of the various special
payment provisions in calculating CJR
model episode expenditures, both
historical episode spending and
performance year episode spending, by
relying upon the CMS Price (Payment)
Standardization Detailed Methodology
with modifications. However, we did
not clearly articulate the finalized
policy in the regulations at 42 CFR part
510. Thus, we proposed the following
technical changes to bring the regulatory
text into conformity with our intended
policy and to reduce potential
stakeholder uncertainty about how the
price (payment) standardization
methodology is used. We proposed to
insert ‘‘standardized’’ into the definition
of actual episode payment in § 510.2,
and insert ‘‘with certain modifications’’
into § 510.300(b)(6) to account for the
modifications we must make to the
standardization methodology to ensure
all pricing calculations are consistent
with our finalized policies.
Comment: We received no comments
on our proposal.
Response: We are finalizing our
proposal to insert ‘‘standardized’’ into
the definition of actual episode payment
in § 510.2, and insert ‘‘with certain
modifications’’ into § 510.300(b)(6).
I. Public Comments on Removal of Total
Knee Arthroplasty (TKA) From the
Inpatient-Only (IPO) List and on the
Need for a Disaster Policy for Affected
CJR Episodes
1. Pricing Implications of the Removal
of TKA From the IPO List
In the CY 2017 Outpatient Prospective
Payment System (OPPS) Proposed Rule
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(81 FR 45679 through 45681) we sought
comment on the potential removal of
TKA from the IPO list from interested
parties, although we did not make any
proposals regarding the issue. We
specifically requested input on potential
changes to the BPCI initiative and CJR
model if we should make such a policy
change in the future. In the CY 2018
Outpatient Prospective Payment System
(OPPS) Proposed Rule (82 FR 33558),
we proposed to remove total knee
arthroplasty from the IPO list. We refer
readers to that proposed rule for more
details regarding the proposal.
Comment: Numerous commenters
requested that, should we finalize the
proposal to remove TKA from the IPO
list, we also finalize a policy to modify
the CJR pricing methodology.
Commenters stated that if TKA is
removed from the IPO list, the CJR target
prices will no longer accurately reflect
spending for the inpatient population,
given that the historical time period
used to set prices included all Medicare
TKA cases under MS–DRGs 469 and
470, including those that could be
performed on an outpatient basis (and
are presumably less costly) if TKA is
removed from the IPO list. Commenters
were concerned that if Medicare begins
to pay for TKA in outpatient settings
and does not make adjustments to CJR
prices, the case mix under the model
(that is, beneficiaries in CJR episodes)
will include only more costly and
higher-acuity cases that are not
appropriate for outpatient settings.
Thus, LEJR procedures furnished in
inpatient settings (and included in CJR
episodes) will be more costly than those
in outpatient settings, negatively
affecting CJR hospitals’ potential to
financially succeed under the model.
Commenters noted that without a
pricing adjustment, CJR participant
hospitals could have a hard time
meeting spending targets if many lowercost cases move to the outpatient
setting. Commenters suggested a variety
of solutions, including: Setting a
separate target price for outpatient TKA
cases and including them in CJR;
various methodologies to estimate the
removal of outpatient cases from the
baseline period when setting target
prices; and robust risk adjustment. A
commenter suggested we test the
removal of TKA from the IPO list as part
of our bundled payment models before
implementing a change on a national
basis. Other commenters stated that
hospitals eligible for a voluntary
participation election in January 2018
cannot make a participation decision
without knowing how CMS will modify
the CJR pricing methodology to ensure
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participant hospitals are not negatively
affected by the removal of TKA from the
IPO list.
Response: We thank the commenters
for their feedback and thoughtful
suggestions on ways we could refine the
CJR pricing methodology to ensure our
decision to remove TKA from the IPO
list would not harm hospitals. We refer
readers to the 2018 OPPS Final Rule (82
FR 52356) which discusses our finalized
policy to remove TKA from the IPO list.
Because we did not make a proposal
regarding changes to the CJR payment
methodology and because there is no
clinical experience or claims data yet
available for analysis on the potential
impacts of this policy change on the CJR
target pricing methodology, we will
consider all comments and address this
issue through future rulemaking, as
appropriate.
2. Need for a Policy To Address the
Recent Hurricanes and Other Natural
Disasters
In late August and September 2017
several hurricanes created significant
damage to multiple states and in late
September 2017, severe wildfires
wreaked havoc on many counties in
California.
Comment: Several commenters
requested that CMS recognize the
unique challenges faced by CJR
participant hospitals during the recent
natural disasters that have occurred in
or near several of the CJR MSAs.
Commenters noted that beneficiaries in
disaster areas may have required
unplanned or extensive healthcare
services as a result of evacuation or
other emergency situations.
Commenters were also concerned that
hospitals in the disaster areas would not
be able to complete their quality
reporting requirements. Commenters
stated that CJR participant hospitals
should not be held financially
accountable for such spending that is
beyond their control. Commenters
suggested that CMS offer a waiver of the
participation requirement or another
mechanism to ensure that hospitals are
not held accountable for circumstances
beyond their control due to natural
disasters.
Response: We thank the commenters
for their suggestions. We understand
that some participant hospitals in the
CJR model have been impacted by
recent natural disasters and that there is
a clear need for a policy in CJR to
address expenditures outside the
control of hospitals located in areas
experiencing extreme and
uncontrollable circumstances.
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III. Provisions of the Interim Final Rule
With Comment Regarding Significant
Hardship Due to Extreme and
Uncontrollable Circumstances in the
CJR Model
A. Overview and Background
This interim final rule with comment
period is being issued in conjunction
with this final rule to address the need
for a policy that would apply for
performance year 2 (and, when
finalized, that would also apply for the
future performance years 3 through 5 of
the CJR model) providing some
flexibility in determining episode
spending for CJR participant hospitals
located in areas impacted by extreme
and uncontrollable circumstances. This
interim final rule with comment period
most notably addresses Hurricane
Harvey, Hurricane Irma, Hurricane Nate,
and the California wildfires of August,
September, and October 2017 but could
also include other similar events that
occur within a given performance year,
including performance year 2, if those
events meet the requirements we are
setting forth in this policy in this
interim final rule with comment. While
Hurricane Maria, which also occurred in
the same time frame, had and, as of the
writing of this rule, continues to have a
significant and crippling effect on
Puerto Rico and the U.S. Virgin Islands,
Hurricane Maria is not part of this
particular interim final rule with
comment as the CJR model is not in
operation in the areas impacted by
Hurricane Maria, and, therefore there
are no CJR participant hospitals that
have been impacted by Hurricane Maria.
Hurricane Harvey, Hurricane Irma,
Hurricane Nate, and the California
wildfires affected large regions of the
United States where the CJR model
operates, leading to widespread
destruction of infrastructure that
impacted residents’ ability to continue
normal functions afterwards.
At least 101 CJR participant hospitals
are located in the areas affected by
Hurricane Irma and Hurricane Harvey,
at least 22 CJR participant hospitals are
located in areas impacted by the
California wildfires and approximately
12 are in the areas affected by Hurricane
Nate. Based on a review of news articles
focusing on the hurricanes, at least 35
hospitals evacuated for Hurricane Irma 1
and several hospitals evacuated at least
partially for Hurricane Harvey.2 In
1 Irma forces at least 35 hospitals to evacuate
patients. Here’s a rundown. September 9, 2017.
https://www.statnews.com/2017/09/09/irmahospital-evacuations-rundown/. Accessed
November 21, 2017.
2 After Harvey Hit, a Texas Hospital Decided to
Evacuate. Here’s How Patients Got Out. September
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Florida, at least two CJR participant
hospitals in Miami, (Anne Bates Leach
Eye Hospital and University of Miami
Hospital) and one CJR participant
hospital in Miami Beach—Mount Sinai
Medical Center—had to close because of
Hurricane Irma.3 Tampa General
Hospital, a CJR participant hospital in
Tampa, evacuated all patients except for
those too ill to move.4 In response to
Hurricane Irma, on September 9, 2017,
Tampa Community Hospital, CJR
participant hospital, suspended all
services and evacuated all patients to
two other CJR participant hospitals,
Brandon Regional Hospital and Medical
Center of Trinity.5 In Texas, Baptist
Beaumont Hospital, a CJR participant
hospital in Beaumont, Texas, had to
shut down and evacuate on August 31,
2017.6 On the same day, Christus
Southeast Texas St. Elizabeth, another
CJR participant hospital in Beaumont,
Texas, left only the emergency and
trauma center of the hospital open in
order to ensure they had enough water
for the patients still at the hospital.6
Patients seeking care at the Medical
Center of Southeast Texas, a CJR
participant hospital in Port Arthur,
Texas, had to be taken by dump truck
through the submerged hospital parking
lot to the perimeter of the property,
where a boat would take them to the
hospital.6 An additional review of news
related to California wildfires also
shows that the fires caused various
hospitals to evacuate patients.7 On
November 16, 2017, five counties in
Alabama were declared as major
disaster areas due to the destruction of
structures, piers, roads and bridges
caused by Hurricane Nate.3 Although
we do not yet have enough data to
evaluate these events’ specific effects on
CJR episodes, we anticipate that at least
some CJR participant hospitals may
have experienced episode cost
escalation as a result of hurricane or fire
6, 2017. https://www.nytimes.com/2017/09/06/us/
texas-hospital-evacuation.html. Accessed
November 21, 2017.
3 Hurricane Irma causes 36 Florida hospitals to
close. September 12, 2017. https://www.healthdata
management.com/news/hurricane-irma-causes-36florida-hospitals-to-close. Accessed November 22,
2017.
4 At Tampa Hospital in Evacuation Zone, 800
Patients and Staff Ride Out Hurricane Irma.
September 10, 2017. https://weather.com/storms/
hurricane/news/hurricane-irma-tampa-hospitalevacuation-zone. Accessed November 22, 2017.
5 Tampa Community Hospital has suspended all
services and has evacuated patients. September 9,
2017. https://tampacommunityhospital.com/about/
newsroom/tampa-community-hospital-hassuspended-all-services-and-has-evacuated-patients.
Accessed November 22, 2017.
3 https://www.al.com/news/mobile/index.ssf/2017/
11/trump_declares_major_disaster.html.
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damage and subsequent emergency
evacuations.
Under § 510.305(e), as of performance
year 2, CJR participant hospitals who
have episode costs as calculated under
§ 510.305(e)(1)(iii) (for example, episode
costs that exceed the target price for the
performance year) will owe CMS 5
percent of the loss. While the intent of
this policy is to incentivize providers to
control costs while managing and
improving the quality of CJR patient
care, we note that in extreme and
uncontrollable circumstances, prudent
patient care management may involve
potentially expensive air ambulance
transport or prolonged inpatient stays
when other alternatives are not practical
due, for example, to state and local
mandatory evacuation orders or
compromised infrastructure. In addition
to the news reports of disaster
conditions that impacted several CJR
participant hospitals, a number of
research studies on natural disasters and
rushed evacuations for hospitals
support our assumption that costs can
rise during disaster situations.4
Currently, CJR regulations at
§ 510.210 do not allow cancellation of
episodes for extreme and uncontrollable
circumstances. The CJR regulations at
§ 510.305 also do not permit an
adjustment to account for episode
spending that may have escalated
significantly due to events driven by
extreme and uncontrollable
circumstances.
B. Identifying Participant Hospitals
Affected by Extreme and Uncontrollable
Circumstances
For purposes of developing a policy to
identify hospitals affected by extreme
and uncontrollable circumstances, we
consulted section 1135 of the Social
Security Act, where the Secretary may
temporarily waive or modify certain
Medicare requirements to ensure that
sufficient health care items and services
are available to meet the needs of
individuals enrolled in Social Security
Act programs in the emergency area and
time periods and that providers who
provide such services in good faith can
be reimbursed and exempted from
sanctions (absent any determination of
fraud or abuse). The Secretary has
invoked this authority in response to
significant natural disasters such as
4 Tia
Powell, Dan Hanfling, Lawrence O. Gostin.
Emergency Preparedness and Public Health: The
Lessons of Hurricane Sandy. JAMA.
2012;308(24):2569–2570. doi:10.1001/
jama.2012.108940; Christine S. Cocanour, Steven J.
Allen, Janine Mazabob, John W. Sparks, Craig P.
Fischer, Juanita Romans, Kevin P. Lally. Lessons
Learned From the Evacuation of an Urban Teaching
Hospital. Arch Surg.2002;137(10):1141–1145.
doi:10.1001/archsurg.137.10.1141.
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57093
Hurricane Katrina in 2005 and
Superstorm Sandy in 2012. Though the
1135 waiver authority enables us to take
actions that give healthcare providers
and suppliers greater flexibility, it does
not allow for payment adjustment for
participant hospitals in the CJR model.
However, the extreme and
uncontrollable circumstance policy
should only apply when a disaster is
widespread and extreme. A section 1135
waiver identifies the ‘‘emergency area’’
and ‘‘emergency period,’’ as defined in
section 1135(g) of the Social Security
Act, for which waivers are available. We
believe it is appropriate to establish an
extreme and uncontrollable
circumstance policy that applies only
when and where the magnitude of the
event calls for the use of special waiver
authority to help providers respond to
the emergency and continue providing
care.
The extreme and uncontrollable
circumstance policy also should be
tailored to the specific areas
experiencing the extreme and
uncontrollable circumstance. Section
1135 waivers typically are authorized
for a geographic area that may
encompass a greater region than is
directly and immediately affected by the
relevant emergency. For purposes of this
policy, a narrower geographic scope
than the full emergency area (as that
term is defined in section 1135(g) of the
Act) 5 would ensure that the payment
policy adjustment is focused on the
specific areas that experienced the
greatest adverse effects from the extreme
and uncontrollable circumstance and is
not applied to areas sustaining little or
no adverse effects.
To narrow the scope of this policy to
ensure it is applied to those providers
most likely to have experienced the
greatest adverse effects, we would
therefore also require that the area be
declared as a major disaster area under
the Stafford Act, which serves as a
condition precedent for the Secretary’s
exercise of the 1135 waiver authority.
Once an area is declared as a major
disaster area under the Stafford Act, the
specific counties, municipalities,
parishes, territories, and tribunals that
are part of the major disaster area are
identified and can be located on Federal
Emergency Management Agency
5 (g) DEFINITIONS.—For purposes of this section:
(1) EMERGENCY AREA; EMERGENCY PERIOD.—
An ‘‘emergency area’’ is a geographical area in
which, and an ‘‘emergency period’’ is the period
during which, there exists—(A) an emergency or
disaster declared by the President pursuant to the
National Emergencies Act[102] or the Robert T.
Stafford Disaster Relief and Emergency Assistance
Act[103]; and (B) a public health emergency
declared by the Secretary pursuant to section 319
of the Public Health Service Act.
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(FEMA) Web site at www.FEMA.gov/
disasters. For this policy, only major
disaster declarations under the Stafford
Act will be used to identify the specific
counties, municipalities, parishes,
territories, and tribunals where the
extreme and uncontrollable
circumstance took place. Using the
major disaster declaration as a
requirement for the extreme and
uncontrollable event policy also ensures
that the policy would apply only when
the event is extreme, meriting the use of
special authority, and targeting the
specific area affected by the extreme and
uncontrollable circumstance. To note,
we are not including emergency
declarations under the Stafford Act or
national emergency declarations under
the National Emergencies Act in this
policy, even if such a declaration serves
as a basis for the Secretary’s invoking
the 1135 waiver authority. This is
because we believe it is appropriate for
our extreme and uncontrollable
circumstance policy to apply only in the
narrow circumstance where the
circumstance constitutes a major
disaster, which are more catastrophic in
nature and tend to have significant
impacts to infrastructure, rather than the
broader grounds for which an
emergency could be declared.
In establishing a policy to define
extreme and uncontrollable
circumstances for the CJR model, we
identify an area as having experienced
‘extreme and uncontrollable
circumstances,’ if it is within an
‘‘emergency area’’ and ‘‘emergency
period’’ as defined in section 1135(g) of
the Act, and also is within a county,
parish, U.S. territory or tribal
government designated in a major
disaster declaration under the Stafford
Act that served as a condition precedent
for the Secretary’s exercise of the 1135
waiver authority.
We believe Hurricanes Harvey, Irma,
and Nate and the recent California
wildfires trigger the automatic extreme
and uncontrollable circumstance policy
we are adopting in this interim final
rule with comment period. For the
performance year 2 reconciliation that
will be conducted beginning in March
of 2018, this extreme and uncontrollable
circumstance policy will apply to those
CJR participant hospitals whose CCN
has a primary address located in a state,
U.S. territory, or tribal government that
is within an ‘‘emergency area’’ and
‘‘emergency period,’’ as those terms are
defined in section 1135(g) of the Act, for
which the Secretary has issued a waiver
under section 1135 of the Act and that
is designated in a major disaster
declaration under the Stafford Act that
served as a condition precedent for the
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Secretary’s exercise of the 1135 waiver
authority. The states and territories for
which section 1135 waivers were issued
in response to Hurricanes Harvey, Irma,
Nate and the California wildfires are
Alabama, California, Florida, Georgia,
South Carolina, Texas, Louisiana,
Mississippi. Section 1135 waivers also
were issued for Puerto Rico and the
Virgin Islands as a result of Hurricane
Maria, but there are no CJR participant
hospitals with CCNs with a primary
address in either of these areas. To view
the 1135 waiver documents and for
additional information on section 1135
waivers see: https://www.cms.gov/
About-CMS/Agency-Information/
Emergency/. The major disaster
declarations are located on FEMA Web
site at https://www.fema.gov/disasters.
When locating the counties,
municipalities, parishes, tribunals, and
territories for the major disaster
declaration, FEMA designates these
locations as ‘designated areas’ for that
specific state, or tribunal. All counties,
municipalities, parishes, tribunals, and
territories identified as designated areas
on the disaster declaration are included.
The counties, parishes, and tribal
governments that have met the criteria
for the CJR policy on extreme and
uncontrollable events in performance
year 2 are: 6
• The following counties in Alabama:
Autauga, Baldwin, Choctaw, Clarke,
Dallas, Macon, Mobile, and
Washington.7
The following counties in California:
Butte; Lake; Mendocino; Napa; Nevada
Orange; Sonoma; and Yuba.8
• All 67 counties 9 and Big Cypress
Indian Reservation, Brighton Indian
Reservation, Fort Pierce Indian
Reservation, Hollywood Indian
Reservation, Immokalee Indian
Reservation, Tampa Reservation in
Florida.10
• All 159 counties in Georgia.11
• All 46 counties, and the Catawba
Indian Reservation in South Carolina.12
• The following counties in Texas:
Aransas; Austin; Bastrop; Bee; Bexar;
6 The Secretary issued Mississippi a waiver under
Section 1135 for Hurricane Nate, however the
President did not issue a major disaster declaration
(An emergency disaster declaration was issued.), so
under this policy Mississippi is not included on
this list.
7 https://www.fema.gov/disaster/4349/designatedareas.
8 https://www.fema.gov/disaster/4344/designatedareas.
9 https://www.fema.gov/disaster/4337/designatedareas.
10 https://www.fema.gov/disaster/4341/
designated-areas.
11 https://www.fema.gov/disaster/4338/
designated-areas.
12 https://www.fema.gov/disaster/4346/
designated-areas.
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Brazoria; Calhoun; Chambers; Colorado;
Dallas; Dewitt; Fayette; Fort Bend;
Galveston; Goliad; Gonzales; Hardin;
Harris; Jackson; Jasper; Jefferson;
Karnes; Kleberg; Lavaca; Lee; Liberty;
Matagorda; Montgomery; Newton;
Nueces; Orange; Polk; Refugio; Sabine;
San Jacinto; San Patricio; Tarrant;
Travis; Tyler; Victoria; Walker; Waller;
and Wharton.13
• The following parishes in
Louisiana: Acadia; Allen; Assumption;
Beauregard; Calcasieu; Cameron; De
Soto; Iberia; Jefferson Davis; Lafayette;
Lafourche; Natchitoches; Plaquemines;
Rapides; Red River; Sabine; St. Charles;
St. Mary; Vermilion; and Vernon.14
Using these criteria, CMS was able to
identify at least 101 CJR participant
hospitals located in the areas affected by
Hurricanes Harvey and Hurricane Irma,
approximately 12 CJR participant
hospitals in the areas affected by
Hurricane Nate, and at least 22 CJR
participant hospitals in areas impacted
by the California wildfires. As there are
no CJR model areas in Puerto Rico or the
U.S. Virgin Islands, we note that no CJR
participant hospitals were impacted by
Hurricane Maria. CMS will notify
providers for whom this extreme and
uncontrollable circumstances policy
will apply for performance year 2 (and
subsequent performance years if and
when the policy is invoked) via the
initial reconciliation reports CMS
delivers to providers upon completion
of the reconciliation calculations, which
under § 510.305(d) are initiated
beginning 2 months after the close of the
performance year.
Though the Hurricanes and California
wildfires were the driving force for
developing the extreme and
uncontrollable circumstance policy, this
policy is being implemented for the
duration of the CJR model, and we are
amending the CJR regulations
accordingly, as further outlined later.
B. Provisions for Adjusting Episode
Spending Due to Extreme and
Uncontrollable Circumstances
Without a policy to provide CJR
participant hospitals some flexibility in
extreme and uncontrollable
circumstances, we might inadvertently
create an incentive to place cost
considerations above patient safety,
especially in the later years of the CJR
model when the downside risk
percentage increases. In considering
policy alternatives to help ensure
beneficiary protections by mitigating
13 https://www.fema.gov/disaster/4332/
designated-areas.
14 https://www.fema.gov/disaster/4345/
designated-areas.
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participant hospitals’ financial liability
for costs resulting from extreme and
uncontrollable circumstances, we
considered and rejected a blanket
cancellation of all episodes occurring
during the relevant period. We do not
believe that a blanket cancellation
would be in either beneficiaries’ or CJR
participant hospitals’ best interests, as it
is possible that hospitals can manage
costs and earn a reconciliation payment
despite these extreme and
uncontrollable circumstances.
Furthermore, we would not want CJR
participant hospitals to limit case
management services for beneficiaries in
CJR episodes during extreme and
uncontrollable circumstances, when
prudent care management could
potentially involve using significantly
more expensive transport or care
settings. Therefore, we determined that
capping the actual episode spending at
the target amounts for those episodes
would be the best way to protect
beneficiaries from potential care stinting
and hospitals from escalating costs. This
will also ensure that those hospitals are
still able to earn reconciliation
payments on those eligible episodes
where the disaster did not have a
noticeable impact on cost.
In determining the start date of
episodes to which this extreme and
uncontrollable circumstances policy
would apply, we determined that a
window of 30 days prior to and
including the date that the emergency
period (as defined in section 1135(g))
begins should reasonably capture those
beneficiaries whose high CJR episode
costs could be attributed to extreme and
uncontrollable circumstances. We
believe this 30-day window is
particularly appropriate due to the 90day CJR model episode length.
Including all episodes that begin within
30 days before the date the emergency
period begins should enable us to
include the majority of beneficiaries still
in institutional settings and who are still
within the first third of their episodes
when the extreme and uncontrollable
circumstance arises. We note that the
average length of stay for DRG 469 is
between 5 and 6 days and the average
length of stay for DRG 470 is between
2 and 3 days (see https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/
Downloads/FY2018-CMS-1677-FRTable-5.zip).
Under § 510.300(a)(1), we
differentiated fracture and non-fracture
CJR episodes and pricing, noting that
lower extremity joint replacement
procedures performed as a result of a
hip fracture are typically emergent
procedures. Fracture episodes typically
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occur for beneficiaries with more
complex health issues and can involve
higher episode spending. We do not
expect a high volume of CJR nonfracture episodes to be initiated once
extreme and uncontrollable
circumstances arise, given that it is not
prudent to conduct non-fracture major
joint replacement surgeries, which
generally are elective and non-emergent,
until conditions stabilize and
infrastructure is reasonably restored.
Therefore, for non-fracture episodes,
this extreme and uncontrollable
circumstances policy will apply only to
dates of admission to anchor
hospitalization that occur between 30
days before and up to the date on which
the emergency period (as defined in
section 1135(g)) begins. We believe this
policy empowers hospitals to decide
whether they can safely and
appropriately perform non-fracture THA
and TKA procedures after the
commencement of the emergency period
and whether or not performing these
procedures will subject their
organization to undue financial risk
resulting from increased costs that are
beyond the organization’s control.
However, for CJR fracture episodes,
the extreme and uncontrollable
circumstances policy will apply to dates
of admission to the anchor
hospitalization that occur within 30
days before, on, or up to 30 days after
the date the emergency period (as
defined in section 1135(g)) begins. We
recognize that fracture cases in CJR are
often emergent and unplanned, and it
may not be prudent to postpone major
joint surgical procedures in many of
those CJR fracture cases. Therefore,
fracture episodes with a date of
admission to the anchor hospitalization
that is on or within 30 days before or
after the date that the emergency period
(as defined in section 1135(g) of the Act)
begins are subject to this extreme and
uncontrollable circumstances policy.
We believe that this 60-day window
should ensure that hospitals caring for
CJR fracture patients during extreme
and uncontrollable circumstances are
adequately protected from episode costs
beyond their control.
For performance years 2 through 5, for
participant hospitals that are located in
an emergency area during an emergency
period, as those terms are defined in
section 1135(g) of the Act, for which the
Secretary has issued a waiver under
section 1135, and in a county, parish,
U.S. territory or tribal government
designated in a major disaster
declaration under the Stafford Act, the
following conditions apply. For a nonfracture episode with a date of
admission to the anchor hospitalization
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57095
that is on or within 30 days before the
date that the emergency period (as
defined in section 1135(g)) begins,
actual episode payments are capped at
the target price determined for that
episode under § 510.300. For a fracture
episode with a date of admission to the
anchor hospitalization that is on or
within 30 days before or after the date
that the emergency period (as defined in
section 1135(g)) begins, actual episode
payments are capped at the target price
determined for that episode under
§ 510.300.
We are codifying this new extreme
and uncontrollable circumstance policy
at § 510.305(k). We seek comment on
potential modifications refinements we
might make to this policy for future
performance year reconciliations after
performance year 2.
D. Waiver of Proposed Rulemaking for
Provisions Related to Extreme and
Uncontrollable Circumstances
Under 5 U.S.C. 553(b) of the
Administrative Procedure Act (APA),
the agency is required to publish a
notice of the proposed rule in the
Federal Register before the provisions
of a rule take effect. Similarly, section
1871(b)(1) of the Act requires the
Secretary to provide notice of the
proposed rule in the Federal Register
with no less than 60 days for public
comment. Section 553(b)(B) of the APA
and section 1871(b)(2)(C) of the Act
authorize an agency to dispense with
normal rulemaking requirements for
good cause if the agency makes a
finding that the notice-and-comment
process is impracticable, unnecessary,
or contrary to the public interest.
We find that there is good cause to
waive the notice-and-comment
requirements under sections 553(b)(B)
of the APA and section 1871(b)(2)(C)
due to the impact of Hurricanes Harvey,
Irma, and Nate and the California
wildfires as described in section A. of
this interim final rule with comment
period. Based on the size and scale of
the destruction and displacement
caused by these natural disasters in the
regions identified, and the news reports
regarding specific impacts to hospitals
that are participating in the CJR model
discussed in section A of this interim
final rule with comment, we believe it
is likely that some CJR episodes at
participant hospitals have been
significantly and adversely affected by
these events. As discussed in detail in
section A of this interim final rule with
comment, due to extreme flooding or
infrastructure destruction where many
major and minor roads became
impassable and homes and/or
institutions were flooded and rendered
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inhabitable, it is possible that some
beneficiaries may have required air
ambulance transport or extended
institutional stays in inpatient or postacute care settings; these necessary
services may drive actual episode costs
well beyond the target prices.
Furthermore, we received several
requests for CMS to provide concessions
for the unique challenges faced by CJR
hospitals during the recent natural
disasters. Commenters on the proposed
rule noted that beneficiaries in disaster
areas may have required unplanned or
extensive healthcare services as a result
of evacuation or other emergency
situations and stated that CJR
participant hospitals should not be held
financially accountable for such
spending that is beyond their control.
They suggested that CMS offer a waiver
of the participation requirement or
another mechanism to ensure that
hospitals are not held accountable for
circumstances beyond their control due
to natural disasters.
Because the recent disasters impacted
CJR participant hospitals during
performance year 2 and will therefore
flow into the payment reconciliation
calculations in March 2018, potentially
having a negative impact on providers
unless an extreme and uncontrollable
events policy is established
immediately, we believe it is in the
public interest to adopt these final
policies. These policies will provide
relief to impacted CJR participant
hospitals and ensure they do not incur
financial liability for costs outside their
control. Without the immediate
establishment of a policy providing
additional flexibilities to CJR participant
hospitals in extreme and uncontrollable
circumstances, we could inadvertently
incentivize patient care stinting as CJR
participant hospitals contend with
evacuation costs or potential longer
inpatient stays during disasters. In
particular, CJR hospitals may experience
unintentional negative incentives as
compared to other, non-CJR hospitals
because their actual spending is
compared to target prices, and they have
downside risk responsibility for excess
spending beyond their target prices.
Without flexibilities provided, CJR
hospitals in disaster areas may
experience financial strain which could
incentivize behaviors that could
compromise the quality of care
provided. Providing CJR participant
hospitals with additional concessions in
extreme and uncontrollable
circumstances will strengthen
beneficiary protections, which are
integral to the model’s goal of improving
care quality.
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For the reasons discussed previously,
we believe that it would be contrary to
the public interest to undergo noticeand-comment procedures before
finalizing the policies described for CJR
participant hospitals that have been
affected by extreme and uncontrollable
events during performance year 2 of the
model. Performance year 2 began on
January 1, 2017 and concludes on
December 31, 2017. With this interim
final rule with comment period, it is our
intention to reduce burden on and
protect CJR participant hospitals and
beneficiaries impacted by extreme and
uncontrollable events. This extreme and
uncontrollable circumstances policy
will take effective with the publication
of this final rule and interim final rule
with comment and will be used during
the reconciliation process for
performance year 2 episodes that will
occur beginning in March of 2018. We
believe that an interim final rule with
comment period minimizes hospitals’
financial burden and avoids patient
harm due to extenuating circumstances,
efforts which would otherwise be
protracted and become effective after
the conclusion of performance year 2 if
done through the notice-and-comment
rulemaking process. Therefore, we find
good cause to waive the notice of
proposed rulemaking as provided under
section 1871(b)(2)(C) of the Act and
section 553(b)(B) of the APA and to
issue this interim final rule with an
opportunity for public comment. We are
providing a 60-day public comment
period as specified in the DATES section
of this document.
E. Collection of Information
Requirements Related to Extreme and
Uncontrollable Circumstances
As stated in section 1115A(d)(3) of the
Act, Chapter 35 of title 44, United States
Code, shall not apply to the testing and
evaluation of models under section
1115A of the Act. As a result, the
information collection requirements
contained in this final rule and interim
final rule with comment period need
not be reviewed by the Office of
Management and Budget. However, we
have summarized the anticipated cost
burden associated with the information
collection requirements in the
Regulatory Impact Analysis section of
this final rule and interim final rule
with comment period.
F. Impacts Related to Extreme and
Uncontrollable Circumstances
In order to estimate the impacts
resulting from this interim final rule
with comment period, we utilized 2016
CJR episode level data to approximate
the impact to projected CJR model
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savings resulting from the extreme and
uncontrollable circumstance policy we
are implementing in this interim final
rule with comment period. Specifically,
we first identified the CJR participant
hospitals located in Alabama,
California, Florida, Georgia, South
Carolina, Mississippi, Texas and
Louisiana (those states for which 1135
waivers were issued) that were also
located in the counties listed in section
III.A. of this interim final rule with
comment period and listed on
www.FEMA.gov/disasters as having a
major disaster declaration. To
approximate the date of the emergency,
we used the date of the disasters as
listed on the FEMA Web site from 2017
(resetting the year to 2016 to align with
the claim dates of service) and selected
all CJR episodes for these providers that
initiated in the month preceding (that is,
30 days prior) the date of the disaster.
Date of disaster declaration dates were
matched to the CJR participant hospitals
based on the hospitals’ state addresses.
For non-fracture episodes, we capped
the actual episode payment at the target
price determined for that episode if the
date of admission to the anchor
hospitalization is on or within 30 days
before the date that the emergency
period (as defined in section 1135(g) of
the Act) begins. For fracture episodes,
we capped the actual episode payment
at the target price determined for that
episode if the date of admission to the
anchor hospitalization that is on or
within 30 days before or after the date
that the emergency period (as defined in
section 1135(g) of the Act) begins. Our
analyses indicate that the impact of
capping the actual episode payments at
the episode target prices based on the
2017 extreme and uncontrollable events
policy could result in a decrease to the
CJR model estimated savings ranging
between $1.5 to $5.0 million for
performance year 2. We note that the
projected impact was mitigated by the 5
percent stop-loss/stop-gain levels
applicable to performance year 2 and
add that if these disasters had occurred
in a future performance year with higher
stop-loss/stop-gain levels then we
would expect the projected impact to
increase. These savings estimates do not
assume any change in spending or
volume due to these extreme and
uncontrollable circumstances, neither
before nor after the date of the disaster
as listed on the FEMA Web site.
We utilized 2016 CJR model episode
data assuming that it presented the best
available proxy for estimating impacts
to projected CJR model savings resulting
from 2017 disasters. We modeled
impact to savings projections using 2016
data during the same months in which
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the 2017 disasters occurred, for
hospitals impacted by the disasters. We
note that due to lack of available actual
claims data due to timing, we could not
utilize actual 2017 performance data to
estimate impacts from this interim final
rule with comment period.
Our estimates resulted from modeling
which utilized all CJR model episode
data for impacted hospitals in Alabama,
Georgia, South Carolina, Louisiana, and
California for the month of October,
2016 and CJR model fracture episodes
only for impacted hospitals in Alabama,
Georgia, South Carolina, Louisiana, and
California for the month of November,
2016. We also utilized all CJR episode
data for impacted hospitals in Texas and
Florida during the month of September,
2016 and CJR model fracture episodes
only for impacted hospitals in Texas
and Florida for the month of October
2016. To model estimated impacts to
savings projections resulting from this
interim final rule with comment period,
we recalculated NPRA based on the
aforementioned policies.
While we acknowledge that our
estimates related to impacts resulting
from this interim final rule with
comment period may under- or overestimate actual impacts resulting from
the policies, we believe our assumptions
are well-aligned with our other impact
projections in this final rule and
appropriately reflect our estimates of the
impacts resulting from these policies.
(September 19, 1980, Pub. L. 96–354),
section 1102(b) of the Social Security
Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (March
22, 1995; Pub. L. 104–4), Executive
Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act
(5 U.S.C. 804(2)), and Executive Order
13771 on Reducing Regulation and
Controlling Regulatory Costs (January
30, 2017).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). A regulatory impact analysis
(RIA) must be prepared for major rules
with economically significant effects
($100 million or more in any 1 year).
This final rule cancels the EPMs and the
CR Incentive Payment Model in advance
of their start date and revises the design
of the CJR model; these provisions
impact a subset of hospitals under the
IPPS. Therefore, it would have a
relatively small economic impact; as a
result, this final rule does not reach the
$100 million threshold and thus is
neither an ‘‘economically significant’’
rule under E.O. 12866, nor a ‘‘major
rule’’ under the Congressional Review
Act.
IV. Collection of Information
Requirements
B. Statement of Need
As stated in section 1115A(d)(3) of the
Act, Chapter 35 of title 44, United States
Code, shall not apply to the testing and
evaluation of models under section
1115A of the Act. As a result, the
information collection requirements
contained in this final rule and interim
final rule with comment period need
not be reviewed by the Office of
Management and Budget. However, we
have summarized the anticipated cost
burden associated with the information
collection requirements in the
Regulatory Impact Analysis section of
this final rule and interim final rule
with comment period.
V. Regulatory Impact Analysis
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A. Introduction
We have examined the impacts of this
final rule and interim final rule with
comment period as required by
Executive Order 12866 on Regulatory
Planning and Review (September 30,
1993), Executive Order 13563 on
Improving Regulation and Regulatory
Review (January 18, 2011), the
Regulatory Flexibility Act (RFA)
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As discussed previously, review and
reevaluation of policies and programs,
as well as revised rulemaking, are
within an agency’s discretion, especially
after a change in administration occurs.
After review and reevaluation of the CJR
model final rule, the EPM final rule and
the public comments we received in
response to the March 21, 2017 IFC, in
addition to other considerations, we
have determined that it is necessary to
rescind the regulations at 42 CFR part
512 and to reduce the scope of the CJR
model for the following reasons. We
believe that reducing the number of
hospitals required to participate in the
CJR model will allow us to continue to
evaluate the effects of such a model
while limiting the geographic reach of
our current mandatory models.
Additionally, we believe that canceling
the EPMs and CR Incentive Payment
Model, as well as altering the scope of
the CJR model, offers CMS maximum
flexibility to design alternative episodebased models and make potential
improvements to these models as
suggested by stakeholders, while still
allowing us to test and evaluate the
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impact of the CJR model on the quality
of care and expenditures.
This final rule and interim final rule
with comment period is also necessary
to improve the CJR model for
performance years 3, 4, and 5. We are
implementing a few technical
refinements and clarifications for
certain payment, reconciliation and
quality provisions, and changing the
criteria for the Affiliated Practitioner
List to broaden the CJR Advanced APM
track to additional eligible clinicians.
We believe these refinements will
address operational issues identified
since the start of the CJR model.
C. Anticipated Effects
In section III. of this final rule and
interim final rule with comment period,
we discuss the policies we are finalizing
to amend the regulations governing the
CJR model. We present the following
estimated overall impact of the
proposed changes to the CJR model.
Table 6 summarizes the estimated
impact for the CJR model for the last 3
years of the model. The modeling
methodology for provider performance
and participation is consistent with the
methodology used in modeling the CJR
impacts in the EPM final rule (82 FR
596). However, we updated our analysis
to include an opt-in option for hospitals
in 33 of the 67 MSAs selected for
participation in the CJR model (all but
4 of these MSAs are from the lower cost
groups), while maintaining mandatory
participation for the remaining 34 MSAs
(all of which are from the higher cost
groups), and allowing for the exclusion
of low-volume and rural hospitals in
these 34 MSAs from mandatory
participation and allowing them to
choose voluntary participation (opt-in).
We note that we updated the list of
excluded rural hospitals between the
proposed and final rules as we did not
have a complete set of rural hospitals;
this final rule now includes in the
analysis approximately 23 additional
rural hospitals that we anticipate will
not opt-in to the CJR model in this final
rule. We expect the number of
mandatory participating hospitals from
year 3 forward to decrease from
approximately 700, which is
approximately the number of current
CJR participant hospitals, to
approximately 370. We assumed that if
a hospital would exceed its target
pricing such that it would incur an
obligation of repayment to CMS of 3
percent or more in a given year, that
hospital would not elect voluntary
participation in the model for the final
3 performance years.
We assumed no low-volume hospitals
would participate, noting that including
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them in impacts would not have any
noticeable effects due to their low
claims volume. For purposes of
identifying CJR rural hospitals for this
impact, we used the 2018 IPPS
§ 412.103 rural reclassification list and
checked the addresses of record for the
CJR hospitals to identify any located
within the rural RUCA census tracts.
The likelihood of voluntary
participation linearly increases based on
an upper bound of 3 percent bonus, but
the modeling assumed that 25 percent of
hospitals in the voluntary MSAs would
not consider participation so that the
likelihood of participation for each
hospital was capped at 75 percent; we
expected 60 to 80 hospitals to elect
voluntary participation in the model.
We sought comment on our
assumptions about the number of
hospitals that would elect voluntary
participation in the CJR model.
Due to a lack of available data, we did
not account for participant investment
in the impact analysis model we used
for the proposed rule. However, we
noted that we would expect that those
who choose to voluntarily participate
would have made investments in the
CJR model that enable them to perform
well and that they would anticipate
earning positive reconciliation
payments. For those hospitals choosing
not to voluntarily participate, we would
expect that the cost of any investments
they may have made based on their
participation in performance years 1
and 2 of the CJR model would be
outweighed by the reconciliation
payment obligations they would expect
to incur if they continued to participate.
The 60 to 80 participants we expect
to continue participating in the model
through the voluntary election process
are not included in our previous
estimate of 370 CJR participants in the
mandatory MSAs. Thus, in total we
expected approximately 430 to 450
participants in the CJR model for the
final 3 performance years. The
participation parameters were chosen to
reflect both the anticipated risk aversion
of hospitals, and an expectation that
many participants do not remain in an
optional model or demonstration when
there is an expectation that the hospital
would incur an obligation of repayment
to CMS. These assumptions reflected
the experience with other models and
demonstrations. The value of 3 percent
may be somewhat larger than the level
of repayment at which hospitals would
opt-in, but the value was chosen to
allow for the uncertainty of expected
claims. We noted that the possibility of
shifting episodes from CJR model
participant hospitals to low-volume or
other non-participating hospitals exists
and that we did not include any
assumptions of this potential behavior
in our financial impact modeling. We
sought comment on our model
assumptions that shifting of episodes
will not occur.
The calculations estimated that the
CJR model would result in a net
Medicare program savings of
approximately $189 million over the 3
remaining performance years (2018
through 2020). This represents a
reduction in savings of approximately
$106 million from the estimated net
financial impacts of the CJR model in
the EPM final rule (82 FR 603).
Our previous analyses of the CJR
model did not explicitly model for
utilization changes, such as
improvements in the efficiency of
service during episodes. However, these
behavioral changes would have minimal
effect on the Medicare financial
impacts. If the actual costs for an
episode are below the discounted
bundled payment amount, then CMS
distributes the difference between these
two amounts to the participant hospital,
up to a capped amount. Similarly, if
actual costs for an episode are above the
discounted bundled payment amount,
then the participant hospital pays CMS
the difference between these amounts,
up to a capped amount. Due to the
uncertainty of estimating the impacts of
this model, actual results could be
higher or lower than this estimate.
TABLE 6—COMPARISON OF INITIAL ESTIMATE OF THE IMPACT ON THE MEDICARE PROGRAM OF THE CJR MODEL WITH
REVISED ESTIMATES
[Figures are in $ millions, negative values represent savings]
Year
2018
Initial CJR Estimate .........................................................................................
Revised CJR Estimate .....................................................................................
Change ............................................................................................................
2019
¥61
¥35
26
2020
¥109
¥72
37
¥125
¥82
43
Total
¥294
¥189
106
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Note: The initial estimate included the changes to the CJR model finalized in the EPM final rule (82 FR 603). The 2016 and 2017 initial estimate was not impacted by the proposed changes to the CJR model in the August 17, 2017 proposed rule (82 FR 39310 through 39333). The
total column reflects 2018 through 2020. Totals do not necessarily equal the sums of rounded components.
The revised impact of EPM and the
CR Incentive Payment as a result of
‘‘Advancing Care Coordination Through
Episode Payment Models (EPMs);
Cardiac Rehabilitation Incentive
Payment Model; and Changes to the
Comprehensive Care for Joint
Replacement Model’’ published in the
January 3, 2017 Federal Register (82 FR
597), estimated an annual cost of $32
million for 2018 and annual savings of
$29 million, $36 million, $52 million,
and $119 million for years 2019–2022,
respectively. Additionally, assuming a
zero percent growth in cardiac
rehabilitation resulting from the CR
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Incentive Payment Model (see 82 FR
604 for a discussion of the original
cardiac rehabilitation impact where we
estimated an impact range between a
cost of $29 million to a savings of $32
million over 2017 to 2024; we note we
assumed a zero percent growth rate for
purposes of the accounting statement in
the January 3, 2017 final rule and
continue to do so here), we projected
annual costs to the Medicare program of
$4.8 million, $6.7 million, $7.2 million,
$7.6 million, $8.1 million for the years
2018 through 2022, respectively, and
projected neither costs nor savings for
the years 2023 and 2024. Table 7
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summarizes the anticipate changes to
the savings and cost estimates resulting
from the cancellation of the EPMs and
CR Incentive Payment model relative to
the previously projected savings
estimates. Overall, the change to
projected savings and costs resulting
from the cancellation of these models
totals $170 million, reflecting a
reduction in savings for years 2018
through 2022 resulting from cancelation
of the EPMs and a reduction in costs for
years 2018 through 2022 resulting from
the cancelation of the CR Incentive
Payment Model.
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57099
TABLE 7—COMPARISON OF INIITIAL ESTIMATE OF THE IMPACT ON THE MEDICARE PROGRAM OF THE EPMS AND CR
INCENTIVE PAYMENT MODEL WITH REVISED ESTIMATES
[Figures are in $ millions, negative values represent savings]
Year
2018
Previous EPM Estimate ...........................
Previous CR Incentive Payment Model
Estimate ................................................
Total Initial Estimate ................................
Revised Total Estimate ............................
Change .....................................................
2019
2020
2021
2022
Total
$32
($29)
($36)
($52)
($119)
($204)
5
37
0
(37)
7
(22)
0
22
7
(29)
0
29
8
(45)
0
45
8
(111)
0
111
34
(170)
0
170
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Note: Totals do not necessarily equal the sums of rounded components.
Our analysis presented the cost and
transfer payment effects of the proposed
rule to the best of our ability.
Comment: Several commenters
questioned the validity of our proposed
estimated reduction in savings of $90
million throughout the remainder of the
model due to the proposed changes to
the CJR model. The commenter stated
that the projected $90 million in
reduced savings is only part of the total
savings that would result from
continuing the CJR model in its original,
entirely mandatory, form. This
commenter stated that savings will
increase due to the CJR model’s
increased regional pricing component
beginning in performance year 4.
Response: We thank the commenters
for their input. We acknowledge that
our total savings estimates (which we
note shifted from $90 million in the
proposed rule to $108 million in this
final rule and interim final rule with
comment period, with $106 million due
to final changes to the CJR model as
(well as the exclusion of an additional
23 rural hospitals we did not account
for in the proposed rule) and an
additional $2 million resulting from the
impacts of this interim final rule with
comment) may prove imperfect. As with
all rule and regulation development,
CMS utilized standard savings modeling
methodology to determine estimates of
the effects from this rule. Our current
modeling reflects our proposal to alter
the existing CJR model for the final
three performance years of 2018 through
2020.
Comment: A commenter asserted that
the proposed voluntary model structure
would allow for ‘‘cherry picking’’ of CJR
patients by participating hospitals and
create selection bias that may alter or
interfere with evaluation efforts.
Response: We appreciate the
commenter’s concern about the
proposed voluntary format. We note that
the final policy will allow for a one-time
opt in for certain hospitals and that
these hospitals will be participants in
the CJR model should they elect to
proceed. Hospitals that elect to
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voluntarily participate in CJR will be
held to the same standards, regulations
and programmatic expectations as the
hospitals within the mandatory MSAs.
Thus, we would not anticipate hospitals
electing voluntary participation in CJR
to be any more or less likely than
hospitals within the mandatory MSAs to
engage in concerning behaviors such as
care stinting or biased patient selection
for surgery. We appreciate the
commenter’s concern that the proposed
model design could impede evaluation
efforts and refer readers to discussion of
the impact on the evaluation in section
II.A of this final rule and interim final
rule with comment period.
D. Effects on Beneficiaries
We believe that the cancellation of the
EPMs and CR Incentive Payment Model
will not affect beneficiaries’ freedom of
choice to obtain healthcare services
from any individual or organization
qualified to participate in the Medicare
program, including hospitals that are
making care improvements within their
communities. Although these models
seek to incentivize care redesign and
collaboration throughout the inpatient
and post-acute care spectrum, the
models have not yet begun. As the
current baseline assumes these models
will become effective on January 1,
2018, and that these models will
incentivize care improvements that will
likely result in an increase in quality of
care for beneficiaries, we note that it is
possible that the cancellation of these
models may cause hospitals that
potentially made improvements in care
in anticipation of the start of these
models to delay or cease these
investments, which may result in a
reversal of any recent quality
improvements. However, we believe the
concerns raised by stakeholders and the
lack of time to consider design
improvements for these models prior to
the January 1, 2018 start date outweigh
potential reversal of any recent
improvements in care potentially made
by some hospitals and warrant
cancellation of these models at this time
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while we engage with stakeholders to
identify future tests for bundled
payments and incentivizing high value
care.
We believe that the changes to the CJR
model discussed in this final rule and
interim final rule with comment period,
specifically focusing the model on
higher cost MSAs in which
participation will continue to be
mandatory and allowing low-volume
and rural hospitals and all participant
hospitals in lower cost MSAs to choose
voluntary participation, will maintain
the potential benefits of the CJR model
for beneficiaries in many areas while
providing a substantial number of
hospitals with increased flexibility to
better focus on priority needs of the
beneficiaries they serve. Specifically,
low-volume and rural hospitals as well
as other hospitals in the 33 voluntary
participation MSAs (which are
relatively more efficient areas) may elect
to participate in the CJR model if they
believe that doing so best meets their
organization’s strategic priorities for
serving the beneficiaries in their
community. Alternatively, if these
hospitals do not believe continued
participation in the CJR model will
benefit their organizational goals and
local patient care priorities, they may
elect not to opt-in for the remainder of
the model. We believe that beneficiaries
in the service areas of the hospitals that
will be allowed to choose to participate
in the CJR model may have an ongoing
benefit from the care redesign
investments these hospitals have
already made during the first 2 years of
the CJR model. Overall, we believe the
refinements to the CJR model
implemented by this final rule and
interim final rule with comment period
do not materially alter the potential
effects of the model on beneficiaries.
However, we acknowledge the
possibility that the improved quality of
care that was likely to have occurred
during performance years 1 and 2 of the
CJR model may be curtailed for
beneficiaries that receive care at
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hospitals that do not elect to continue
participation in the CJR model.
Comment: A commenter expressed
concern for the unintended
consequences on beneficiaries that
result from implementation of
mandatory models. The commenter
stated that a mandatory approach to
model implementation will force some
hospitals to participate in a model for
which they are ill-prepared, potentially
limiting beneficiaries’ access to care.
Response: We appreciate the
commenter’s concern about unintended
consequences resulting from the CJR
model and as such, note that beneficiary
protection remains a very high priority
as originally specified in the CJR final
rule. We will continue to diligently
monitor CJR model participant behavior
for the potential for any adverse
outcomes resulting from model
participation.
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E. Effects on Small Rural Hospitals
The changes to the CJR model
implemented by this final rule and
interim final rule with comment period
do not substantially alter our previous
impacts of the impact on small,
geographically rural hospitals specified
in either the EPM final rule (82 FR 606)
or the CJR model final rule (80 FR
73538) because we continue to believe
that few geographically rural hospitals
will be included in the CJR model. In
addition, allowing all rural hospitals (as
defined in § 510.2) that are not
otherwise excluded the opportunity to
elect to opt-in to the CJR model instead
of having a mandatory participation
requirement may further reduce the
likelihood that rural hospitals will be
included in the model. We solicited
public comment on our estimates and
analysis of the impact of our proposals
on small rural hospitals.
Comment: We received no comments
regarding the effects of these policies on
small rural hospitals.
F. Effects on Small Entities
The RFA requires agencies to analyze
options for regulatory relief of small
entities, if a rule has a significant impact
on a substantial number of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. We
estimated that most hospitals and most
other providers and suppliers are small
entities, either by virtue of their
nonprofit status or by qualifying as
small businesses under the Small
Business Administration’s size
standards (revenues of less than $7.5 to
$38.5 million in any 1 year; NAIC
Sector–62 series). States and individuals
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are not included in the definition of a
small entity. For details, see the Small
Business Administration’s Web site at
https://www.sba.gov/content/
smallbusiness-size-standards.
For purposes of the RFA, we generally
consider all hospitals and other
providers and suppliers to be small
entities. We believe that the provisions
of this final rule and interim final rule
with comment period relating to acute
care hospitals will have some effects on
a substantial number of other providers
involved in these episodes of care
including surgeons and other
physicians, skilled nursing facilities,
physical therapists, and other providers.
Although we acknowledge that many of
the affected entities are small entities,
and the analysis discussed throughout
this final rule and interim final rule
with comment period discusses aspects
of episode payment models that may or
would affect them, we have no reason
to assume that these effects would reach
the threshold level of 3 percent of
revenues used by HHS to identify what
are likely to be ‘‘significant’’ impacts.
We assume that all or almost all of these
entities will continue to serve these
patients, and to receive payments
commensurate with their cost of care.
Hospitals currently experience frequent
changes to payment (for example, as
both hospital affiliations and preferred
provider networks change) that may
impact revenue, and we have no reason
to assume that this will change
significantly under the changes
implemented by this final rule and
interim final rule with comment period.
Accordingly, we have determined that
this final rule and interim final rule
with comment period will not have a
significant impact on a substantial
number of small entities. We solicited
public comments on our estimates and
analysis of the impact of the proposed
rule on those small entities.
Comment: We did not receive
comments regarding this section.
G. Effects of Information Collection
The changes implemented by this
final rule and interim final rule with
comment period will have a minimal
additional burden of information
collection for CJR model participant
hospitals. The two areas which this final
rule and interim final rule with
comment period may increase
participant burden include providing
clinician engagement lists and
submitting opt-in documentation (for
eligible hospitals who choose to opt-in
to the CJR model).
Clinician engagement list submission
for the CJR model will require that
participants submit on a no more than
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quarterly basis a list of physicians, nonphysician practitioners, or therapists
who are not a CJR model collaborator
during the period of the CJR model
performance year specified by CMS but
who do have a contractual relationship
with a CJR model participant hospital
based at least in part on supporting the
participant hospital’s quality or cost
goals under the CJR model during the
period of the performance year specified
by CMS.
For hospitals eligible to opt-in to the
CJR model that elect to participate in the
model, CMS intends to provide a
template that can be completed and
submitted prior to the January 31, 2018
submission deadline. As stated
previously, we estimate that the number
of hospitals that will elect voluntary
participation in CJR is 60 to 80. As
stated previously, this template would
be designed to minimize burden on
participants, and the template will
capture the information required to
effectively opt-in to the model. Using
wage information from the Bureau of
Labor Statistics for medical and health
service managers (Code 11–9111), we
assumed a rate of $105.16 per hour,
including overhead and fringe benefits
(https://www.bls.gov/oes/current/oes_
nat.htm) and estimated that the time to
complete the opt-in template would be,
on average, approximately 30 minutes
per hospital. Thus, total costs associated
with completing opt-in templates for all
60 to 80 hospitals projected to elect
voluntary participation is expected to
range between $3,150 (60 hospitals) and
$4,200 (80 hospitals).
We sought comment on our
assumptions and information on any
costs associated with this work.
Comment: Several commenters stated
that the administrative burden resulting
from the clinician engagement list
requirements, sharing arrangement
reporting and beneficiary notification
mandates of the CJR model is
overwhelming. A commenter added that
any reduction in burden that can be
achieved would be helpful to hospitals
and would enable patient-centered care.
Another commenter stated that they
have significant concerns about
hospitals’ ability to maintain accurate
clinician engagement lists with start and
end dates for each clinician. The
commenter noted that this would be
particularly challenging for hospitals in
California, where they believe alignment
with providers is particularly
complicated, thus making a list of this
type burdensome to maintain.
Response: We appreciate the
commenters’ concerns over the
administrative burden associated with
the CJR model as well as the burden
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resulting from clinician engagement
lists and the concern that maintaining
accurate lists will prove particularly
difficult for some providers. We
acknowledge that the requirement of
submitting clinician engagement lists
may be burdensome for providers.
However, as discussed in section III.F.
of the proposed rule, we developed this
requirement in response to feedback
from stakeholders who expressed a
desire to enhance opportunities for
those physicians, non-physician
practitioners, and therapists without a
financial arrangement under the CJR
model, but who are affiliated with and
support the Advanced APM Entity in its
participation in the Advanced APM for
purposes of the Quality Payment
Program.
sradovich on DSK3GMQ082PROD with RULES3
H. Regulatory Review Costs
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
final rule and interim final rule with
comment period, we should estimate
the cost associated with regulatory
review. Due to the uncertainty involved
with accurately quantifying the number
of entities that will review the final rule
and interim final rule with comment
period, we assume that the total number
of unique commenters on the July 25,
2016 proposed rule that proposed the
EPMs and CR Incentive Payment Model
will be the number of reviewers of this
final rule and interim final rule with
comment period. We received 85 unique
comment submissions for this final rule
but maintain that the 175 comments
received for the July 25, 2016 EPM and
CR Incentive Payment Model proposed
rule reflects a more conservative
estimate of the number of organizations
which invested resources in review of
this final rule, regardless of whether or
not the organization elected to formally
submit comments. We acknowledge that
this assumption may understate or
overstate the costs of reviewing this
final rule and interim final rule with
comment period. It is possible that not
all commenters reviewed the precedent
rule in detail, and it is also possible that
some reviewers chose not to comment
on the proposed rule. For these reasons
we believe that the number of past
commenters on the EPM proposed rule
would be a fair estimate of the number
of reviewers of this rule.
We also recognize that different types
of entities are in many cases affected by
mutually exclusive sections of the
proposed rule. However, for the
purposes of our estimate we assume that
each reviewer reads approximately 100
percent of the rule.
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Using the wage information from the
BLS for medical and health service
managers (Code 11–9111), we estimate
that the cost of reviewing this rule is
$105.16 per hour, including overhead
and fringe benefits https://www.bls.gov/
oes/current/oes_nat.htm. Assuming an
average reading speed, we estimate that
it would take approximately 1.6 hours
for the staff to review the proposed rule.
For each entity that reviews the rule, the
estimated cost is $168.26 (1.6 hours ×
$105.16). Therefore, we estimate that
the total cost of reviewing this
regulation is $29,445 ($105.16 × 175
reviewers).
I. Unfunded Mandates
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2017, that is
approximately $148 million. This final
rule and interim final rule with
comment period does not include any
mandate that would result in spending
by state, U.S. territories, local or tribal
governments, in the aggregate, or by the
private sector in the amount of $148
million in any 1 year.
J. Federalism
We do not believe that there is
anything in this final rule and interim
final rule with comment period that
either explicitly or implicitly preempts
any state law, and furthermore we do
not believe that this final rule and
interim final rule with comment period
will have a substantial direct effect on
state or local governments, preempt
state law, or otherwise have a federalism
implication.
K. Reducing Regulation and Controlling
Regulatory Costs
Executive Order 13771, titled
Reducing Regulation and Controlling
Regulatory Costs (82 FR 9339), was
issued on January 30, 2017. This final
rule and interim final rule with
comment period is not expected to be
subject to the requirements of E.O.
13771 because it is estimated to result
in no more than de minimis costs.
L. Alternatives Considered
Throughout this final rule and interim
final rule with comment period, we
have identified our policies and
alternatives that we have considered,
and provided information as to the
effects of these alternatives and the
rationale for each of the policies. We
considered but did not propose to allow
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57101
voluntary participation in all of the 67
selected MSAs in the CJR model
because the overall estimated CJR model
impact would no longer show savings,
and would likely result in costs. An
entirely voluntary CJR model would
likely result in costs due to the
assumption that, in aggregate, hospitals
that expect to receive a positive
reconciliation payment from Medicare
would elect to opt-in to the model while
hospitals that expect to owe Medicare a
reconciliation amount would not likely
elect to participate in the model. We
also considered but did not propose
limiting participation to the proposed
34 mandatory participation MSAs and
not allowing voluntary participation in
any of the 67 selected MSAs. In the
August 17, 2017 proposed rule, we
noted that if participation was limited to
the proposed 34 mandatory
participation MSAs and voluntary
participation was not allowed in any
MSA, the impact to the overall
estimated model savings over the last 3
years of the model would be closer to
$30 million than the $90 million
estimate presented in section V. of the
proposed rule (82 FR 39327 through
39331), because our modeling did not
include assumptions about behavioral
changes that might lower fee-for-service
spending. Since our impact model
estimated that 60 to 80 hospitals would
choose voluntary participation and that
these potential voluntary participants
would be expected to earn only positive
reconciliation payments under the
model, these positive payments to the
voluntary participants would offset
some of the savings garnered from
mandatory participants. However, we
did propose to allow voluntary
participation in the proposed 33
voluntary participation MSAs and for
low-volume and rural hospitals to
permit hospitals that have made
investments in care redesign and
commitments to improvement to
continue to participate in the model for
the remaining 3 years. We stated that we
believed our proposal would benefit a
greater number of beneficiaries because
a greater number of hospitals would be
included in the CJR model.
Instead of proposing to cancel the
EPMs and CR Incentive Payment Model,
we considered altering the design of
these models to allow for voluntary
participation but as this would
potentially involve restructuring the
model design, payment methodologies,
financial arrangement provisions and/or
quality measures, we did not believe
that such alterations would offer
providers enough time to prepare for
such changes, given the planned
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Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
January 1, 2018 start date. In addition,
if at a later date we decided to offer
these models, or similar models we
would not expect to implement them
through rulemaking if done on a
voluntary basis, but rather would
establish them consistent with the
manner in which we have implemented
other voluntary models.
We solicited and welcomed
comments on our proposals, on the
alternatives we identified, and on other
alternatives that we should consider, as
well as on the costs, benefits, or other
effects of these.
We did not receive any comments
regarding this section.
M. Accounting Statement and Table
As required by OMB Circular A–4
under Executive Order 12866 (available
at https://www.whitehouse.gov/omb/
circulars_a004_a-4) in Table 8, we have
prepared an accounting statement
showing the classification of transfers
associated with the provisions in this
final rule and interim final rule with
comment period. The accounting
statement is based on estimates
provided in this regulatory impact
analysis. As described in Table 6, we
estimate the changes to the CJR model
will continue to result in savings to the
federal government of approximately
$189 million over the 3 remaining
performance years of the model from
2018 to 2020, noting these changes do
reduce the original CJR estimated
savings by approximately $106 million.
As described in section F of the interim
final rule with comment in this rule, we
anticipate an additional cost due to
currently known events between $1.5
and $5 million from the extreme and
uncontrollable events policy we are
establishing in this interim final rule
with comment. We project $2.0 million
as a point-estimate for one-time cost
associated with the extreme and
uncontrollable events policy during
performance year 2. The impact over
subsequent years will depend on the
number of events in CJR regions and the
stop-gain and stop-loss limits for that
year. In Table 8, the overall annualized
change in payments (for all provisions
in this final rule and interim final rule
with comment period relative to the
CJR, EPM and CR models as originally
finalized) based on a 7-percent and 3percent discount rate, results in net
federal monetary transfer from the
federal government to participant IPPS
hospitals of $199.3 million and $239.1
million in 2017 dollars, respectively,
over the period of 2018 to 2022. Both of
these estimates of the net transfer would
increase by $2 million for the one-time
cost of the 2017 disaster declarations.
TABLE 8—ACCOUNTING STATEMENT CHANGES TO COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL AND CANCELLATION OF EPISODE PAYMENT MODELS AND CR INCENTIVE PAYMENT MODEL FOR PERFORMANCE YEARS 2018 TO
2022 AND CJR EXTREME AND UNCONTROLLABLE CIRCUMSTANCES POLICY 2017
Units
Category
Estimates
Year dollar
Costs: *
Upfront cost of regulation ($million) ....................................
Discount rate
(%)
Period covered
0.03
–2018 upfront cost.
2017
3
–2018 upfront cost.
Incurred by IPPS Hospitals as a result of this final rule.
Impact of Disaster Declaration in 2017:
One-time cost of Disaster Declaration ................................
From Whom to Whom ................................................................
7
0.03
From Whom to Whom ................................................................
2017
2
2
2017
2017
7
3
–2017 one-time cost.
–2017 one-time cost.
From the Federal Government to 2017 disaster declaration hospitals.
Transfers:
Annualized/Monetized ($million/year) ..................................
48.6
52.2
From Whom To Whom ...............................................................
2017
2017
7
3
2018–2022.
2018–2022.
From the Federal Government to Participating IPPS Hospitals.
* The cost includes the regulatory familiarization and completing opt-in templates for up to 80 hospitals to join the CJR model.
sradovich on DSK3GMQ082PROD with RULES3
N. Conclusion
This analysis, together with the
remainder of this preamble, provides
the Regulatory Impact Analysis of a
rule. As a result of this final rule and
interim final rule with comment period,
we estimate that the financial impact of
the changes to the CJR model will result
in a reduction to previously estimated
savings by $106 million over the 3
remaining performance years (2018
through 2020) and a financial impact of
$2 million reduction in savings
estimates for the one-time cost resulting
from the impacts of disaster declaration
in 2017 although we note that the CJR
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model will still be estimated to save the
Medicare program approximately $189
million over the remaining 3
performance years. We note that the
projected $170 million savings we had
estimated that the EPMs and CR
Incentive Payment Model would
generate for the Medicare program will
not be realized as this final rule and
interim final rule with comment is
cancelling those models.
In accordance with the provisions of
Executive Order 12866, this final rule
was reviewed by the Office of
Management and Budget.
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List of Subjects
42 CFR Part 510
Administrative practice and
procedure, Health facilities, Health
professions, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 512
Administrative practice and
procedure, Health facilities, Health
professions, Medicare, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, under the authority at section
1115A of the Social Security Act, the
Centers for Medicare & Medicaid
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Federal Register / Vol. 82, No. 230 / Friday, December 1, 2017 / Rules and Regulations
Services amends 42 CFR chapter IV, as
set forth below.
PART 510—COMPREHENSIVE CARE
FOR JOINT REPLACEMENT MODEL
1. The authority citation for part 510
continues to read as follows:
■
Authority: Secs. 1102, 1115A, and 1871 of
the Social Security Act (42 U.S.C. 1302,
1315(a), and 1395hh).
2. Section 510.2 is amended by—
a. Revising the definition of ‘‘Actual
episode payment’’;
■ b. Adding, in alphabetical order,
definitions of ‘‘Low-volume hospital’’
and ‘‘Mandatory MSA’’.
■ c. Revising the definition of
‘‘Participant hospital’’; and
■ d. Adding the definition of
‘‘Voluntary MSA’’.
The revisions and additions read as
follows:
■
■
§ 510.2
sradovich on DSK3GMQ082PROD with RULES3
§ 510.105
Definitions.
*
*
*
*
*
Actual episode payment means the
sum of standardized Medicare claims
payments for the items and services that
are included in the episode in
accordance with § 510.200(b), excluding
the items and services described in
§ 510.200(d).
*
*
*
*
*
Low-volume hospital means a hospital
identified by CMS as having fewer than
20 LEJR episodes in total across the 3
historical years of data used to calculate
the performance year 1 CJR episode
target prices.
*
*
*
*
*
Mandatory MSA means an MSA
designated by CMS as a mandatory
participation MSA in accordance with
§ 510.105(a).
*
*
*
*
*
Participant hospital means one of the
following:
(1) During performance years 1 and 2
of the CJR model and the period from
January 1, 2018 to January 31, 2018 of
performance year 3, a hospital (other
than a hospital excepted under
§ 510.100(b)) with a CCN primary
address located in one of the geographic
areas selected for participation in the
CJR model in accordance with
§ 510.105.
(2) Beginning February 1, 2018, a
hospital (other than a hospital excepted
under § 510.100(b)) that is one of the
following:
(i) A hospital with a CCN primary
address located in a mandatory MSA as
of February 1, 2018 that is not a rural
hospital or a low-volume hospital on
that date.
(ii) A hospital that is a rural hospital
or low-volume hospital with a CCN
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primary address located in a mandatory
MSA that makes an election to
participate in the CJR model in
accordance with § 510.115.
(iii) A hospital with a CCN primary
address located in a voluntary MSA that
makes an election to participate in the
CJR model in accordance with
§ 510.115.
*
*
*
*
*
Voluntary MSA means an MSA
designated by CMS as a voluntary
participation MSA in accordance with
§ 510.105(a).
■ 3. Section 510.105 is amended by
revising paragraph (a) to read as follows:
Geographic areas.
(a) General. The geographic areas for
inclusion in the CJR model are obtained
based on a stratified random sampling
of certain MSAs in the United States.
(1) All counties within each of the
selected MSAs are selected for inclusion
in the CJR model.
(2) Beginning with performance year
3, the selected MSAs are designated as
either mandatory participation MSAs or
voluntary participation MSAs.
*
*
*
*
*
■ 4. Section 510.115 is added to read as
follows:
§ 510.115
Voluntary participation election.
(a) General. To continue participation
in performance year 3 and participate in
performance year 4 and performance
year 5, the following hospitals must
submit a written participation election
letter as described in paragraph (c) of
this section during the voluntary
participation election period specified
in paragraph (b) of this section:
(1) Hospitals (other than those
excluded under § 510.100(b)) with a
CCN primary address in a voluntary
MSA.
(2) Low-volume hospitals with a CCN
primary address in a mandatory MSA.
(3) Rural hospitals with a CCN
primary address in a mandatory MSA.
(b) Voluntary participation election
period. The voluntary participation
election period begins on January 1,
2018 and ends on January 31, 2018.
(c) Voluntary participation election
letter. The voluntary participation
election letter serves as the model
participation agreement. CMS accepts
the voluntary participation election
letter if the letter meets all of the
following criteria:
(1) Includes the following:
(i) Hospital name.
(ii) Hospital address.
(iii) Hospital CCN.
(iv) Hospital contact name, telephone
number, and email address.
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57103
(v) Model name (that is, CJR model).
(2) Includes a certification that the
hospital will—
(i) Comply with all applicable
requirements of this part and all other
laws and regulations applicable to its
participation in the CJR model; and
(ii) Submit data or information to
CMS that is accurate, complete and
truthful, including, but not limited to,
the participation election letter and any
quality data or other information that
CMS uses in its reconciliation
processes.
(3) Is signed by the hospital
administrator, CFO or CEO.
(4) Is submitted in the form and
manner specified by CMS.
■ 5. Section 510.120 is amended by
removing paragraph (b)(4), revising
paragraph (c), and adding paragraphs (d)
and (e) to read as follows:
§ 510.120 CJR participant hospital CEHRT
track requirements.
*
*
*
*
*
(c) Clinician engagement list. Each
participant hospital that chooses CEHRT
use as provided in paragraph (a)(1) of
this section must submit to CMS a
clinician engagement list in a form and
manner specified by CMS on a no more
than quarterly basis. This list must
include the following information on
individuals for the period of the
performance year specified by CMS:
(1) For each physician, nonphysician
practitioner, or therapist who is not a
CJR collaborator during the period of the
CJR model performance year specified
by CMS but who does have a
contractual relationship with the
participant hospital based at least in
part on supporting the participant
hospital’s quality or cost goals under the
CJR model during the period of the
performance year specified by CMS:
(i) The name, TIN, and NPI of the
individual.
(ii) The start date and, if applicable,
the end date for the contractual
relationship between the individual and
participant hospital.
(2) [Reserved]
(d) Attestation to no individuals. If
there are no individuals that meet the
requirements to be reported, as specified
in paragraphs (b)(1) through (3) or
paragraph (c) of this section, the
participant hospital must attest in a
form and manner required by CMS that
there are no individuals to report.
(e) Documentation requirements. (1)
Each participant hospital that chooses
CEHRT use as provided in paragraph
(a)(1) of this section must maintain
documentation of their attestation to
CEHRT use, clinician financial
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arrangements lists, and clinician
engagement lists.
(2) The participant hospital must
retain and provide access to the
required documentation in accordance
with § 510.110.
■ 6. Section 510.210 is amended by
revising paragraph (b) to read as follows:
§ 510.210
Determination of the episode.
*
*
*
*
*
(b) Cancellation of an episode. The
episode is canceled and is not included
in the determination of NPRA as
specified in § 510.305 if any of the
following occur:
(1) The beneficiary does any of the
following during the episode:
(i) Ceases to meet any criterion listed
in § 510.205.
(ii) Is readmitted to any participant
hospital for another anchor
hospitalization.
(iii) Initiates an LEJR episode under
BPCI.
(iv) Dies.
(2) For performance year 3, the
participant hospital did not submit a
participation election letter that was
accepted by CMS to continue
participation in the model.
■ 7. Section 510.300 is amended by
revising paragraphs (b)(6) to read as
follows:
§ 510.300 Determination of qualityadjusted episode target prices.
*
*
*
*
*
(b) * * *
(6) Exclusion of incentive programs
and add-on payments under existing
Medicare payment systems. Certain
incentive programs and add-on
payments are excluded from historical
episode payments by using, with certain
modifications, the CMS Price (Payment)
Standardization Detailed Methodology
used for the Medicare spending per
beneficiary measure in the Hospital
Value-Based Purchasing Program.
*
*
*
*
*
■ 8. Section 510.305 is amended by
revising paragraphs (d)(1) and (e)(1)(i)
and adding paragraph (k) to read as
follows:
§ 510.305 Determination of the NPRA and
reconciliation process.
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*
*
*
(d) * * *
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*
*
17:48 Nov 30, 2017
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(1) Beginning 2 months after the end
of each performance year, CMS does all
of the following:
(i) Performs a reconciliation
calculation to establish an NPRA for
each participant hospital.
(ii) For participant hospitals that
experience a reorganization event in
which one or more hospitals reorganize
under the CCN of a participant hospital
performs—
(A) Separate reconciliation
calculations (during both initial and
subsequent reconciliations for a
performance year) for each predecessor
participant hospital for episodes where
anchor hospitalization admission
occurred before the effective date of the
reorganization event; and
(B) Reconciliation calculations
(during both initial and subsequent
reconciliations for a performance year)
for each new or surviving participant
hospital for episodes where the anchor
hospitalization admission occurred on
or after the effective date of the
reorganization event.
*
*
*
*
*
(e) * * *
(1) * * *
(i) Determines actual episode
payments for each episode included in
the performance year (other than
episodes that have been canceled in
accordance with § 510.210(b)) using
claims data that is available 2 months
after the end of the performance year.
Actual episode payments are capped at
the amount determined in accordance
with § 510.300(b)(5) for the performance
year or the amount determined in
paragraph (k) of this section for episodes
affected by extreme and uncontrollable
circumstances.
*
*
*
*
*
(k) Extreme and uncontrollable
circumstances adjustment. (1) The
episode spending adjustments specified
in paragraph (k)(2) of this section apply
for a participant hospital that has a CCN
primary address that meets both of the
following:
(i) Is located in an emergency area
during an emergency period, as those
terms are defined in section 1135(g) of
the Act, for which the Secretary has
issued a waiver under section 1135; and
(ii) Is located in a county, parish, or
tribal government designated in a major
disaster declaration under the Stafford
Act.
PO 00000
Frm 00040
Fmt 4701
Sfmt 9990
(2)(i) For a non-fracture episode with
a date of admission to the anchor
hospitalization that is on or within 30
days before the date that the emergency
period (as defined in section 1135(g) of
the Act) begins, actual episode
payments are capped at the target price
determined for that episode under
§ 510.300.
(ii) For a fracture episode with a date
of admission to the anchor
hospitalization that is on or within 30
days before or after the date that the
emergency period (as defined in section
1135(g) of the Act) begins, actual
episode payments are capped at the
target price determined for that episode
under § 510.300.
9. Section 510.410 is amended by
adding paragraph (b)(1)(i)(G) to read as
follows:
■
§ 510.410
Compliance enforcement.
*
*
*
*
*
(b) * * *
(1) * * *
(i) * * *
(G) Failing to participate in CJR
model-related evaluation activities
conducted by CMS or its contractors or
both.
*
*
*
*
*
■ 10. Section 510.605 is amended by
revising paragraph (c)(2) to read as
follows:
§ 510.605 Waiver of certain telehealth
requirements.
*
*
*
*
*
(c) * * *
(2) CMS waives the payment
requirements under section
1834(m)(2)(B) of the Act to allow the
distant site payment for telehealth home
visit HCPCS codes unique to this model.
*
*
*
*
*
PART 512—[Removed and Reserved]
■
11. Part 512 is removed and reserved.
Dated: November 22, 2017.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: November 28, 2017.
Eric D. Hargan,
Acting Secretary, Department of Health and
Human Services.
[FR Doc. 2017–25979 Filed 11–30–17; 8:45 am]
BILLING CODE 4120–01–P
E:\FR\FM\01DER3.SGM
01DER3
Agencies
[Federal Register Volume 82, Number 230 (Friday, December 1, 2017)]
[Rules and Regulations]
[Pages 57066-57104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25979]
[[Page 57065]]
Vol. 82
Friday,
No. 230
December 1, 2017
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 510 and 512
Medicare Program; Cancellation of Advancing Care Coordination Through
Episode Payment and Cardiac Rehabilitation Incentive Payment Models;
Changes to Comprehensive Care for Joint Replacement Payment Model:
Extreme and Uncontrollable Circumstances Policy for the Comprehensive
Care for Joint Replacement Payment Model; Final Rule
Federal Register / Vol. 82 , No. 230 / Friday, December 1, 2017 /
Rules and Regulations
[[Page 57066]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 510 and 512
[CMS-5524-F and IFC]
RIN 0938-AT16
Medicare Program; Cancellation of Advancing Care Coordination
Through Episode Payment and Cardiac Rehabilitation Incentive Payment
Models; Changes to Comprehensive Care for Joint Replacement Payment
Model: Extreme and Uncontrollable Circumstances Policy for the
Comprehensive Care for Joint Replacement Payment Model
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule; interim final rule with comment period.
-----------------------------------------------------------------------
SUMMARY: This final rule cancels the Episode Payment Models (EPMs) and
Cardiac Rehabilitation (CR) Incentive Payment Model and rescinds the
regulations governing these models. It also implements certain
revisions to the Comprehensive Care for Joint Replacement (CJR) model,
including: Giving certain hospitals selected for participation in the
CJR model a one-time option to choose whether to continue their
participation in the model; technical refinements and clarifications
for certain payment, reconciliation and quality provisions; and a
change to increase the pool of eligible clinicians that qualify as
affiliated practitioners under the Advanced Alternative Payment Model
(Advanced APM) track. An interim final rule with comment period is
being issued in conjunction with this final rule in order to address
the need for a policy to provide some flexibility in the determination
of episode costs for providers located in areas impacted by extreme and
uncontrollable circumstances.
DATES: Effective Date: These final and interim final regulations are
effective on January 1, 2018.
Comment Period: To be assured consideration, comments on the
interim final rule with comment period presented in section III. of
this document must be received at one of the addresses provided in the
ADDRESSES section no later than 5 p.m. EST on January 30, 2018.
FOR FURTHER INFORMATION CONTACT: Nora Fleming, (410) 786-6908.
For questions related to the CJR model: CJR@cms.hhs.gov.
For questions related to the EPMs: EPMRULE@cms.hhs.gov.
SUPPLEMENTARY INFORMATION:
I. Executive Summary and Background
A. Executive Summary
1. Purpose
The purpose of this final rule is to finalize our proposal to
cancel the Episode Payment Models (EPMs) and the Cardiac Rehabilitation
(CR) Incentive Payment Model, established by the Center for Medicare
and Medicaid Innovation (Innovation Center) under the authority of
section 1115A of the Social Security Act (the Act) and to rescind the
regulations at 42 CFR part 512. Additionally, this final rule finalizes
our proposal to make participation voluntary for all hospitals in
approximately half of the geographic areas selected for participation
in the Comprehensive Care for Joint Replacement (CJR) model (33 of 67
Metropolitan Statistical Areas [MSAs] selected; see 80 FR 73299 Table
4) and for low-volume and rural hospitals in all of the geographic
areas selected for participation in the CJR model, beginning in
performance year 3. It also implements several technical refinements
and clarifications for certain CJR model payment, reconciliation, and
quality provisions, and finalizes our proposed change to the criteria
for the Affiliated Practitioner List to broaden the CJR Advanced
Alternative Payment Model (Advanced APM) track.
As stated in the proposed rule, we note that reevaluation of
policies and programs, as well as revised rulemaking, are within an
agency's discretion, especially after a change in Administration. The
EPMs and the CR Incentive Payment Model were designed and implemented
as mandatory payment models via notice-and-comment rulemaking to test
the effects of bundling cardiac and orthopedic care. The CJR model was
also established as a mandatory payment model via notice-and-comment
rulemaking to test the effects of bundling orthopedic episodes
involving lower extremity joint replacements. The CJR model began on
April 1, 2016 and is currently in its second performance year.
While we continue to believe that cardiac and orthopedic episode
models offer opportunities to redesign care processes and improve
quality and care coordination while lowering spending, we determined
after careful review that it was necessary to propose to rescind the
regulations at 42 CFR part 512, which relate to the EPMs and CR
Incentive Payment Model, and reduce the scope of the CJR model for the
following reasons. As stated in the proposed rule, we believe that
requiring hospitals to participate in additional episode payment models
at this time is not in the best interest of the Agency or the affected
providers. Many providers are currently engaged in voluntary CMS
initiatives, and we expect to continue offering initiatives, including
episode-based payment models. Similarly, we also believe that reducing
the number of providers required to participate in the CJR model will
allow us to continue to evaluate its effects while limiting the
geographic reach of our current mandatory models. As we mentioned in
the proposed rule, we considered altering the design of the EPMs and
the CR Incentive Payment Model to allow for voluntary participation and
to take into account other feedback on the models. However, we noted
that this would potentially involve restructuring the model design,
payment methodologies, financial arrangement provisions, and/or quality
measures, and we did not believe that such alterations would offer
providers enough time to prepare, given the planned January 1, 2018
start date. In addition, if at a later date we test these or similar
models, we would not expect to implement them through rulemaking if
made voluntary but would employ the methods used to implement other
voluntary models.
Finally, as stated in the proposed rule, we believe that cancelling
the EPMs and CR Incentive Payment Model, as well as altering the scope
of the CJR model, offers CMS flexibility to design and test other
episode-based payment models while evaluating the ongoing CJR model.
The CJR model has been operational for over a year and a half, and we
have begun to provide participant hospitals initial financial and
quality results from the first performance year. In many cases, CJR
participant hospitals have invested in care redesign, and we want to
recognize such commitments to improvement while reducing the number of
hospitals that are required to participate.
We sought public comment on the proposals contained in the August
17, 2017 proposed rule (82 FR 39310 through 39333), and also on any
alternatives considered.
2. Summary of Costs and Benefits
In the proposed rule, we stated that we did not anticipate that the
cancellation of the EPMs and CR Incentive Payment Model prior to the
start of those models would have any
[[Page 57067]]
costs to providers. As discussed in section II.A. of this final rule
and interim final rule with comment period, some commenters noted that
providers who assumed that the EPMs would begin on January 1, 2018, had
incurred preparatory costs in terms of care pathway redesign and the
creation of care coordinator positions. However, as the commenters did
not specifically quantify these costs, we are unable to estimate them
here. As shown in our impact analysis in section V. of this final rule
and interim final rule with comment period, we estimate that the CJR
model changes will reduce the previously projected CJR model savings
(82 FR 603) by a total of approximately $108 million. Of the total
projected reduction in savings, $106 million is attributable to CJR
model changes over the final three performance years while
approximately $2 million is attributable to the extreme and
uncontrollable circumstance policy. Accordingly, we estimate that the
total CJR model impact after the changes in this final rule will be
$189 million, instead of $294 million ($106 million less in savings),
over the remaining 3-year performance period (2018 through 2020) of the
CJR model. Additionally, we estimate that the financial impacts
resulting from the interim final rule with comment period will be a
further reduction in savings of approximately $2 million during 2017,
noting that we are implementing the extreme and uncontrollable
circumstances policy (via an interim final rule with comment) in this
rule for the 2017 reconciliation that will occur beginning in March of
2018. Our impact analysis has some degree of uncertainty and makes
assumptions as discussed in section V. of this final rule and interim
final rule with comment period. In addition to these estimated impacts,
as with many of the Innovation Center models, the goals that
participants are attempting to achieve include improving overall
quality of care, enhancing participating provider infrastructure to
support better care management, and reducing costs. We anticipate there
will continue to be a broader focus on care coordination and quality
improvement through the CJR model among hospitals and other providers
and suppliers within the Medicare program that may lead to better care
management and improved quality of care for beneficiaries.
3. Interim Final Rule Regarding Significant Hardship Due to Extreme and
Uncontrollable Circumstances in the CJR Model
We are issuing this interim final rule with comment period in
conjunction with this final rule in order to address the need for a
policy to provide some flexibility in the determination of episode
costs for CJR hospitals located in areas impacted by extreme and
uncontrollable circumstances. Specifically, this policy would apply to
CJR hospitals located in a county, parish, U.S. territory, or tribal
government designated in a major disaster declaration under the
Stafford Act, if as a result of the same major disaster the Secretary
of Health and Human Services (the Secretary) authorized waivers under
section 1135 of the Act.
B. Background
Under the authority of section 1115A of the Act, through notice-
and-comment rulemaking, CMS' Center for Medicare and Medicaid
Innovation (Innovation Center) established the CJR model in a final
rule titled ``Medicare Program; Comprehensive Care for Joint
Replacement Payment Model for Acute Care Hospitals Furnishing Lower
Extremity Joint Replacement Services'' published in the November 24,
2015 Federal Register (80 FR 73274 through 73554) (referred to in this
final rule as the ``CJR model final rule''). We established three new
models for acute myocardial infarction, coronary artery bypass graft,
and surgical hip/femur fracture treatment episodes of care, which are
collectively called the Episode Payment Models (EPMs), created a
Cardiac Rehabilitation Incentive Payment Model (CR Incentive Payment
Model), and revised several existing provisions for the CJR model, in a
final rule titled ``Advancing Care Coordination Through Episode Payment
Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and
Changes to the Comprehensive Care for Joint Replacement Model''
published in the January 3, 2017 Federal Register (82 FR 180) (referred
to in this final rule as the ``EPM final rule'').
The effective date for most of the provisions of the EPM final rule
was February 18, 2017, and in the EPM final rule we specified an
effective date of July 1, 2017 for certain CJR model regulatory changes
intended to align with a July 1, 2017 applicability, or start, date for
the EPMs and CR Incentive Payment Model. On January 20, 2017, the
Assistant to the President and Chief of Staff issued a memorandum
titled ``Regulatory Freeze Pending Review'' that instructed Federal
agencies to temporarily postpone the effective date for 60 days from
the date of the memorandum for regulations that had been published in
the Federal Register but had not taken effect, for purposes of
reviewing the rules and considering potentially proposing further
notice-and-comment rulemaking. Accordingly, on February 17, 2017, we
issued a final rule in the Federal Register (82 FR 10961) to delay
until March 21, 2017 the effective date of any provisions of the EPM
final rule that were to become effective on February 18, 2017. We
subsequently issued an interim final rule with comment (IFC) period in
the Federal Register on March 21, 2017 (referred to in this final rule
as the ``March 21, 2017 IFC'') (82 FR 14464). The March 21, 2017 IFC
further delayed the effective date of the provisions that were to take
effect March 21, 2017 until May 20, 2017, further delayed the
applicability date of the EPMs and CR Incentive Payment Model
provisions until October 1, 2017, and further delayed the effective
date of the conforming CJR model changes until October 1, 2017. In the
March 21, 2017 IFC, we also solicited public comment on further
delaying the applicability date for the EPMs and CR Incentive Payment
Model provisions, as well as the effective date for the conforming
changes to the CJR model from October 1, 2017 until January 1, 2018 to
allow for additional notice-and-comment rulemaking. Based on the public
comments we received in response to the March 21, 2017 IFC, we
published a final rule (referred to in this final rule as the ``May 19,
2017 final delay rule'') on May 19, 2017 (82 FR 22895) to finalize a
January 1, 2018 applicability date for the EPMs and CR Incentive
Payment Model provisions, as well as to finalize a January 1, 2018
effective date for the conforming changes to the CJR model
(specifically amending Sec. 510.2; adding Sec. 510.110; amending
Sec. 510.120; amending Sec. 510.405; amending Sec. 510.410; revising
Sec. 510.500; revising Sec. 510.505; adding Sec. 510.506; and
amending Sec. 510.515). Additional changes to the CJR model, in
accordance with the March 21, 2017 IFC, took effect May 20, 2017.
As we stated in the May 19, 2017 final delay rule (82 FR 22897), we
received a number of comments on the models that did not relate to the
start date change. These additional comments suggested that we
reconsider or revise various model aspects, policies and design
components; in particular, many of these comments suggested that we
should make participation in the models voluntary instead of mandatory.
We did not respond to these comments in the May 19, 2017 final delay
rule, as the comments were out of scope of that rulemaking, but we
stated that we might
[[Page 57068]]
take them into consideration in future rulemaking.
In the August 17, 2017 Federal Register (82 FR 39310 through
39333), we published a proposed rule that proposed to cancel the EPMs
and CR Incentive Payment Model, and to rescind the regulations
governing these models, as well as implement certain revisions to the
CJR model.
We received approximately 85 timely pieces of correspondence
containing multiple comments in response to the August 17, 2017
proposed rule. In the following sections of this final rule and interim
final rule with comment period, we discuss our specific proposals,
public comment, and our responses to those comments.
II. Provisions of the Proposed Regulations and Analysis of and Response
to Public Comments
A. Cancellation of EPMs and Cardiac Rehabilitation Incentive Payment
Model
In the January 3, 2017 EPM final rule, we established three bundled
payment models for acute myocardial infarction (AMI), coronary artery
bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT)
episodes, and a Cardiac Rehabilitation (CR) Incentive Payment Model.
These models were similar to other Innovation Center models and focused
on complex cases where we believe improvements in care coordination and
other care redesign efforts offer the potential for improved patient
outcomes and more efficient resource use. Many stakeholders, including
commenters responding to the March 21, 2017 IFC, expressed concerns
about provider burden and challenges these new models would present. We
noted in the May 19, 2017 final delay rule (82 FR 22896), which
finalized a January 1, 2018 start date for the EPMs and the CR
Incentive Payment Model, that we would engage in notice-and-comment
rulemaking on these models if warranted. We also noted that we received
47 submissions in response to the March 21, 2017 IFC. These responses
contained a mix of in- and out-of-scope comments (82 FR 22899). In the
May 19, 2017 final delay rule (82 FR 22897), we noted that in addition
to commenting on the change to the effective date for the EPMs and CR
Incentive Payment Model and certain provisions of the CJR model,
commenters highlighted concerns with the models' design, including but
not limited to: Participation requirements, data, pricing, quality
measures, episode length, CR and skilled nursing facility (SNF)
waivers, beneficiary exclusions and notification requirements,
repayment, coding, and model overlap issues. Specifically, many
commenters were opposed to the mandatory participation requirements,
arguing that these models would force many providers who lack
familiarity, experience, or proper infrastructure to quickly support
care redesign efforts for a new bundled payment system. Many commenters
were concerned that these mandatory models might harm patients and
providers before CMS knows how these models might affect access to
care, quality, or outcomes. Additionally, commenters were concerned
that unrelated services would be incorporated into episode prices under
the finalized price-setting methodology, in which we base prices on MS-
DRGs and use clinical review to identify excluded, unrelated services
rather than identifying included, related services. Commenters also
expressed concern that this pricing approach would result in diagnosis
codes classifying certain services as included, when in fact these
services have no clinical relevance to the episode(s). Commenters were
further concerned with the fact that CMS would progressively
incorporate regional data into EPM target prices, where 100 percent of
the EPM target price would be based on regional data by performance
year 4. Commenters also took issue with the quality measures
established for the SHFFT model, stating that these measures are not
clinically related to the target population and are inappropriate for
use in assessing the care provided to beneficiaries in the SHFFT model.
In addition, commenters requested revisions to the CABG EPM to allow
participants the option to use a CABG composite score developed by the
Society of Thoracic Surgeons (STS) rather than the all-cause mortality
measure.
Commenters also expressed concerns about the design of the CR
Incentive Payment Model waivers. Commenters stated that current direct
supervision requirements would continue to contribute to a lack of
access to cardiac rehabilitation services and would inhibit providers'
ability to redesign care for the CR Incentive Payment Model. Commenters
suggested broadening the CR physician supervision waiver because the
current waivers would not cover non-model beneficiaries who might be
obtaining services concurrently with model participants and are
therefore not sufficient. Other commenters were concerned with the
precedence rules for model overlap with Models 2, 3 and 4 of the
Innovation Center's Bundled Payments for Care Improvement (BPCI)
initiative.
In the May 19, 2017 final delay rule (82 FR 22895), we stated that
we might consider these public comments in future rulemaking. Based on
our additional review and consideration of this stakeholder feedback,
we concluded that certain aspects of the design of the EPMs and the CR
Incentive Payment Model should be improved and more fully developed
prior to the start of the models, and that moving forward with the
implementation of the EPMs and CR Incentive Payment Model as put forth
in the January 3, 2017 EPM final rule would not be in the best interest
of beneficiaries or providers at this time. Based on our acknowledgment
of the many concerns about the design of these models articulated by
stakeholders, we proposed to cancel the EPMs and CR Incentive Payment
Model before they began. Accordingly, we proposed to rescind 42 CFR
part 512 in its entirety. We sought public comment on our proposal to
cancel the EPMs and CR Incentive Payment Model.
We noted that, if the proposal to cancel the EPMs and CR Incentive
Payment Model was finalized, providers interested in participating in
bundled payment models would still have an opportunity to do so during
calendar year (CY) 2018 via new bundled payment models. The Innovation
Center expects to develop new bundled payment model(s) during CY 2018
that would be designed to meet the criteria to be an Advanced APM. We
also noted the strong evidence base and other positive stakeholder
feedback that we have received regarding the CR Incentive Payment
Model. As we further develop the Innovation Center's portfolio of
models, we may revisit this model and if we do, we will consider
stakeholder feedback.
Comment: The majority of commenters supported cancellation of the
EPMs, although many of these commenters noted that they support the
general shift toward value-based payment models. Many of these
commenters noted they supported deregulation in general and supported
CMS' efforts to ease the administrative burden of mandatory models,
voicing concern that mandatory models unduly burden hospitals who may
be unprepared for model participation and compromise patient access and
quality of care delivery. Other commenters stated that mandatory models
disadvantage inexperienced or under-resourced providers, and are too
complex. Commenters argued these providers, many of whom are smaller
hospitals or systems, face logistical and
[[Page 57069]]
practical challenges that would be exacerbated by comparing all
providers, and their varying levels of resources, to one another
through a mandatory initiative. Commenters also argued that providers
need models with greater flexibility, support, and incentives.
Several commenters supporting the cancellation of the EPMs stated
that mandatory models fail to solicit and incorporate stakeholder
feedback, and that CMS moved too quickly in finalizing the EPMs.
Commenters stated that the models should be improved and more fully
developed prior to the start of the models. Commenters highlighted
concerns with many aspects of the models' design, including:
Participation requirements; episode selection; data; pricing,
especially the movement to regional pricing under the models; quality
measures used in the models, especially for the CABG and SHFFT models;
episode length; clinical homogeneity (or lack thereof) of the included
patient population; episode inclusions and exclusions; CR and skilled
nursing facility (SNF) waivers; beneficiary exclusions and notification
requirements; reconciliation and repayment policies; and model overlap
issues that impact providers already participating in APMs or other
programs. Commenters also stated that there is insufficient evidence
and evaluation of the efficacy of mandatory bundled payment models.
They stated that the EPMs were not built upon the success of existing
cardiac models, and that CMS should use this opportunity to gather
broad stakeholder feedback.
Response: We thank commenters for their support for our proposal to
cancel the EPMs. We agree with commenters' assertions that we should
reduce provider burden when warranted, while maintaining the ability
for providers to participate in future opportunities that shift towards
value-based payment models. We continue to believe it is important to
test and evaluate the effects of episode payment approaches on a broad
range of Medicare providers. However, we agree with commenters that the
design of the specific EPMs we are cancelling in this final rule and
interim final rule with comment period should be further studied and
refined, and we also agree with commenters that seeking additional
stakeholder input in future model design is important. We note that in
the recent Request for Information (posted on the CMS Web site at
https://innovation.cms.gov/Files/x/newdirection-rfi.pdf), CMS solicited
comments through November 20, 2017 on suggestions for a new direction
for the Innovation Center. CMS will carefully evaluate any input
received regarding future models and the design of these models.
Comment: Several commenters contended that CMS lacks the authority
to mandate participation in Innovation Center models. Commenters stated
they do not believe that section 1115A of the Act provides CMS with the
authority to mandate provider and supplier participation in Innovation
Center models. These commenters stated that mandatory provider and
supplier participation in models runs counter to both the letter and
spirit of the law that established the Innovation Center, including the
scope of its authority to test models under section 1115A of the Act
and the directive to make recommendations to Congress set forth in
section 1115A(g) of the Act. A commenter argued that the EPMs are a
prohibited expansion in scope of the CJR model.
Response: We disagree that the Innovation Center lacks the
authority to test mandatory models under section 1115A of the Act.
Section 1115A of the Act authorizes the Secretary to test innovative
payment and service delivery models to reduce program expenditures
while preserving or enhancing the quality of care furnished to
Medicare, Medicaid, and Children's Health Insurance Program (CHIP)
beneficiaries. Section 1115A of the Act does not specify that
participation in models must be voluntary. Moreover, the Secretary has
authority to establish regulations to carry out the administration of
Medicare. Specifically, the Secretary has authority under both sections
1102 and 1871 of the Act to implement regulations as necessary to
administer Medicare, including testing these Medicare payment and
service delivery models. However, as we discuss later in this section,
the Innovation Center will approach new model design with a focus on
reducing provider burden. Finally, we disagree that the EPMs were an
expansion of CJR. The SHFFT Model was designed as a separate and
distinct model from the CJR model, utilizing different MS-DRGs.
Comment: Some commenters noted that the movement away from
mandatory models represents a change in priorities from the previous
administration. They acknowledged this change in preference from
mandatory to voluntary model design but questioned that CMS continue to
work toward achieving the goals of bundled payment models. They stated
their desire to see CMS strike the best balance possible between
reducing provider burden and incentivizing health system change that
will allow for broad opportunities for Advanced APM participation
beginning in CY 2018. A commenter noted that easing the regulatory
burden on health systems and continuing the transition into value-based
care need not be mutually exclusive goals.
Response: We agree with the commenter that easing regulatory burden
on health systems and continuing the transition into value-based care
are not mutually exclusive goals. As we noted in section I. of this
final rule and interim final rule with comment period, review and
reevaluation of policies and programs, as well as revised rulemaking,
are within an agency's discretion, and that discretion is often
exercised after a change in administration occurs. CMS is setting a new
direction for the Innovation Center to promote patient-centered care
and test market-driven reforms that empower beneficiaries as consumers,
provide price transparency, increase choices and competition to drive
quality, reduce costs, and improve outcomes. We note that in the recent
Request for Information (posted on the CMS Web site at https://innovation.cms.gov/Files/x/newdirection-rfi.pdf), CMS solicited
comments through November 20, 2017 on suggestions for a new direction
for the Innovation Center. As stated in the RFI, CMS believes that
while existing partnerships with healthcare providers, clinicians,
states, payers and stakeholders have generated important value and
lessons, CMS is setting a new direction for the Innovation Center. New
models will be designed to reduce burdensome requirements and
unnecessary regulations to the extent possible to allow physicians and
other providers to focus on providing high-quality healthcare to their
patients. We appreciate the commenters' understanding of this change in
priorities, and we reiterate CMS's commitment to developing models that
reward value-based care and allow opportunities for Advanced APM
participation for 2018 and future years.
Comment: Multiple commenters expressed concern that the
cancellation of the EPMs will signal to the innovation community (that
is, those who invest valuable resources into the development of new
technologies and systems with the goal of transforming healthcare
delivery) that healthcare payment policy is subject to the uncertainty
of ad hoc reversal of transformative initiatives, thus stifling further
innovation efforts. A commenter stated that cancellation of the EPMs
will send signals that will slow the transformation of healthcare and
confuse providers regarding the urgency
[[Page 57070]]
of system change from FFS to value-based payment. Another commenter
stated that requiring providers to adapt to innovative, value-based
payment models is preferable to reinforcing current, financially
unsustainable payment models that incentivize the delivery of services
without consideration for their cost, quality, and outcomes.
Response: We acknowledge the commenters' concerns about the signals
that cancellation of the EPMs could send regarding our commitment to
moving away from FFS toward value-based payment. We reiterate that CMS
continues to explore new models to incentivize innovation and value-
based payment and is committed to innovations that will foster an
affordable, accessible healthcare system that puts patients first.
Comment: Many commenters objected to the outright cancellation of
EPMs and stated that the models should be offered on a voluntary basis.
These commenters expressed concern about the precedent established by
the cancellation of a planned model after health systems have expended
significant time and resources to prepare for participation in the
initiative, and asserted that, without offering the option of voluntary
participation, we would disadvantage health systems that had already
made substantial investments in care redesign in anticipation of
participating in EPMs, as this would not provide opportunity for return
on those investments. Specifically, several commenters noted that since
the finalization of the EPMs, providers have invested considerable time
and funding in developing the necessary programs, processes,
infrastructure and financial relationships in preparation for these
programs. Commenters stated that while there may be limited or minimal
additional costs required going forward with the cancellation of these
models, it is worth nothing that significant investment was made by
various stakeholders in preparation for them, particularly as they had
been finalized by CMS. Multiple commenters stated that, since the
finalization of the rule implementing EPMs, their health systems have
already made significant investments and expended resources on care
redesign to meet the payment models' requirements. While these
commenters did not quantify the cost of these investments they noted
that the investments included hiring care coordinators, re-engineering
the process for admission from the Emergency Department for hip and
femur fractures, and improving communication between their health
system's regional hospitals and its main hospital, such that
innovations in efficient and effective care coordination are already
emerging from this implementation process. One commenter further stated
that preparation for implementing the models resulted in a culture
shift within their organization, especially with respect to
communication and coordination between providers. Another commenter
stated the time clinicians spent preparing for these models is
ultimately a loss for patient care.
Response: We appreciate the commenters' support for voluntary
versions of the EPMs. However, in reviewing the other comments received
in support of the cancellation due to concerns with multiple aspects of
the models, we continue to believe that there would not be enough time
to sufficiently revise the models given the planned January 1, 2018
start date and that implementing these models as originally designed
would not be in the best interest of beneficiaries or providers. We
thank the commenters for their submissions noting that providers have
invested in infrastructure, increased staffing, and care redesign in
response to the mandatory nature of the EPMs. We appreciate these
initiatives taken by hospitals selected for the EPMs and thank them for
bringing these actions to our attention. We note that commenters did
not provide enough detail about the hiring status or educational and
licensing requirements of any care coordinator positions they may have
created and filled (that is, full or part-time, Registered Nurse or
non-Registered Nurse, scope of work, etc.) for us to quantify an
economic impact for these case coordination investments. Likewise
investments in re-engineering of processes and communication systems
were not quantified and thus preclude us from attempting to estimate a
dollar value impact. We believe that these investments and preparations
will position providers for successful participation in future
initiatives that may provide opportunities for return on these
investments. Further we believe hospitals that made preparations,
especially those that have created new care coordinator positions that
they intend to keep staffed and those that have implemented process
improvements that they intend to keep in place, are likely to provide
enhanced patient care by improving the efficiency and quality of care
for Medicare beneficiaries and improving the coordination of care from
the initial hospitalization through recovery, rather than reverting to
previous practices that may not have placed as much emphasis on
efficiency, quality, and care coordination. As we remain committed to
moving toward value-based payment, we believe that investments in care
coordination and quality improvement will ultimately benefit both
providers and patients.
Comment: Some commenters stated their opposition to the
cancellation of EPM models and stated that they should be implemented
as mandatory models. A commenter stated the belief that providers would
have adapted to the models and beneficiaries' access to care would not
have been affected, and suggested that, rather than cancelling the
models, CMS should further delay the start date to allow providers more
time to prepare for implementation of the models. Other commenters
noted that mandatory models, compared to voluntary models, create a
more reliable experiment with the ability to generate evidence of
bundled payments' effectiveness, and they increase the chances of
bringing bundled payments to scale nationally. Another commenter stated
that they support mandatory models because they are necessary to
eliminate the ``pilot program'' mentality of providers. A commenter
noted that voluntary models provide opportunities for gaming. Another
commenter asserted that the rationale used by CMS to rescind the EPMs
is flawed and contradicts statements outlined in the EPM final rule.
This commenter further stated that, while there will always be
innovators who will participate in voluntary models and guide their
peers in systematic improvements leading to changes in overall
healthcare delivery, non-participant providers have been reluctant to
accept a change in their clinical practice and as a result have not
demonstrated the clinical improvement that others have seen, due to the
lack of a mandate for change. This commenter expressed concern that
without mandatory models, improvement will not remain consistent and
there will likely be a reversion to ``the norm.'' Another commenter
stated their opposition to the cancellation of EPMs and their belief
that mandatory models should be implemented more broadly. This
commenter further stated their belief that the cancellation of EPMs
represents an attempt to delay the move to value-based reimbursement
and maintain the FFS reimbursement model, which will benefit the
financial interests of healthcare companies at the expense of the well-
being and economic interests of the healthcare consumer and American
taxpayer. Another commenter similarly stated their opposition to the
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cancellation of EPMs based on their concern about the long term fiscal
solvency of Medicare.
Response: We appreciate the commenters pointing out some of the
specific benefits of mandatory, as opposed to voluntary, models. We
agree generally that mandatory models have certain advantages over
voluntary models, and we have had to weigh those advantages against our
goals of minimizing provider burden at this time and against the
design-related concerns raised by stakeholders for these specific EPM
and CR Incentive Payment Models. Furthermore, although we monitor
provider behavior to be sure that hospitals' implementation strategies
are in compliance with the CJR model and other Medicare requirements,
and to identify individual providers that merit additional
investigation, educational outreach, or referral to program integrity
contractors, cancelling the EPMs will provide more time to fully
evaluate the impact of CJR.
However, we take seriously the commenters' concerns about the
urgency of continuing our movement toward value-based care in order to
accommodate an aging population with increasing levels of chronic
conditions, while also acting as responsible stewards of the Medicare
Trust Funds. We continue to believe that value-based payment
methodologies will play an essential role in lowering costs and
improving quality of care, which will be necessary in order to maintain
Medicare's fiscal solvency. At this time, we believe that focusing on
the development of different bundled payment models and engaging more
providers in these models is the best way to drive health system change
while minimizing provider burden and maintaining patient access to
care.
Comment: We received many comments in support of our proposal to
cancel the CR Incentive Payment model. Commenters supporting our
proposal to cancel the CR Incentive Payment Model lauded the
decelerated implementation of mandatory models and noted that the
mandatory CR Incentive Payment Model would have created additional
undue administrative burden for providers. Many of these commenters
suggested that the CR Incentive Payment Model would strain hospitals'
limited resources, leading to decreased access to care or quality of
care.
Response: We appreciate some commenters' support of our proposal to
cancel the mandatory CR Incentive Payment Model. We agree with the
commenters that it is important to lessen provider burden where we can.
Comment: Several commenters opposed CMS' proposal to cancel the CR
Incentive Payment Model. These commenters stated that they saw the CR
Incentive Payment Model as an important step toward value-based
payments and that cancelling the CR Incentive Payment Model would
result in a missed opportunity to collect evidence. Commenters opposing
the cancellations also cited the financial investments providers made
in preparation for the model. Some of these commenters felt that a
mandatory cardiac model would force otherwise-hesitant providers to
focus on enhanced care management, improved infrastructure, and cost
reduction. Several commenters cited evidence of the effectiveness of
cardiac rehabilitation and its relatively low utilization levels as
support for continuing the model, stating that it would be an effective
test with or without concurrent EPM implementation. A commenter stated
that implementing the CR Incentive Payment Model alone would provide
independent testing of its effects, and some commenters requested that
the model continue as a limited pilot.
Response: We thank commenters for their input and note that we
agree with the premise cited by commenters that the CR Incentive
Payment Model could provide an opportunity to collect evidence and may
support provision of an under-utilized yet effective intervention.
However, we believe that the nature of the CR Incentive Payment Model
does not permit sufficient provider choice and our intention in
removing this mandatory model at this time is to enhance providers'
ability to determine the models and initiatives that suit their
organizations while increasing quality and value-based payments.
Additionally, we note the obstacles presented by the cancellation of
the cardiac EPMs and conforming regulations with which this model is
aligned. Due to the manner in which the regulations guiding the cardiac
EPMs were interwoven with those of the CR Incentive Payment Model, we
do not believe it would be feasible to continue the mandatory CR
Incentive Payment Model alone at this time since we are cancelling the
EPMs and rescinding all of the associated regulations. However, as we
stated in the proposed rule, as we further develop the Innovation
Center's portfolio of models, we may revisit the concept of a model
with a focus on cardiac rehabilitation and, if we do, will consider
stakeholder feedback.
Comment: Many commenters stated that the CR Incentive Payment Model
required improvements prior to implementation, including many who
requested that it continue as a voluntary model. A few requested that
we solicit more stakeholder feedback throughout model development,
while others requested altered or new model waivers. Many commenters
supporting cancellation of the CR Incentive Payment Model recommended
that any potential future iterations of the model should be separate
from other APMs. A commenter asserted that the CR Incentive Payment
Model could be effective without incentivizing such a high number of CR
or intensive cardiac rehabilitation (ICR) services. Another commenter
recommended allowing shared financial arrangements among CR programs.
Response: We thank commenters for suggested improvements to the CR
Incentive Payment Model, and would consider this input for any future
cardiac rehabilitation models.
Comment: Many commenters encouraged CMS to expedite the
introduction of the new voluntary bundled payment models that would
meet the criteria to be Advanced APMs. Commenters noted making new
voluntary models available as soon as possible will allow hospitals to
capitalize on the preparations they made in anticipation of the EPMs
and will also allow them to partner with clinicians to provide better
quality, more efficient care. Commenters are concerned that the
ambiguity surrounding the future of EPMs has posed challenges for
hospitals attempting to determine where and how to invest in
implementation. Commenters supported the development of new models that
meet the Advanced APM definition under the Quality Payment Program and
urged CMS to build upon the lessons learned in the Bundled Payments for
Care Improvement (BPCI) initiative. A commenter urged CMS to align
advancements included in the CJR and EPM models into a new bundled
payment model. A commenter recommended that CMS ensure that a voluntary
model is available when the current BPCI initiative expires. Several
commenters urged CMS to implement new voluntary models before the
proposed voluntary election period for CJR (January 1-January 31, 2018)
to give these providers as well as BPCI participants adequate time to
prepare for future models. Commenters suggested that in the
alternative, CMS should implement new voluntary models prior to BPCI's
conclusion in September 2018. A commenter urged CMS to limit the size
and scope of future models and ensure open and
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transparent communication with stakeholders during model development.
Commenters suggested that CMS should release data on baselines and
targets in advance of a model's application deadline to allow entities
to prepare for the most appropriate models. Commenters encouraged CMS
to initiate collaborative process between CMS, providers and other
stakeholders as they stated this would result in more robust and
effective models.
Response: We note providers' interest in future bundled payment
models that meet the criteria to be an Advanced APM and are considering
options for developing such models.
Comment: Numerous commenters suggested changes to the overall
design of the EPMs, CR Incentive Payment Model, BPCI initiative, and
CJR model that were outside of the scope of the August 17, 2017
proposed rule. These comments touched on model participation
requirements, data, pricing, choice of quality measures used, episode
length, CR and SNF waivers, beneficiary exclusions and notification
requirements, repayment, coding, model overlap issues, and the
inclusion of depression screening in models. Additionally we received
public comments suggesting alternative model proposals that include
physician-based, outcome-based, procedure-based, specialty-based, and
Medicare Advantage APMs. Commenters recommended that the CJR model and
future models provide more collaboration opportunities and offer
broader waivers of fraud and abuse laws, such as the physician self-
referral law commonly known as the ``Stark Law,'' and the Anti-Kickback
statute. Several commenters stated that the ``Stark Law,'' which they
contend has not been updated statutorily for over 2 decades, is
challenging to work through when developing financial arrangements, as
small, unintentional technical errors on the part of physicians or
staff could lead to heavy penalties under this strict liability
statute, and that the cost of compliance and disclosure can be
prohibitive to small and medium practices who would otherwise want to
participate in new models. Commenters encouraged data transparency and
access to substance abuse claims, an APM Ombudsman, differing episode
durations, a uniform model overlap policy, use of care coordinators,
pricing and reconciliation modifications, different quality measures,
and clarification of certified electronic health record technology
(CEHRT) requirements.
Response: We consider these public comments to be outside of the
scope of the August 17, 2017 proposed rule; and therefore, we are not
addressing them in this final rule and interim final rule with comment
period. We may consider these public comments in future rulemaking.
Summary of Final Decisions: We are finalizing our proposal to
cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation
(CR) Incentive Payment Model and to rescind the regulations at 42 CFR
part 512.
B. Changes to the CJR Model Participation Requirements
1. Voluntary Participation Election (Opt-In) for Certain MSAs and Low-
Volume and Rural Hospitals
The CJR model began on April 1, 2016. The model is currently
nearing completion of the second performance year, which includes
episodes ending on or after January 1, 2017 and on or before December
31, 2017. The third performance year, which includes all CJR episodes
ending on or after January 1, 2018 and on or before December 31, 2018,
would necessarily incorporate episodes beginning before January 2018.
The fifth performance year will end on December 31, 2020. Currently,
with limited exceptions, hospitals located in the 67 geographic areas
selected for participation in the CJR model must participate in the
model through December 31, 2020; that is, their participation in the
CJR model is mandatory unless the hospital is an episode initiator for
a lower-extremity joint replacement (LEJR) episode in the risk-bearing
period of Models 2 or 4 of the BPCI initiative. Hospitals with a CCN
primary address in one of the 67 selected geographic areas selected for
CJR that participated in Model 1 of the BPCI initiative, which ended on
December 31, 2016, began participating in the CJR model when their
participation in the BPCI initiative ended.
Based on smaller, voluntary tests of episode-based payment models
and demonstrations, such as the Acute Care Episode (ACE) demonstration
and the BPCI initiative, that have indicated a potential to improve
beneficiaries' care while reducing costs (see ACE evaluation at:
https://downloads.cms.gov/files/cmmi/ace-evaluationreport-final-5-2-14.pdf and BPCI evaluation at: https://innovation.cms.gov/Files/reports/BPCI-EvalRpt1.pdf), we finalized the CJR model with mandatory
participation in the 67 selected geographic areas so that we could
further test delivery of better care at a lower cost across a wide
range of hospitals, including some hospitals that might not otherwise
participate, in many locations across the country. In the CJR model
final rule (80 FR 73276), we stated that we believed that by requiring
the participation of a large number of hospitals with diverse
characteristics, the CJR model would result in a robust data set for
evaluation of this bundled payment approach, and would stimulate the
rapid development of new evidence-based knowledge. Testing the model in
this manner would also allow us to learn more about patterns of
inefficient utilization of healthcare services and how to incentivize
the improvement of quality for common LEJR procedure episodes.
After further consideration of stakeholder feedback, including
responses we received on the March 21, 2017 IFC, we proposed certain
revisions to the mandatory participation requirements for the CJR model
to allow us to continue to evaluate the effects of the model while
limiting the geographic reach of our current mandatory models.
Specifically, we proposed that the CJR model would continue on a
mandatory basis in approximately half of the selected geographic areas
(that is, 34 of the 67 selected geographic areas), with an exception
for low-volume and rural hospitals, and continue on a voluntary basis
in the other areas (that is, 33 of the 67 selected geographic areas).
The geographic areas for the CJR model are certain Metropolitan
Statistical Areas (MSAs) that were selected following the requirements
in Sec. 510.105 as discussed in the CJR model final rule (80 FR 73297
through 73299). In Sec. 510.2, an MSA is defined as a core-based
statistical area associated with at least one urbanized area that has a
population of at least 50,000. In selecting the 67 MSAs for inclusion
in the CJR model, the 196 eligible MSAs were stratified into 8 groups
based on MSA average wage adjusted historic LEJR episode payments and
MSA population size (80 FR 41207). Specifically, we classified MSAs
according to their average LEJR episode payment into four categories
based on the 25th, 50th and 75th percentiles of the distribution of the
196 potentially selectable MSAs as determined in the exclusion rules as
applied in the CJR model proposed rule (80 FR 41198). This approach
ranked the MSAs relative to one another and created four equally sized
groups of 49. The population distribution was divided at the median
point for the MSAs eligible for potential selection, creating 8 groups.
Of the 196 eligible MSAs, we chose 67 MSAs via a stratified random
selection process as
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discussed in the CJR model final rule (80 FR 73291).
In reviewing our discussion of the MSA selection and the MSA volume
needed to provide adequate statistical power to evaluate the impact of
the model in the CJR model final rule (80 FR 73297), we determined that
reducing the mandatory MSA volume in half by selecting the 34 MSAs with
the highest average wage-adjusted historic LEJR episode payments for
continued mandatory participation could allow us to evaluate the
effects of the CJR model across a wide range of providers, including
some that might not otherwise participate in the model. Higher payment
areas are most likely to have significant room for improvement in
creating efficiencies and greater variations in practice patterns.
Thus, the selection of more expensive MSAs was the most appropriate
approach to fulfilling the overall priorities of the CJR model to
increase efficiencies and savings for LEJR episodes while maintaining
or improving the overall quality of care.
The original determination of the sample size need in the CJR model
final rule was constructed to be able to observe a 2-percent reduction
in wage-adjusted episode spending after 1 year. This amount was chosen
based on the anticipated amount of the discount applied in the target
price. In considering the degree of certainty that would be needed to
generate reliable statistical estimates, we assumed a 20-percent chance
of false positive and a 30-percent chance of a false negative. Using
these parameters, we determined that the number of MSAs needed ranged
from 50 to 150. In order to allow for some degree of flexibility, we
selected 75 MSAs, which were narrowed to 67 due to final exclusion
criteria.
As we reviewed the CJR model for the August 17, 2017 proposed rule,
we noted that, excluding quarterly reconciliation amounts, evaluation
results from BPCI Model 2 indicated possible reductions in fee-for-
service spending of approximately 3 percent on orthopedic surgery
episodes for hospitals participating in the LEJR episode bundle
(https://innovation.cms.gov/Files/reports/bpci-models2-4-yr2evalrpt.pdf). We examined the sample size needed to detect a 3-
percent reduction in CJR model episode spending after 1 year using the
same methodology as described in the CJR model final rule. We
determined that we would be able to meet this standard with 34 MSAs
from the higher cost groups. We noted that we expect that hospitals in
the higher cost MSAs will be able to achieve similar 3-percent savings
given their MSA's relatively high historic episode spending and thus
greater opportunities for improvements, and their experience over the
first 2 performance years of the CJR model. We noted that the proposed
changes to the model, including the focus on higher cost MSAs and the
reduced number of mandatory MSAs, would cause changes to the nature of
the evaluation.
To select the 34 MSAs that would continue to have mandatory
participation (except for low-volume and rural hospitals), we took the
distribution of average wage-adjusted historic LEJR episode payments
for the 67 MSAs using the definition described in the CJR model final
rule, ordered them sequentially by average wage-adjusted historic LEJR
episode payments, and then selected the 34 MSAs with the highest
average payments. We noted that under the proposal to reduce the number
of MSAs with mandatory participation, the remaining 33 MSAs would no
longer be subject to the CJR model's mandatory participation
requirements; that is, hospital participation would be voluntary in
these 33 MSAs.
After dividing the 67 MSAs into 34 mandatory and 33 voluntary MSAs
as described previously, we examined selected MSA characteristics. In
order to determine whether a good balance was maintained across MSA
population size, we examined the number of MSAs below and above the
median population point of the 196 MSAs eligible for potential
selection. We observed that a good balance of MSA population size was
maintained (17 out of 34 mandatory and 17 out of 33 voluntary MSAs had
a population above the median population). While the 34 MSAs that would
continue to have mandatory participation have higher spending on
average, these MSAs all include providers with average cost episodes in
addition to providers with high cost episodes. In general, we noted
that hospitals located in higher cost areas have a greater potential to
demonstrate significant decreases in episode spending. However, within
the higher cost MSAs, there was still significant variation in
characteristics and experiences of the included hospitals. We
anticipated that the evaluation would be able to assess the
generalizability of the findings of the CJR model by examining
variations of performance within the participating hospitals that
represent a wide range of hospital and market characteristics.
Therefore, we proposed that the CJR model would have 34 mandatory
participation MSAs (identified in Table 1) and 33 voluntary
participation MSAs (identified in Table 2) for performance years 3, 4,
and 5.
Specifically, we proposed that, unless an exclusion in Sec.
510.100(b) applies (that is, for certain hospitals that participate in
the BPCI initiative), participant hospitals in the proposed 34
mandatory participation MSAs that are not low-volume or rural (as
defined in Sec. 510.2 and discussed in the following paragraphs) would
continue to be required to participate in the CJR model. We also
proposed that hospitals in the proposed 33 voluntary participation MSAs
and hospitals that are low-volume or rural (as defined in Sec. 510.2
and discussed in the following paragraphs) would have a one-time
opportunity to notify CMS, in the form and manner specified by CMS, of
their election to continue their participation in the CJR model on a
voluntary basis (opt-in) for performance years 3, 4, and 5. We noted
that hospitals that choose to participate in the CJR model and make a
participation election that complies with proposed Sec. 510.115 would
be subject to all model requirements. Hospitals in the proposed 33
voluntary participation MSAs and low-volume and rural hospitals (as
defined in Sec. 510.2 and discussed in the following paragraphs) that
do not make a participation election would be withdrawn from the CJR
model as described later in this section of this final rule and interim
final rule with comment period.
We proposed to exclude and automatically withdraw low-volume
hospitals in the proposed 34 mandatory participation MSAs, as
identified by CMS (see Table 3), from participation in the CJR model
effective February 1, 2018. Since some low-volume hospitals may want to
continue their participation in the CJR model, we proposed to allow
low-volume hospitals to make a one-time, voluntary participation
election that complies with the proposed Sec. 510.115 in order for the
low-volume hospital to continue its participation in the CJR model. We
proposed to define a low-volume hospital in Sec. 510.2 as a hospital
identified by CMS as having fewer than 20 LEJR episodes in total across
the 3 historical years of data used to calculate the performance year 1
CJR episode target prices. Note that under this definition, all
hospitals listed in Table 3 would meet the definition of a low-volume
hospital, but this list would not be inclusive of all hospitals that
could be identified by CMS as a low-volume hospital. For example, a new
hospital (with a new CCN) that opens in a mandatory MSA during the
remaining years of the CJR model would not have
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any LEJR episodes during the historical years of data used to calculate
the performance year 1 CJR episode target prices. Under our proposal,
we intended that any hospital with a new CCN that came into existence
after the proposed voluntary participation election period would not be
required or eligible to join the CJR model. We noted that our proposed
policy for new hospitals would not be applicable in the case of a
reorganization event where the remaining entity is a hospital with a
CCN that was participating in the CJR model prior to the reorganization
event; consistent with our current policy, such hospital would continue
participation in the CJR model regardless of whether all predecessor
hospitals were participant hospitals prior to the reorganization event.
We also proposed to exclude and automatically withdraw rural
hospitals from participation in the CJR model effective February 1,
2018. Since some rural hospitals may want to continue their
participation in the CJR model, we proposed to allow rural hospitals to
make a one-time, voluntary participation election that complies with
the proposed Sec. 510.115 in order for the rural hospital to continue
its participation in the CJR model. Specifically, we proposed that
rural hospitals (as defined in Sec. 510.2) with a CCN primary address
in the 34 mandatory participation MSAs would have a one-time
opportunity to opt-in to continue participation in the CJR model during
the proposed voluntary participation election period. We proposed that
a hospital's change in rural status after the end of the voluntary
participation election period would not change the hospital's CJR model
participation requirements. Specifically, we proposed that hospitals in
the proposed 34 mandatory participation MSAs that are neither low-
volume or rural hospitals during the proposed voluntary participation
election period would be required to participate in the CJR model for
performance years 3, 4, and 5, and that these hospitals would continue
to be required to participate in the CJR model even if they
subsequently become a rural hospital. Similarly, we proposed that a
rural hospital that makes a voluntary participation election during the
one-time opportunity would be required to continue participating in the
CJR model if that hospital no longer meets the definition of rural
hospital in Sec. 510.2. We proposed this approach so that CMS could
identify the hospitals, by CCN, that would participate in the model for
the remainder of performance year 3 and performance years 4 and 5 at
the conclusion of the proposed voluntary participation election period
and so that there would be less confusion about which hospitals are CJR
model participants.
We also stated that we believe that our proposed approach to make
the CJR model primarily concentrated in the higher cost MSAs where the
opportunity for further efficiencies and care redesign may be more
likely and to allow voluntary participation in the lower cost MSAs and
for low-volume and rural hospitals allows the Innovation Center to
focus on areas where the opportunity for further efficiencies and care
redesign may be more likely, while still allowing hospitals in the
voluntary MSAs the opportunity to participate in the model. In
developing the proposed rule, we considered that hospitals in the CJR
model had been participating for over a year and a half as of the
timing of the proposed rule, and noted that we had begun to give
hospitals in the model initial financial and quality results from the
first performance year. In many cases, participant hospitals had made
investments in care redesign, and we wanted to recognize such
investments and commitments to improvement while reducing the overall
number of hospitals that are required to participate. We also
considered stakeholder feedback that suggested we make participation in
the CJR model voluntary, and the model size necessary to detect at
least a 3-percent reduction in LEJR episode spending. Taking these
considerations into account, we considered whether revising the model
to allow for voluntary participation in all, some, or none of the 67
selected MSAs would be feasible.
As discussed in section V. of this final rule and interim final
rule with comment period (see 82 FR 39327 through 39331 for proposed
rule impact estimates), the estimated impact of the changes to the CJR
model we are finalizing in this final rule and interim final rule with
comment period are estimated to reduce the overall estimated savings
for performance years 3, 4, and 5 by $106 million. An additional
estimated $2 million in reduced savings is estimated for the
performance year 2 reconciliation that will occur in March of 2018 and
will incorporate the extreme and uncontrollable circumstances policy we
are putting into place in with the interim final rule with comment in
this rule for a total reduction in the originally projected CJR model
savings of $108 million. If voluntary participation was allowed in all
of the 67 selected MSAs, the overall estimated model impact would no
longer show savings, and would likely result in additional costs to the
Medicare program. If participation was limited to the proposed 34
mandatory participation MSAs and voluntary participation was not
allowed in any MSA, the impact to the overall estimated model savings
over the last 3 years of the model (excluding the impact of the extreme
and uncontrollable circumstances policy in the interim final rule with
comment period portion of this rule) would be closer to a reduction of
$45 million than the reduction of $106 million estimate presented in
section V. of this final rule, because our modeling, which does not
include assumptions about behavioral changes that might lower fee-for-
service spending, estimates that 60 to 80 hospitals will choose
voluntary participation. Since we estimated that these potential
voluntary participants would be expected to earn only positive
reconciliation payments under the model, these positive reconciliation
payments would offset some of the savings garnered from mandatory
participants. However, as many current hospital participants in all of
the 67 MSAs are actively invested in the CJR model, we proposed to
allow voluntary participation in the 33 MSAs that were not selected for
mandatory participation and for low-volume and rural hospitals.
We sought comment on this proposal.
Comment: Several commenters disagreed with our proposal to make CJR
voluntary in certain MSAs. Commenters noted that in some cases, they
believe their hospitals have reduced spending and improved quality of
care as well as patient satisfaction as a result of mandated
participation in CJR. A commenter stated that due to mandated
participation in CJR, it is now more likely they will elect to
participate in other voluntary initiatives in the future. Other
commenters stated that the current model of mandatory participation in
all 67 MSAs allows for more generalizable evaluation results, and that
allowing for voluntary participation in half of the current MSAs will
negatively impact the evaluation. Some believe the proposal to offer
hospitals in approximately half of the geographic areas the option to
opt-in to the model on a voluntary basis will incentivize patient
selection (that is, select only healthier patients for LEJR procedures)
and limit CMS' ability to improve beneficiary health and the financial
viability of the Medicare program. Several commenters stated that the
proposal would stifle innovation, resulting in providers
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hesitating before engaging in further innovative payment efforts and
incentivizing only high-performing hospitals to continue participation
in the voluntary MSAs. A commenter wrote that they believe it is too
early to limit the scope of the CJR model and that doing so will halt
our ability to produce data on the impact of the model on quality and
cost.
Response: We thank commenters for their responses. We continue to
believe that by limiting the geographic areas in which CJR is mandatory
at this time, we are encouraging innovation by reducing burden on
providers to participate in models. We also believe that our proposal
will not incentivize patient selection, as we will continue to monitor
hospitals in CJR for changes in patient case-mix, and we are only
allowing for a one-time opt-in for eligible hospitals. Hospitals that
opt-in to the model, as discussed later in this section, will remain in
CJR for the remaining 3 performance years and will not have the
opportunity to later opt-out. In addition, all other current
requirements of participation, such as notifying beneficiaries about
the model, remain in place. We also note that we expect the CJR model
to produce savings for the Medicare program, as detailed in section V.
of this final rule, and to improve the quality of care provided to
beneficiaries undergoing LEJR procedures. Providers in voluntary MSAs
who have made investments and want to continue participating in CJR may
do so by opting into the model. We also reiterate that we are
considering options for a new bundled payment initiative, as discussed
previously in section II.A. of this final rule, which could provide
additional participation opportunities for providers currently in CJR,
including low volume and rural providers, as well as hospitals located
in voluntary MSAs, that choose not to opt-in to CJR. Finally, we
believe that we will still be able to evaluate the CJR model, given
these policy changes. After examining the remaining 34 mandatory MSAs,
we observed that there remains significant variation in the types of
markets and hospitals who will continue participation in the model
across a broad representation of geographic regions. This wide
variation in hospital and market characteristics will allow us to
evaluate variations in impact and assess the generalizability of the
findings of the CJR model. Additionally, the anticipated inclusion of
hospitals in the voluntary MSAs who opt-in has a high likelihood of
resulting in a robust data set for the evaluation of generalizability
of findings in mandatory areas that moved to voluntary participation.
Comment: Many commenters supported our proposal to make CJR
voluntary in 33 MSAs and voluntary for all rural and low volume
providers in CJR. However, several commenters requested we make CJR
voluntary in all 67 MSAs, effectively removing any mandatory
participation. Commenters opposed mandatory participation in payment
models due to providers' differing levels of experience with risk and
infrastructure capabilities and because some providers may not be well-
positioned to take on financial risk for a specific patient population.
Several commenters cited concerns with beneficiary access and the
quality of patient care under mandatory initiatives. A commenter stated
that mandatory models penalize providers that have not already
participated in other voluntary initiatives like BPCI. Other commenters
opposed mandatory models due to a belief that quality of care is more
likely to improve when health providers actively choose to participate
in payment models. Several commenters stated that under our proposal,
physicians and other teams of providers in voluntary MSAs could still
utilize the flexibility and resources under CJR to improve patient care
and would be incentivized to do so.
Other commenters requested that CMS make the model voluntary in all
MSAs across the country, not just those 67 currently participating in
CJR, in order to increase participation opportunities in Advanced APMs
and to treat hospitals in all 67 current CJR MSAs fairly by not
mandating participation in some areas and not others. Several
commenters noted support for our proposal to make CJR voluntary in
certain areas, but requested that CMS clarify that our priorities still
include delivery system reform given that our proposal would limit the
reach of an existing model.
Response: We thank those commenters that supported the proposal. We
note that although we are reducing the number of MSAs where
participation in the CJR model is mandatory, we continue to believe
that the CJR model offers opportunities for providers to improve the
quality of care while reducing spending. We expect many providers in
the voluntary MSAs to elect to continue participation in the CJR model,
and look forward to continuing to work with all CJR participant
hospitals to improve quality of care under the model. Delivery system
reform and movement toward value-based payment remain CMS priorities;
we believe offering more opportunities for providers to engage in such
activities on a voluntary basis will allow us to continue to pursue our
goals.
We continue to believe that offering voluntary participation in 33
MSAs while maintaining mandatory participation in the remaining 34 MSAs
is the correct path forward at this time. As discussed previously, we
will continue to require hospitals in the 34 highest-cost MSAs to
participate in CJR because we believe that those geographic areas have
significant opportunity for reducing episode spending while improving
quality of care under the model. Similarly, we believe that at this
point in the CJR model (the end of the second performance year), it is
most prudent for us to continue the model in the geographic areas where
providers have already implemented infrastructure changes as well as
received initial financial and quality results for the first
performance year. In addition, as discussed previously, participation
will remain mandatory in the 34 higher-cost MSAs where we believe there
exists significant opportunity to reduce episode spending. In lieu of
increasing the number of MSAs participating in CJR at this time, we are
focusing our efforts on development of other new models that will
further address our goals of improving quality of care and reducing
spending.
Comment: Several commenters supported our proposal to make
participation in CJR voluntary in some of the current MSAs but objected
to our use of the high-cost criterion to determine which MSAs should
remain mandatory. These commenters requested that we randomly select
which MSAs would remain mandatory or include a mixture of high- and
low-cost MSAs in the remaining mandatory areas.
Response: We thank the commenters for their suggestions but
continue to believe that choosing the higher-cost MSAs for mandatory
participation is appropriate, especially given the transition to fully
regional pricing in performance years 4 and 5 of the CJR model. The
higher-cost MSAs may offer more opportunity for hospitals in CJR to
reduce episode spending and improve quality, especially as target
prices move to fully regional prices in year 4 of the model.
Comment: A number of commenters supported our proposal to allow low
volume hospitals in all 67 MSAs to participate in the model on a
voluntary basis, but requested that we revise the low volume threshold
to offer voluntary participation to a larger number of
[[Page 57076]]
hospitals. Commenters specifically requested we revise the threshold to
100 episodes across the 3-year historical baseline (episodes that began
in 2012-2014), noting their belief that hospitals with fewer episodes
have experienced more pricing volatility and have a more difficult time
managing care redesign and episode spending under bundled payment
models.
Response: We proposed to define low volume hospitals as those
hospitals with fewer than 20 episodes in the 3-year historical baseline
period (episodes in 2012 through 2014) used to create PY1 episode
target prices. We note that this definition is consistent with our
treatment of low volume hospitals currently participating in CJR; since
the model's inception, under Sec. 510.300(b)(3), such hospitals
receive a 100 percent regional target price in all years of the model.
This threshold represents approximately the 10th percentile of episode
volume across hospitals, which we believed was a reasonable threshold.
In addition, such hospitals are defined as low volume for purposes of
the CJR model based only on their historical LEJR episode volume among
Medicare FFS beneficiaries; while these hospitals may furnish few LEJR
procedures to Medicare FFS beneficiaries, they are not necessarily
rural or low volume in terms of bed count or the volume of other
services provided. In response to commenters' suggestion to revise the
threshold, we reexamined our data on episode volume across the
historical baseline, as well as the initial performance year 1
reconciliation results.
We are finalizing our proposal to define low volume hospitals as
those with fewer than 20 episodes in the historical baseline period for
the following reasons. First, we note that a number of low volume
hospitals earned initial reconciliation payments for performance year
1, indicating that having a low volume of episodes among Medicare FFS
beneficiaries does not preclude a hospital from achieving care redesign
and financial success under the model. Second, we are attempting to
balance competing considerations, including not wanting to overburden
smaller providers, while still learning how these types of providers
perform in an episode model like CJR. We will continue to operate CJR
as a mandatory model in 34 MSAs so that we may better understand how
providers who typically do not participate in voluntary models respond
to an episode payment structure. In addition, small hospitals are
currently underrepresented in voluntary Innovation Center models. Thus,
we are particularly interested in learning about their experiences as
participants so that, when we examine whether the statutory
requirements for expansion are met for CJR, we can consider these
experiences rather than assuming that the experience of larger
hospitals can be simply applied to them. We believe that the current
manner of defining low volume hospitals as those having fewer than 20
episodes strikes an appropriate balance between wanting to understand
the experience of hospitals with different care patterns and
populations while limiting unnecessary burden.
Comment: Commenters supported our proposal to make participation
voluntary for rural hospitals in all 67 CJR MSAs. Commenters noted that
our proposal to allow for voluntary participation in CJR for all rural
hospitals recognizes the unique challenges that rural hospitals face,
including more limited access to infrastructure.
Response: We thank the commenters for their support. We agree that
rural hospitals face unique challenges related to caring for their
patient populations and are finalizing our policy to allow rural
hospitals in all 67 CJR MSAs to opt-in to continue participation in the
model.
Comment: Several commenters requested that CMS clarify how the CJR
regional target prices will change if the proposal is finalized.
Response: We are clarifying that regional targets will not change
because they incorporate all lower-extremity joint replacement episodes
in a U.S. Census Division, regardless of MSA and CJR participation.
Comment: A commenter requested clarification on the proposed CJR
participation requirements for hospitals currently participating in
BPCI for LEJR episodes. The commenter noted that under our proposed
policy, it was unclear whether a hospital participating in BPCI for
LEJR episodes would enter CJR upon terminating participation on BPCI,
or when the current BPCI initiative ends in September 2018. The
commenter believes that requiring hospitals to enter CJR starting in
the fourth performance year could expose them to undue financial risk,
given that CJR will transition to fully regional pricing for
performance years 4 and 5 of the model.
Response: We note that we did not propose any changes to the CJR
participation requirements with relation to BPCI precedence. Hospitals
that are participating in the BPCI initiative for LEJR episodes are not
required to participate in CJR. We did not propose a special election
period for BPCI hospitals that terminate from BPCI (or stop
participating in LEJR episodes under that initiative). In other words,
a hospital that terminates from BPCI after January 1, 2018 and that is
located in a voluntary area or that qualified as a rural or low volume
provider under the CJR definitions as of January 31, 2018 would not be
required or able to participate in CJR. When BPCI concludes its final
performance period, we will not offer a special election period. At
that time, hospitals in mandatory CJR MSAs who do not qualify as rural
or low volume under the CJR definitions must participate in CJR, as
specified in Sec. 510.100(b). Our expectation is that hospitals that
have been participating in BPCI will have a smooth transition into CJR
based on their experience in managing episodes under the BPCI model.
Hospitals not in mandatory areas or hospitals that have rural or low
volume status under the CJR definitions interested in participating in
voluntary bundled payment models would have other opportunities to
apply to do so, as discussed in section II.A. of this final rule and
interim final rule with comment period.
Table 1--CJR Mandatory Participation MSAs
------------------------------------------------------------------------
Wage-adjusted
MSA MSA name episode payments
(in $)
------------------------------------------------------------------------
10420.................... Akron, OH................. $28,081
11700.................... Asheville, NC............. 27,617
12420.................... Austin-Round Rock, TX..... 28,960
13140.................... Beaumont-Port Arthur, TX.. 32,544
17140.................... Cincinnati, OH-KY-IN...... 28,074
18580.................... Corpus Christi, TX........ 30,700
[[Page 57077]]
20020.................... Dothan, AL................ 30,710
22500.................... Florence, SC.............. 27,901
23540.................... Gainesville, FL........... 29,370
24780.................... Greenville, NC............ 27,446
25420.................... Harrisburg-Carlisle, PA... 28,360
26300.................... Hot Springs, AR........... 29,621
28660.................... Killeen-Temple, TX........ 27,355
31080.................... Los Angeles-Long Beach- 28,219
Anaheim, CA.
31180.................... Lubbock, TX............... 29,524
32820.................... Memphis, TN-MS-AR......... 28,916
33100.................... Miami-Fort Lauderdale-West 33,072
Palm Beach, FL.
33740.................... Monroe, LA................ 30,431
33860.................... Montgomery, AL............ 30,817
35300.................... New Haven-Milford, CT..... 27,529
35380.................... New Orleans-Metairie, LA.. 29,562
35620.................... New York-Newark-Jersey 31,076
City, NY-NJ-PA.
36420.................... Oklahoma City, OK......... 27,267
36740.................... Orlando-Kissimmee-Sanford, 29,259
FL.
37860.................... Pensacola-Ferry Pass- 29,485
Brent, FL.
38300.................... Pittsburgh, PA............ 30,886
38940.................... Port St. Lucie, FL........ 30,423
39340.................... Provo-Orem, UT............ 28,852
39740.................... Reading, PA............... 28,679
42680.................... Sebastian-Vero Beach, FL.. 28,015
45300.................... Tampa-St. Petersburg- 32,424
Clearwater, FL.
45780.................... Toledo, OH................ 28,658
46220.................... Tuscaloosa, AL............ 31,789
46340.................... Tyler, TX................. 30,955
------------------------------------------------------------------------
Table 2--CJR Voluntary Participation MSAs
------------------------------------------------------------------------
Wage-adjusted
MSA MSA name episode payments
(in $)
------------------------------------------------------------------------
10740.................... Albuquerque, NM........... $25,892
12020.................... Athens-Clarke County, GA.. 25,394
13900.................... Bismarck, ND.............. 22,479
14500.................... Boulder, CO............... 24,115
15380.................... Buffalo-Cheektowaga- 26,037
Niagara Falls, NY.
16020.................... Cape Girardeau, MO-IL..... 24,564
16180.................... Carson City, NV........... 26,128
16740.................... Charlotte-Concord- 26,736
Gastonia, NC-SC.
17860.................... Columbia, MO.............. 25,558
19500.................... Decatur, IL............... 24,846
19740.................... Denver-Aurora-Lakewood, CO 26,119
20500.................... Durham-Chapel Hill, NC.... 25,151
22420.................... Flint, MI................. 24,807
23580.................... Gainesville, GA........... 23,009
26900.................... Indianapolis-Carmel- 25,841
Anderson, IN.
28140.................... Kansas City, MO-KS........ 27,261
30700.................... Lincoln, NE............... 27,173
31540.................... Madison, WI............... 24,442
33340.................... Milwaukee-Waukesha-West 25,698
Allis, WI.
33700.................... Modesto, CA............... 24,819
34940.................... Naples-Immokalee-Marco 27,120
Island, FL.
34980.................... Nashville-Davidson-- 26,880
Murfreesboro--Franklin,
TN.
35980.................... Norwich-New London, CT.... 25,780
36260.................... Ogden-Clearfield, UT...... 25,472
38900.................... Portland-Vancouver- 22,604
Hillsboro, OR-WA.
40980.................... Saginaw, MI............... 25,488
41180.................... St. Louis, MO-IL.......... 26,425
41860.................... San Francisco-Oakland- 23,716
Hayward, CA.
42660.................... Seattle-Tacoma-Bellevue, 23,669
WA.
43780.................... South Bend-Mishawaka, IN- 23,143
MI.
44420.................... Staunton-Waynesboro, VA... 25,539
45820.................... Topeka, KS................ 24,273
48620.................... Wichita, KS............... 25,945
------------------------------------------------------------------------
[[Page 57078]]
Table 3--Low-Volume Hospitals Located in the Mandatory MSAs Eligible To
Opt-In During Voluntary Election Period
------------------------------------------------------------------------
CCN Hospital name MSA MSA title
------------------------------------------------------------------------
010034.............. Community 33860 Montgomery, AL.
Hospital, Inc.
010062.............. Wiregrass 20020 Dothan, AL.
Medical Center.
010095.............. Hale County 46220 Tuscaloosa, AL.
Hospital.
010097.............. Elmore Community 33860 Montgomery, AL.
Hospital.
010108.............. Prattville 33860 Montgomery, AL.
Baptist
Hospital.
010109.............. Pickens County 46220 Tuscaloosa, AL.
Medical Center.
010149.............. Baptist Medical 33860 Montgomery, AL.
Center East.
040132.............. Leo N. Levi 26300 Hot Springs, AR.
National
Arthritis
Hospital.
050040.............. LAC-Olive View- 31080 Los Angeles-Long
UCLA Medical Beach-Anaheim,
Center. CA.
050091.............. Community 31080 Los Angeles-Long
Hospital of Beach-Anaheim,
Huntington Park. CA.
050137.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital- CA.
Panorama City.
050138.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital-Los CA.
Angeles.
050139.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital-Downey. CA.
050158.............. Encino Hospital 31080 Los Angeles-Long
Medical Center. Beach-Anaheim,
CA.
050205.............. Glendora 31080 Los Angeles-Long
Community Beach-Anaheim,
Hospital. CA.
050373.............. LAC + USC 31080 Los Angeles-Long
Medical Center. Beach-Anaheim,
CA.
050378.............. Pacifica 31080 Los Angeles-Long
Hospital of the Beach-Anaheim,
Valley. CA.
050411.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital-South CA.
Bay.
050468.............. Memorial 31080 Los Angeles-Long
Hospital of Beach-Anaheim,
Gardena. CA.
050543.............. College Hospital 31080 Los Angeles-Long
Costa Mesa. Beach-Anaheim,
CA.
050548.............. Fairview 31080 Los Angeles-Long
Developmental Beach-Anaheim,
Center. CA.
050552.............. Motion Picture & 31080 Los Angeles-Long
Television Beach-Anaheim,
Hospital. CA.
050561.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital-West CA.
Los Angeles.
050609.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital-Orange CA.
County-Anaheim.
050641.............. East Los Angeles 31080 Los Angeles-Long
Doctors Beach-Anaheim,
Hospital. CA.
050677.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital- CA.
Woodland Hills.
050723.............. Kaiser 31080 Los Angeles-Long
Foundation Beach-Anaheim,
Hospital- CA.
Baldwin Park.
050738.............. Greater El Monte 31080 Los Angeles-Long
Community Beach-Anaheim,
Hospital. CA.
050744.............. Anaheim Global 31080 Los Angeles-Long
Medical Center. Beach-Anaheim,
CA.
050747.............. South Coast 31080 Los Angeles-Long
Global Medical Beach-Anaheim,
Center. CA.
050751.............. Miracle Mile 31080 Los Angeles-Long
Medical Center. Beach-Anaheim,
CA.
050771.............. Coast Plaza 31080 Los Angeles-Long
Hospital. Beach-Anaheim,
CA.
050776.............. College Medical 31080 Los Angeles-Long
Center. Beach-Anaheim,
CA.
050779.............. Martin Luther 31080 Los Angeles-Long
King Jr. Beach-Anaheim,
Community CA.
Hospital.
050780.............. Foothill Medical 31080 Los Angeles-Long
Center. Beach-Anaheim,
CA.
050782.............. Casa Colina 31080 Los Angeles-Long
Hospital. Beach-Anaheim,
CA.
070038.............. Connecticut 35300 New Haven-
Hospice Inc. Milford, CT.
070039.............. Masonic Home and 35300 New Haven-
Hospital. Milford, CT.
100048.............. Jay Hospital.... 37860 Pensacola-Ferry
Pass-Brent, FL.
100130.............. Lakeside Medical 33100 Miami-Fort
Center. Lauderdale-West
Palm Beach, FL.
100240.............. Anne Bates Leach 33100 Miami-Fort
Eye Hospital. Lauderdale-West
Palm Beach, FL.
100277.............. Douglas Gardens 33100 Miami-Fort
Hospital. Lauderdale-West
Palm Beach, FL.
100320.............. Poinciana 36740 Orlando-
Medical Center. Kissimmee-
Sanford, FL.
100326.............. Promise Hospital 33100 Miami-Fort
of Miami. Lauderdale-West
Palm Beach, FL.
190005.............. University 35380 New Orleans-
Medical Center Metairie, LA.
New Orleans.
190011.............. University 33740 Monroe, LA.
Health Conway.
190079.............. St. Charles 35380 New Orleans-
Parish Hospital. Metairie, LA.
190245.............. Monroe Surgical 33740 Monroe, LA.
Hospital.
190300.............. St. Charles 35380 New Orleans-
Surgical Metairie, LA.
Hospital LLC.
190302.............. Omega Hospital 35380 New Orleans-
LLC. Metairie, LA.
190308.............. St. Bernard 35380 New Orleans-
Parish Hospital. Metairie, LA.
190313.............. New Orleans East 35380 New Orleans-
Hospital. Metairie, LA.
250012.............. Alliance 32820 Memphis, TN-MS-
Healthcare AR.
System.
250126.............. North Oak 32820 Memphis, TN-MS-
Regional AR.
Medical Center.
250167.............. Methodist Olive 32820 Memphis, TN-MS-
Branch Hospital. AR.
310058.............. Bergen Regional 35620 New York-Newark-
Medical Center. Jersey City, NY-
NJ-PA.
330080.............. Lincoln Medical 35620 New York-Newark-
& Mental Health Jersey City, NY-
Center. NJ-PA.
330086.............. Montefiore Mount 35620 New York-Newark-
Vernon Hospital. Jersey City, NY-
NJ-PA.
330100.............. New York Eye and 35620 New York-Newark-
Ear Infirmary. Jersey City, NY-
NJ-PA.
330199.............. Metropolitan 35620 New York-Newark-
Hospital Center. Jersey City, NY-
NJ-PA.
330231.............. Queens Hospital 35620 New York-Newark-
Center. Jersey City, NY-
NJ-PA.
330233.............. Brookdale 35620 New York-Newark-
Hospital Jersey City, NY-
Medical Center. NJ-PA.
330240.............. Harlem Hospital 35620 New York-Newark-
Center. Jersey City, NY-
NJ-PA.
330385.............. North Central 35620 New York-Newark-
Bronx Hospital. Jersey City, NY-
NJ-PA.
330396.............. Woodhull Medical 35620 New York-Newark-
and Mental Jersey City, NY-
Health Center. NJ-PA.
330397.............. Interfaith 35620 New York-Newark-
Medical Center. Jersey City, NY-
NJ-PA.
330399.............. St. Barnabas 35620 New York-Newark-
Hospital. Jersey City, NY-
NJ-PA.
330405.............. Helen Hayes 35620 New York-Newark-
Hospital. Jersey City, NY-
NJ-PA.
360241.............. Edwin Shaw Rehab 10420 Akron, OH.
Institute.
370011.............. Mercy Hospital 36420 Oklahoma City,
El Reno Inc. OK
370158.............. Purcell 36420 Oklahoma City,
Municipal OK.
Hospital.
[[Page 57079]]
370199.............. Lakeside Women's 36420 Oklahoma City,
Hospital A OK.
Member of
INTEGRIS Health.
370206.............. Oklahoma Spine 36420 Oklahoma City,
Hospital. OK.
370215.............. Oklahoma Heart 36420 Oklahoma City,
Hospital. OK.
370234.............. Oklahoma Heart 36420 Oklahoma City,
Hospital South. OK.
390184.............. Highlands 38300 Pittsburgh, PA.
Hospital.
390217.............. Excela Health 38300 Pittsburgh, PA.
Frick Hospital.
420057.............. McLeod Medical 22500 Florence, SC.
Center-
Darlington.
420066.............. Lake City 22500 Florence, SC.
Community
Hospital.
440131.............. Baptist Memorial 32820 Memphis, TN-MS-
Hospital Tipton. AR.
450143.............. Seton Smithville 12420 Austin-Round
Regional Rock, TX.
Hospital.
450605.............. Care Regional 18580 Corpus Christi,
Medical Center. TX.
450690.............. University of 46340 Tyler, TX.
Texas Health
Science Center
at Tyler.
450865.............. Seton Southwest 12420 Austin-Round
Hospital. Rock, TX.
460043.............. Orem Community 39340 Provo-Orem, UT.
Hospital.
670087.............. Baylor Scott & 12420 Austin-Round
White Emergency Rock, TX.
Medical Center-
Cedar Park.
------------------------------------------------------------------------
As stated previously in this section, we proposed a one-time
participation election period for all hospitals with a CCN primary
address located in the voluntary participation MSAs listed in Table 2,
low-volume hospitals specified in Table 3, and rural hospitals. Based
on the anticipated timing for when this final rule implementing this
proposal would be published, we proposed that the voluntary
participation election period would begin January 1, 2018, and would
end January 31, 2018. We noted that we must receive the participation
election letter no later than January 31, 2018. We proposed that the
hospital's participation election letter would serve as the model
participant agreement. Voluntary participation would begin February 1,
2018, and continue through the end of the CJR model, unless sooner
terminated. Thus, participant hospitals located in the voluntary
participation MSAs listed in Table 2, the low-volume hospitals
specified in Table 3, and the rural hospitals that elect voluntary
participation would continue in the CJR model without any disruption to
episodes attributed to performance year 3, which begins January 1,
2018. Participant hospitals located in the voluntary participation MSAs
listed in Table 2, the low-volume hospitals specified in Table 3, and
the rural hospitals that do not elect voluntary participation would be
withdrawn from the model effective February 1, 2018, and all of their
performance year 3 episodes up to and including that date would be
canceled, so that these hospitals would not be subject to a
reconciliation payment or repayment amount for performance year 3. We
proposed to implement our proposed opt-in approach in this manner as a
way to balance several goals, including establishing a uniform time
period for hospitals to make a voluntary participation election,
avoiding disruption of episodes for hospitals that elect to continue
their participation in the CJR model, and preventing confusion about
whether a hospital is participating in performance year 3 of the model.
Specifically, we considered whether adopting a voluntary election
period that ended prior to the start of performance year 3 would be
less confusing and less administratively burdensome in terms of whether
a hospital is participating in performance year 3. To implement this
approach, the voluntary participation election period would have to
close by December 31, 2017, such that each hospital would have made its
determination regarding participation in performance year 3 before the
start of performance year 3 (note that episodes attributed to
performance year 3 would still be canceled under this alternative
approach for eligible hospitals that do not make a participation
election). We noted that because the voluntary election period under
this approach would conclude in advance of the relevant CJR model
performance year, this approach could simplify our administration of
performance year 3 by establishing in advance of performance year 3
whether a hospital would be a participant hospital for the totality of
performance year 3. However, given the timing of the proposed
rulemaking, we were not confident that hospitals would have sufficient
time to make a voluntary participation election by December 31, 2017.
Thus, we proposed that the voluntary participation election period
would occur during the first month of performance year 3 (that is,
throughout January 2018) and would apply prospectively beginning on
February 1, 2018. We believed this approach would best ensure adequate
time for hospitals to make a participation election while minimizing
the time period during which participation in performance year 3
remains mandatory for all eligible hospitals in the 67 selected MSAs.
We noted that based on timing considerations, including potential
changes to the anticipated date of publication of the final rule and
interim final rule with comment period, we may modify the dates of the
voluntary participation election period and make conforming changes to
the dates for voluntary participation in performance year 3. We sought
comment on the proposed voluntary participation election period,
including whether we should instead require the participation election
to be made by December 31, 2017 (that is, prior to the start of
performance year 3) or if a different or later voluntary election
period may be preferable.
Comment: Some commenters requested that we establish multiple opt-
in periods. Several commenters requested an additional opt-in period
after we announce new voluntary bundled payment initiatives, while
others requested an annual opt-in process. Commenters also noted that
they believe hospitals in the voluntary MSAs, as well as low volume and
rural hospitals, do not have enough information to make an informed
decision about participation in CJR at this time due to the following
reasons: (1) We have not yet released details of the next voluntary
bundled payment initiative; (2) January 1 through 31, 2018 is too soon
for hospitals to make an educated decision; (3) it is unclear what, if
any, revisions will be made to the CJR
[[Page 57080]]
pricing methodology if we finalize the proposed OPPS policy to remove
total knee arthroplasty (TKA) from the inpatient-only (IPO) list; and
(4) commenters believe that offering multiple opt-in periods will
result in a great number of hospitals electing to remain in CJR.
Response: We appreciate commenters' concern that it may be more
difficult for hospitals to make a participation decision during January
2018 given the uncertain factors that commenters provided. We
understand that hospitals facing uncertainty for these reasons or
others may choose not to opt-in based on that uncertainty. However, we
believe that offering an opt-in period in January of 2018 is a
reasonable timeframe, given the following reasons. First, hospitals
opting-in to the model will have already been participants in CJR for
nearly 2 years at that time. Participant hospitals have been receiving
episode data and have received initial reconciliation results, and in
many cases an initial reconciliation payment, for the first performance
year of CJR. Second, as discussed in section II.I. of this final rule
and interim final rule with comment period, we plan to address
commenters' concerns about the potential impact of the removal of TKA
from the IPO list in future rulemaking, as appropriate. Finally, we
believe that a one-time opt-in process minimizes potential patient
selection and gaming issues, as an annual opt-in process may result in
hospitals only opting-in to the model if they are earning
reconciliation payments. We also believe that a one-time opt-in process
reduces confusion for hospitals regarding participation in the CJR
model. We will publish a list on the CMS Web site of all hospitals
participating in the CJR model for performance years 3 through 5 as of
February 1, 2018. Therefore, we are finalizing our proposal to offer a
one-time opt-in period for all participant hospitals in the 33
voluntary MSAs and rural and low volume hospitals in all 67 MSAs. In
conjunction with the publication of this final rule and interim final
rule with comment period, we will post on our Web site the list of
rural hospitals we have identified as rural that will be automatically
excluded from the CJR model if they do not submit an opt-in election as
specified in this final rule and interim final rule with comment
period. CJR hospitals not shown on this list who believe they should be
considered rural should contact the CJR model at CJR@cms.hhs.gov.
Comment: A commenter was concerned about how the opt-in process
would affect hospitals that have submitted a rural reclassification
request prior to January 31, 2018 that has not yet been approved by
CMS. The commenter requested that CMS notify all current CJR hospitals
about the opt-in process, use the date the reclassification request was
submitted to CMS to determine whether a hospital is rural, and offer a
30-day appeals process for hospitals with pending rural
reclassification requests.
Response: We appreciate the commenter's recognition of the
operational challenges involved in identifying which hospitals are
rural hospitals for purposes of the model. For this reason, we proposed
that we would consider a hospital's rural status as of January 31, 2018
for purposes of determining which hospitals are required to participate
in CJR or are eligible for voluntary participation. We proposed, and
are now notifying all CJR hospitals (and the public in general) about,
the opt-in process. We also have included information about the
proposed process, which we are now finalizing, in communications with
current CJR participant hospitals. We do not believe it is appropriate,
or in the best interest of rural hospitals, to offer an appeals process
or additional opt-in periods for hospitals that reclassify to rural
status, for the following reasons. First, we seek to minimize confusion
as to which hospitals are in CJR and to avoid creating further
incentives for hospitals to reclassify for reasons solely related to
the CJR model. Second, any participant hospitals that are not
reclassified as rural as of January 31, 2018 will have been
participating in the CJR model since April 1, 2016 without rural
status. Finally, participant hospitals have already had an incentive
under the model to reclassify to rural, given that the CJR model has
offered more limited financial risk for rural hospitals through lower
stop-loss limits since downside risk began in year 2. We note that any
participant hospital that reclassifies to rural after the opt-in period
would have lower stop-loss limits for the remainder of the model. Thus,
to more effectively operate the model, and to make it clear which
hospitals will remain in CJR for performance years 3 through 5, we are
finalizing our proposal to define rural hospitals for purposes of the
model as those hospitals that have rural status as of the final day of
the voluntary participation election period (January 31, 2018).
To specify their participation election, we proposed that hospitals
would submit a written participation election letter to CMS in a form
and manner specified by CMS. We noted that we intend to provide
templates that can easily be completed and submitted in order to limit
the burden on hospitals seeking to opt-in. If a hospital with a CCN
primary address located in the voluntary participation MSAs or a low-
volume or rural hospital in the mandatory participation MSAs does not
submit a written participation election letter by January 31, 2018, the
hospital's participation in performance year 3 would end, all of its
performance year 3 episodes would be canceled, and it would not be
included in the CJR model for performance years 4 and 5.
We proposed a number of requirements for the participation election
letter and that the hospital's participation election letter would
serve as the model participant agreement. First, we proposed that the
participation election letter must include all of the following:
Hospital Name.
Hospital Address.
Hospital CCN.
Hospital contact name, telephone number, and email
address.
If selecting the Advanced APM track, attestation of CEHRT
use as defined in Sec. 414.1305.
Second, we proposed that the participation election letter must
include a certification in a form and manner specific by CMS that--
The hospital will comply with all requirements of the CJR
model (that is, 42 CFR part 510) and all other laws and regulations
that are applicable to its participation in the CJR model; and
Any data or information submitted to CMS will be accurate,
complete and truthful, including, but not limited to, the participation
election letter and any quality data or other information that CMS uses
in reconciliation processes or payment calculations or both.
We solicited feedback on this proposed certification requirement,
including whether the certification should include different or
additional attestations.
Finally, we proposed that the participation election letter be
signed by the hospital administrator, chief financial officer (CFO) or
chief executive officer (CEO).
We proposed that, if the hospital's participation election letter
meets these criteria, we would accept the hospital's participation
election. Once a participation election for the CJR model is made and
is effective, the participant hospital would be required to participate
in all activities related to the CJR model for the remainder of the CJR
model unless the hospital's participation is terminated sooner.
[[Page 57081]]
Comment: Several commenters requested that we make the opt-in
template available as soon as possible, and that the template be clear
and concise, minimizing the administrative burden on hospitals and
limiting confusion.
Response: We are finalizing the proposed elements of the
participation election letter with one modification. We will not
require hospitals to attest to CEHRT use in the opt-in template, as we
currently request that information from hospitals on an annual basis,
along with their clinician financial arrangements list, when they elect
a track in CJR for purposes of Advanced APM status consistent with
Sec. 510.120. In order to minimize burden and limit confusion for
hospitals as to whether attesting to CEHRT use in the opt-in template
would supersede other information provided to use regarding CEHRT use,
we are removing that item from the opt-in template. We note that the
opt-in template for hospitals eligible for voluntary participation in
CJR has been posted on the CMS public Web site at https://innovation.cms.gov/initiatives/cjr in conjunction with this final rule
and interim final rule with comment period.
We noted that episodes end 90 days after discharge for the CJR
model and episodes that do not start and end in the same calendar year
will be attributed to the following performance year. For example,
episodes that start in October 2017 and do not end on or before
December 31, 2017 are attributed to performance year 3. Our methodology
for attributing these episodes to the subsequent performance year would
be problematic in cases where a hospital with a CCN primary address
located in a voluntary participation MSA or a rural hospital or a low-
volume hospital, as specified by CMS, has not elected to voluntarily
continue participating in the model. Therefore, for a hospital with a
CCN primary address located in a voluntary participation MSA, or a
rural hospital or a low-volume hospital, as specified by CMS, that does
not elect voluntary participation during the one-time voluntary
participation election period, we proposed that all episodes attributed
to performance year 3 for that hospital would be canceled and would not
be included in payment reconciliation. Such hospitals would have their
participation in the CJR model withdrawn effective February 1, 2018. We
noted that this proposal is consistent with our policy for treatment of
episodes that have not ended by or on the last day of performance year
5 and cannot be included in performance year 5 reconciliation due to
the end of the model (see Table 8 of the CJR model final rule (80 FR
73326)).
We stated that we believe our proposed opt-in approach to allow for
voluntary participation in the CJR model by certain hospitals would be
less burdensome on such hospitals than a potential alternative approach
of requiring hospitals to opt-out of the model. In developing the
proposal to allow eligible hospitals located in the proposed 33
voluntary participation MSAs and low-volume and rural hospitals located
in the 34 mandatory participation MSAs to elect voluntary
participation, we considered whether to propose that hospitals would
have to make an affirmative voluntary participation election (that is,
an opt-in approach) or to propose that these hospitals would continue
to be required to participate in the CJR model unless written
notification was given to CMS to withdraw the hospital from the CJR
model (that is, an opt-out approach). We stated that we believe an opt-
in approach would be less burdensome on hospitals, because it would not
require participation in the CJR model for hospitals located in the
proposed 33 voluntary participation MSAs and for low-volume and rural
hospitals located in the 34 mandatory participation MSAs unless the
hospital affirmatively chose it. Further, we stated that we believe
requiring an affirmative opt-in election would result in less ambiguity
about a hospital's participation intentions as compared to an opt-out
approach. Specifically, with an opt-in approach, a hospital's
participation election would document each hospital's choice, whereas
under an opt-out approach there could be instances where hospitals fail
to timely notify CMS of their desire to withdraw from participation and
are thus included in the model and subject to potential repayment
amounts. For these reasons, we proposed an opt-in approach. We sought
comment on this proposal and the alternative considered.
Comment: A commenter requested that CMS clarify whether hospitals
are allowed to terminate participation in CJR. The commenter noted that
although our proposal for the opt-in process is clear, the language in
the proposed rule does not clearly state whether a hospital could opt-
in to CJR and later opt-out of the model after January 2018. Another
commenter requested clarification as to whether a hospital that opts-in
to CJR may later withdraw from the model through participation in a new
voluntary bundled payment initiative.
Response: Under our proposed policy, all hospitals that opt-in to
the model as of January 31, 2018 would be required to participate
through the end of performance year 5 (episodes that end by December
31, 2020), unless such participation were terminated in accordance with
Sec. 510.410 or Sec. 510.900, regardless of the hospital's
participation in a new voluntary bundled payment initiative.
A summary of the finalized changes to the CJR model participation
requirements is shown in Table 4.
Summary of Final Decisions: We are finalizing our proposals to
reduce the number of MSAs where all IPPS hospitals are required to
participate in CJR from 67 to 34, and to allow for voluntary
participation for all IPPS participant hospitals in the remaining 33
MSAs. We are also finalizing our proposal that rural hospitals (as
defined at Sec. 510.2 as of January 31, 2018) and low volume
hospitals, defined as hospitals with fewer than 20 episodes in the
historical baseline period used to create the PY1 target prices, in the
34 mandatory participation MSAs are not required to participate in the
model but may opt-in to the model. We are finalizing our proposal to
offer a single opt-in period from January 1, 2018 through January 31,
2018. Table 4 provides a summary of our final participation
requirements.
These policies are codified at Sec. Sec. 510.2, 510.105, and
510.115.
Table 4--Participation Requirements for Hospitals in the CJR Model
--------------------------------------------------------------------------------------------------------------------------------------------------------
Required to participate as of Participation Election
February 1, 2018 May elect voluntary participation election period effective date
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mandatory Participation MSAs
--------------------------------------------------------------------------------------------------------------------------------------------------------
All IPPS participant hospitals, except Yes................................ No................................ n/a n/a
rural and low-volume *.
Rural hospitals *........................ No................................. Yes............................... 1/1/2018-1/31/2018 2/1/2018
[[Page 57082]]
Low-volume hospitals (see Table 3)....... No................................. Yes............................... 1/1/2018-1/31/2018 2/1/2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Voluntary Participation MSAs
--------------------------------------------------------------------------------------------------------------------------------------------------------
All IPPS participant hospitals........... No................................. Yes............................... 1/1/2018-1/31/2018 2/1/2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Note: Participation requirements are based on the CCN status of the hospital as of January 31, 2018. A change in rural status after the voluntary
election period does not affect the participation requirements.
2. Proposed Codification of CJR Model-Related Evaluation Participation
Requirements
We note that for the CJR model evaluation, the data collection
methods and key evaluation research questions under the proposed
reformulated approach (that is, the proposal for voluntary opt-in
elections discussed in section III.B.1. of the proposed rule (82 FR
39313)) would remain similar to the approach presented in the CJR model
final rule. The evaluation methodology for the CJR model would be
consistent with the standard Innovation Center approaches we have taken
in other voluntary models such as the Pioneer Accountable Care
Organization (ACO) Model. Cooperation and participation in model-
related activities by all hospitals that participate in the CJR model
would continue to be extremely important to the evaluation. Therefore,
with respect to model-related evaluation activities, we proposed to add
provisions in Sec. 510.410(b)(1)(i)(G) to specify that CMS may take
remedial action if a participant hospital, or one of its collaborators,
collaboration agents, or downstream collaboration agents fails to
participate in model-related evaluation activities conducted by CMS
and/or its contractors for any performance year in which the hospital
participates. We noted that we believe the addition of this provision
would make participation and collaboration requirements for the CJR
model evaluation clear to all participant hospitals and in particular
to hospitals that are eligible to elect voluntary participation. We
sought comment on our proposed regulatory change.
Comment: A commenter requested clarification on our proposal,
including how CMS will monitor hospitals for compliance, what the
remedial actions will be, and if the evaluation requirements apply to
collaborators as well.
Response: In order to monitor whether hospitals comply with the
model's evaluation requirements, we may do so through our existing
monitoring activities, which include data analysis and other methods
such as site visits and interviews, or through other methods. Under the
existing CJR model regulations, we have numerous remedial actions
available to us, should a hospital fail to comply with any of the model
requirements. We believe that our ability to evaluate the CJR model is
a crucial aspect of the model test, and therefore we are finalizing our
proposal to add provisions to Sec. 510.410(b)(1)(i)(G) to specify that
we may take remedial action if a CJR participant hospital,
collaborator, collaboration agent, or downstream collaboration agent
fails to comply with model-related evaluation activities. We refer
readers to section Sec. 510.410(b)(2) of the CJR regulations for a
list of potential remedial actions. Finally, we note that our
regulations at Sec. 510.410 state that model requirements such as the
addition of evaluation requirements apply to CJR collaborators as well
as participant hospitals.
3. Comment Solicitation: Incentivizing Participation in the CJR Model
In the August 17, 2017 proposed rule (82 FR 39310 through 39333),
we proposed to make participation in the CJR model voluntary in 33 MSAs
and for low-volume and rural hospitals in the remaining 34 MSAs via the
proposed opt-in election policy discussed in section III.B.1 of the
proposed rule (82 FR 39313). In order to keep hospitals in all MSAs
selected for participation in the CJR model actively participating in
the model, we solicited comment on ways to further incentivize eligible
hospitals to elect to continue participating in the CJR model for the
remaining years of the model and to further incentivize all participant
hospitals to advance care improvements, innovation, and quality for
beneficiaries throughout LEJR episodes.
Comment: Commenters suggested a variety of ways that CMS could
incentivize participation in the CJR model, and in bundled payment
models in general, including: Allowing convener organizations,
including medical device manufacturers, to participate in CJR; limiting
model participation to entities that provide direct patient care;
reducing the regional component of CJR target prices in performance
years 3 through 5 of the model; setting target prices at the higher of
the hospital-specific or regional amount; using MSAs instead of U.S.
Census Divisions to establish regional pricing; avoiding rebasing
prices near the beginning of the model; limiting the use of a national
trend factor to avoid penalizing hospitals that have reduced episode
spending under models like BPCI; including reconciliation and repayment
amounts in target prices; including risk adjustment in the pricing
methodology, including adjustment for socioeconomic factors; allowing
gainsharing on a more frequent basis; excluding further procedures and
diagnoses, such as cancer, from CJR model episodes; altering the
pricing structure to ensure that high-performing hospitals are
incentivized to remain in the model as it moves to regional pricing and
baseline years are updated to include later years; allow hospitals to
choose when they enter downside risk; annually evaluating whether
models should include outpatient procedures; changing precedence rules
to level the playing field for hospitals; broadening CJR to allow other
entities such as physicians and non-IPPS providers such as inpatient
rehabilitation facilities to initiate episodes and bear direct
financial risk for episode spending; offering waivers of certain IRF
payment policies to allow for additional flexibilities for post-acute
care providers; and releasing baseline data and target prices in
advance of model start dates.
Response: We thank the commenters for their suggestions to
incentivize participation in CJR and in bundled payment models in
general. We note that we have considered and discussed some of these
suggestions and issues in prior rulemaking that established the CJR
model regulations (see 80 FR 73273). We will continue to consider
[[Page 57083]]
these options raised by commenters as we move forward with CJR and
other models.
Additionally, we noted in the August 17, 2017 proposed rule that,
under the CJR refinements established in the January 3, 2017 EPM final
rule, the total amount of gainsharing payments for a performance year
paid to physicians, non-physician practitioners, physician group
practices (PGPs), and non-physician practitioner group practices
(NPPGPs) must not exceed 50 percent of the total Medicare approved
amounts under the Physician Fee Schedule for items and services that
are furnished to beneficiaries during episodes that occurred during the
same performance year for which the CJR participant hospital accrued
the internal cost savings or earned the reconciliation payment that
comprises the gainsharing payment being made (Sec. 510.500(c)(4)).
Distribution payments to these individuals and entities are similarly
limited as specified in Sec. 510.505(b)(8), and downstream
distribution payments are similarly limited as specified in Sec.
510.506(b)(8). These program integrity safeguards, which are consistent
with the gainsharing caps in other Innovation Center models, were
included to avoid setting an inappropriate financial incentive that may
result in stinting, steering or denial of medically necessary care (80
FR 73415 and 73416). While we did not propose in the August 17, 2017
proposed rule any changes to the gainsharing caps for these models, we
noted that we had heard various opinions from stakeholders, including
the Medicare Payment Advisory Commission (MedPAC), on the relative
benefit of such limitations on gainsharing and in the proposed rule we
solicited comment on this requirement and any alternative gainsharing
caps that may be appropriate to apply to physicians, non-physician
practitioners, PGPs, and NPPGPs.
Comment: Several commenters supported the current 50 percent
gainsharing cap. Other commenters offered a variety of recommendations
for changing the gainsharing limitations, including: Increasing the
frequency of gainsharing payments from hospitals to collaborators;
increasing the gainsharing cap on physicians, non-physician
practitioners, PGPs, and NPPGPs to 70 percent; granting hospitals
increased flexibility in designing their respective gainsharing
programs and determining the amount of savings to share with their
collaborators; removing all gainsharing limits, noting that when
surgeons coordinate with the hospital to provide efficient, high-
quality care that decreases cost, they should be able to fully share in
the resulting cost reductions; providing more clarity on the
applicability of the gainsharing policy; and coordinating unified
guidance from CMS and the HHS Office of the Inspector General (OIG)
relating to gainsharing and the model's fraud and abuse waivers, as
well as providing a mechanism for hospitals to ask questions about the
model's waivers.
Response: We thank the commenters for their suggestions regarding
gainsharing limitations and alternative gainsharing caps. We will
continue to consider these issues raised by commenters as we move
forward with CJR and other models.
Comments on the waivers of fraud and abuse laws for the CJR model
are beyond the scope of this rulemaking. Fraud and abuse waivers issued
in connection with the CJR model are available at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Fraud-and-Abuse-Waivers.html and on the OIG's Web site. No waivers of any fraud and
abuse authorities are being issued in this final rule.
C. Maintaining ICD-CM Codes for Quality Measures
In the CJR model final rule (80 FR 73474), we discussed how
specific International Classification of Diseases (ICD)--Clinical
Modifications (CM) procedure codes define group of procedures included
in the Hospital-level risk-standardized complication rate (RSCR)
following elective primary total hip arthroplasty (THA) and/or total
knee arthroplasty (TKA) (NQF #1550) (Hip/Knee Complications) measure.
In discussing quality measures in general, the ICD-CM codes relative to
defining a measure cohort are updated annually and are subject to
change. For example, in the EPM final rule (82 FR 389), we itemized
specific ICD-9-CM and ICD-10-CM codes for Hip/Knee Complications
measure. As quality measures are refined and maintained, the ICD-CM
code values used to identify the relevant diagnosis and/or procedures
included in quality measures can be updated. For example, CMS' Center
for Clinical Standards and Quality (CCSQ) has recently updated the list
of ICD-10 codes used to identify procedures included in the Hip/Knee
Complications measure. We did not intend for our preamble discussions
of certain ICD-CM codes used, for example, to identify procedures
included in the Hip/Knee Complications measures, and therefore the PRO
cohorts for the CJR model, to set a policy that would define the
relevant cohorts for the entirety of the CJR model. We should have also
directed readers to look for the most current codes on the CMS quality
Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
To ensure that model participants are aware of periodic ICD-CM code
updates to the Hip/Knee Complications measure, we proposed to clarify
that participants must use the applicable ICD-CM code set that is
updated and released to the public each calendar year in April by CCSQ
and posted on the Hospital Quality Initiative Measure Methodology Web
site (https://www.cms.gov/medicare/Quality-Initiatives-Patient-
Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html)
for purposes of reporting each of those measures.
CMS relies on the National Quality Forum (NQF) measure maintenance
update and review processes to update substantive aspects of measures
every 3 years. Through NQF's measure maintenance process, NQF endorsed
measures are sometimes updated to incorporate changes that we believe
do not substantially change the nature of the measures. Examples of
such changes include updated diagnosis or procedures codes, changes to
patient population, definitions, or extension of the measure
endorsement to apply to other settings. We believe these types of
maintenance changes are distinct from more substantive changes and do
not require the use of the agency's regulatory process used to update
more detailed aspects of quality measures.
Final Decision: We did not receive any comments regarding this
section. Therefore, we are finalizing the proposal without
modification.
D. Clarification of CJR Reconciliation Following Hospital
Reorganization Event
In the CJR model final rule (80 FR 73348) rule, we discussed our
method of setting target prices using all historical episodes that
would represent our best estimate of historical volume and payments for
participant hospitals when an acquisition, merger, divestiture, or
other reorganization results in a hospital with a new CCN. When a
reorganization event occurs during a performance year, CMS updates the
quality-adjusted episode target prices for the new or surviving
participant hospital (Sec. 510.300(b)(4)). Following the end of a
performance year, CMS performs annual reconciliation calculations in
accordance with the provisions established in Sec. 510.305. The annual
reconciliation calculations are specific
[[Page 57084]]
to the episodes attributable to each participant hospital entity for
that performance year. The applicable quality-adjusted episode target
price for such episodes is the quality-adjusted episode target price
that applies to the episode type as of the anchor hospitalization
admission date (Sec. 510.300(a)(3)). For example, if during a
performance year, two participant hospitals (Hospital A and Hospital B)
merge under the CCN of one of those two participant hospital's CCN
(Hospital B's CCN), (assuming no other considerations apply) three
initial (and three subsequent) annual reconciliation calculations for
that performance year are performed: An initial (and subsequent)
reconciliation for Hospital A for the episodes where the anchor
hospitalization admission occurred prior to the merger (as determined
by the CCN on the IPPS claim), using Hospital A's episode target price
for that time period; an initial (and subsequent) reconciliation for
Hospital B for the episodes where anchor hospitalization admission
occurred before the merger (as determined by the CCN on the IPPS
claim), using Hospital B's episode target price for that time period;
and an initial (and subsequent) reconciliation for the post-merger
entity (merged Hospitals A and B) for the episodes where anchor
hospitalization admission occurred on or after the merger's effective
date, using the episode target price for that time period.
Reorganization events that involve a CJR participant hospital and a
hospital that is not participating in the CJR model and result in the
new organization operating under the CJR participant hospital's CCN,
would not affect the reconciliation for the CJR participant hospital
for episodes that initiate before the effective date of the
reorganization event. Episodes that initiate after such reorganization
event would be subject to an updated quality-adjusted episode target
price that is based on historical episodes for the CJR participant
hospital which would include historical episode expenditures for all
hospitals that are integrated under the surviving CCN. These policies
have been in effect since the start of the CJR model on April 1, 2016.
To further clarify this policy for the CJR model, we proposed to add a
provision specifying that separate reconciliation calculations are
performed for episodes that occur before and after a reorganization
that results in a hospital with a new CCN at Sec. 510.305(d)(1). We
noted that we believe this clarification would increase transparency
and understanding of the payment reconciliation processes for the CJR
model. We sought comment on this proposal.
Comment: We received no comments on our proposal.
Response: We will finalize this proposal without modification. We
will continue to perform two reconciliation calculations for hospitals
that undergo a merger, consistent with our existing regulations.
E. Proposed Adjustment to the Pricing Calculation for the CJR
Telehealth HCPCS Codes To Include the Facility PE Values
In the CJR model final rule (80 FR 73450), we established 9 HCPCS
G-codes to report home telehealth evaluation and management (E/M)
visits furnished under the CJR telehealth waiver as displayed in Table
5. These codes have been payable for CJR model beneficiaries since the
CJR model began on April 1, 2016. Pricing for these 9 codes is updated
each calendar year to reflect the work and malpractice (MP) relative
value units (RVUs) for the comparable office and other outpatient E/M
visit codes on the Medicare Physician Fee Schedule (MPFS). As we stated
in the CJR model final rule (80 FR 73450), in finalizing this pricing
method for these codes, we did not include the practice expense (PE)
RVUs of the comparable office and other outpatient E/M visit codes in
the payment rate for these unique CJR model services, based on the
belief that practice expenses incurred to furnish these services are
marginal or are paid for through other MPFS services. However, since
the publication of the CJR model final rule, stakeholders have
expressed concern that the zero value assigned to the PE RVUs for these
codes results in inaccurate pricing. Stakeholders assert that there are
additional costs related to the delivery of telehealth services under
the CJR model such as maintaining the telecommunications equipment,
software and security and that, while these practice expense costs are
not equivalent to in-person service delivery costs, they are greater
than zero. In considering the pricing concerns voiced by stakeholders,
we recognized that there are resource costs in practice expense for
telehealth services furnished remotely. However, we did not believe the
current PE methodology and data accurately accounted for these costs
relative to the PE resource costs for other services. This belief
previously led us to assign zero PE RVUs in valuing these services, but
because we recognized that there are some costs that were not being
accounted for by the current pricing for these CJR model codes, we
believed an alternative to assigning zero PE RVUs would be to use the
facility PE RVUs for the analogous in-person services. While we
acknowledged that assigning the facility PE RVUs would not provide a
perfect reflection of practice resource costs for remote telehealth
services under the CJR model, in the absence of more specific
information, we believed it was likely a better proxy for such PE costs
than zero. Therefore, we proposed to use the facility PE RVUs for the
analogous services in pricing the 9 CJR HCPCS G codes shown in Table 5.
Additionally, we proposed to revise Sec. 510.605(c)(2) to reflect the
addition of the RVUs for comparable codes for the facility PE to the
work and MP RVUs we are currently using for the basis for payment of
the CJR telehealth waiver G codes.
Comment: Commenters supported CMS' proposal to assign facility PE
RVUs to the telehealth codes utilized under the CJR model, stating that
our proposal acknowledges the additional infrastructure and care
coordination costs associated with providing telehealth services and
supports increasing the use of telemedicine for Medicare beneficiaries.
A commenter requested that CMS allow physical therapists to furnish
telehealth services under CJR. Another commenter requested that CMS
develop a demonstration to test whether capitated payments may increase
the utilization of telehealth services.
Response: We thank the commenters for their support of our proposed
policy. We note that we did not propose to make any changes to the
regulations regarding providers and suppliers that may furnish
telehealth services under CJR. We agree that, while the PE values are
not a perfect representation of the overhead costs associated with
furnishing telehealth services, they are a reasonable approximation of
the care coordination and infrastructure costs. We are finalizing our
proposed policy to use the facility PE RVUs for analogous services when
pricing the 9 HCPCS G-codes used for telehealth services under the CJR
model. We also thank commenters for their suggestions around
incentivizing the use of telehealth more generally.
This policy is codified in the regulations at Sec. 510.605 (which
we inadvertently referred to as Sec. 510.65 in the proposed rule).
[[Page 57085]]
Table 5--HCPCS Codes for Telehealth Visits for CJR Model Beneficiaries in Home or Place of Residence
----------------------------------------------------------------------------------------------------------------
Work and MP RVUs equal to
those of the corresponding
office/outpatient E/M visit
HCPCS Code No. Long descriptor Short descriptor CPT code for same calendar
year under the PFS; PE RVUs
equal to the facility values
for each
----------------------------------------------------------------------------------------------------------------
G9481.............. Remote in-home visit Remote E/M new pt 10 mins............. 99201
for the evaluation
and management of a
new patient for use
only in the Medicare-
approved
Comprehensive Care
for Joint
Replacement model,
which requires these
3 key components:
A problem
focused history.
A problem
focused examination..
Straightforward
medical decision
making, furnished in
real time using
interactive audio
and video
technology..
Counseling and
coordination of care
with other
physicians, other
qualified health-
care professionals
or agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are self-
limited or minor.
Typically, 10
minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology.
G9482.............. Remote in-home visit Remote E/M new pt 20 mins............. 99202
for the evaluation
and management of a
new patient for use
only in the Medicare-
approved
Comprehensive Care
for Joint
Replacement model,
which requires these
3 key components:
An expanded
problem focused
history.
An expanded
problem focused
examination..
Straightforward
medical decision-
making, furnished in
real time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
low to moderate
severity. Typically,
20 minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9483.............. Remote in-home visit Remote E/M new pt 30 mins............. 99203
for the evaluation
and management of a
new patient for use
only in the Medicare-
approved
Comprehensive Care
for Joint
Replacement model,
which requires these
3 key components:
A detailed
history.
A detailed
examination..
Medical
decision making of
low complexity,
furnished in real
time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
moderate severity.
Typically, 30
minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9484.............. Remote in-home visit Remote E/M new pt 45 mins............. 99204
for the evaluation
and management of a
new patient for use
only in the Medicare-
approved
Comprehensive Care
for Joint
Replacement model,
which requires these
3 key components:
[[Page 57086]]
A
comprehensive
history.
A
comprehensive
examination..
Medical
decision making of
moderate complexity,
furnished in real
time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
moderate to high
severity. Typically,
45 minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9485.............. Remote in-home visit Remote E/M new pt 60 mins............. 99205
for the evaluation
and management of a
new patient for use
only in the Medicare-
approved
Comprehensive Care
for Joint
Replacement model,
which requires these
3 key components:
A
comprehensive
history.
A
comprehensive
examination..
Medical
decision making of
high complexity,
furnished in real
time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
moderate to high
severity. Typically,
60 minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9486.............. Remote in-home visit Remote E/M est. pt 10 mins............ 99212
for the evaluation
and management of an
established patient
for use only in the
Medicare-approved
Comprehensive Care
for Joint
Replacement model,
which requires at
least 2 of the
following 3 key
components:
A problem
focused history.
A problem
focused examination..
Straightforward
medical decision
making, furnished in
real time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are self
limited or minor.
Typically, 10
minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9487.............. Remote in-home visit Remote E/M est. pt 15 mins............ 99213
for the evaluation
and management of an
established patient
for use only in the
Medicare-approved
Comprehensive Care
for Joint
Replacement model,
which requires at
least 2 of the
following 3 key
components:
[[Page 57087]]
An expanded
problem focused
history.
An expanded
problem focused
examination..
Medical
decision making of
low complexity,
furnished in real
time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
low to moderate
severity. Typically,
15 minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9488.............. Remote in-home visit Remote E/M est. pt 25 mins............ 99214
for the evaluation
and management of an
established patient
for use only in the
Medicare-approved
Comprehensive Care
for Joint
Replacement model,
which requires at
least 2 of the
following 3 key
components:
A detailed
history.
A detailed
examination..
Medical
decision making of
moderate complexity,
furnished in real
time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
moderate to high
severity. Typically,
25 minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
G9489.............. Remote in-home visit Remote E/M est. pt 40 mins............ 99215
for the evaluation
and management of an
established patient
for use only in the
Medicare-approved
Comprehensive Care
for Joint
Replacement model,
which requires at
least 2 of the
following 3 key
components:
A
comprehensive
history.
A
comprehensive
examination..
Medical
decision making of
high complexity,
furnished in real
time using
interactive audio
and video
technology.
Counseling and
coordination of care
with other
physicians, other
qualified healthcare
professionals or
agencies are
provided consistent
with the nature of
the problem(s) and
the needs of the
patient or the
family or both.
Usually, the
presenting
problem(s) are of
moderate to high
severity. Typically,
40 minutes are spent
with the patient or
family or both via
real time, audio and
video
intercommunications
technology..
----------------------------------------------------------------------------------------------------------------
F. Clinician Engagement Lists
1. Background for Submission of Clinician Engagement Lists
Under the Quality Payment Program, the Advanced APM track of the
CJR model does not include eligible clinicians on a Participation List;
rather the CJR Advanced APM track currently includes eligible
clinicians on an Affiliated Practitioner List as defined under Sec.
414.1305 and described under Sec. 414.1425(a)(2) of the agency's
Quality Payment Program regulations. As such, the Affiliated
Practitioner List for the CJR model is the ``CMS-maintained list'' of
eligible clinicians that have ``a contractual relationship with the
Advanced APM Entity [for CJR, the participant hospital] for the
purposes of supporting the Advanced APM Entity's quality or cost goals
under the Advanced APM.'' As specified in our regulations at Sec.
414.1425(a)(2), CMS will use this list to identify the eligible
clinicians who will be assessed as Qualifying APM Participants (QPs)
for the year. CMS will make QP determinations individually for these
eligible clinicians as specified in Sec. Sec. 414.1425(b)(2), (c)(4),
and 414.1435.
In the EPM final rule, we stated that a list of physicians,
nonphysician practitioners, or therapists in a sharing arrangement,
distribution arrangement, or downstream distribution
[[Page 57088]]
arrangement, as applicable, would be considered an Affiliated
Practitioner List of eligible clinicians who are affiliated with and
support the Advanced APM Entity in its participation in the Advanced
APM for purposes of the Quality Payment Program. An in-depth discussion
of how the clinician financial arrangement list is considered an
Affiliated Practitioner List can be found in section V.O. of the EPM
final rule (82 FR 558 through 563). The clinician financial
arrangements list (Sec. 510.120(b)) will be used by CMS to identify
eligible clinicians for whom we would make a QP determination based on
services furnished through the Advanced APM track of the CJR model.
2. Proposed Clinician Engagement List Requirements
To increase opportunities for eligible clinicians supporting CJR
model participant hospitals by performing CJR model activities and who
are affiliated with participant hospitals to be considered QPs, we
proposed that each physician, nonphysician practitioner, or therapist
who is not a CJR collaborator during the period of the CJR model
performance year specified by CMS, but who does have a contractual
relationship with the participant hospital based at least in part on
supporting the participant hospital's quality or cost goals under the
CJR model during the period of the performance year specified by CMS,
would be added to a clinician engagement list.
In addition to the clinician financial arrangement list that is
considered an Affiliated Practitioner List for purposes of the Quality
Payment Program, we proposed the clinician engagement list would also
be considered an Affiliated Practitioner List. The clinician engagement
list and the clinician financial arrangement list would be considered
together an Affiliated Practitioner List and would be used by CMS to
identify eligible clinicians for whom we would make a QP determination
based on services furnished through the Advanced APM track of the CJR
model. As specified in Sec. 414.1425, as of our regulations, adopted
in the Calendar Year (CY) 2017 Quality Payment Program final rule (81
FR 77551), those physicians, nonphysician practitioners, or therapists
who are included on the CJR model Affiliated Practitioner List as of
March 31, June 30, or August 31 of a QP performance period would be
assessed to determine their QP status for the year. As discussed in the
2017 Quality Payment Program final rule (81 FR 77439 and 77440), for
clinicians on an Affiliated Practitioner List, we determined whether
clinicians meet the payment amount or patient count thresholds to be
considered QPs (or Partial QPs) for a year by evaluating whether
individual clinicians on an Affiliated Practitioner List have
sufficient payments or patients flowing through the Advanced APM; we do
not make any determination at the APM Entity level for Advanced APMs in
which eligible clinicians are not identified on a Participation List,
but are identified on an Affiliated Practitioner List. CMS makes the QP
determination based on Part B claims data, so clinicians need not track
or report payment amount or patient count information to CMS.
We noted that the proposal to establish a clinician engagement list
would broaden the scope of eligible clinicians that are considered
Affiliated Practitioners under the CJR model to include those without a
financial arrangement under the CJR model but who are either directly
employed by or contractually engaged with a participant hospital to
perform clinical work for the participant hospital when that clinical
work, at least in part, supports the cost and quality goals of the CJR
model. We proposed that the cost and quality goals of the additional
affiliated practitioners who are identified on a clinician engagement
list because they are contracted with a participant hospital must
include activities related to CJR model activities. CJR model
activities are activities related to promoting accountability for the
quality, cost, and overall care for beneficiaries during LEJR episodes
included in the CJR model, including managing and coordinating care;
encouraging investment in infrastructure, enabling technologies, and
redesigned care processes for high quality and efficient service
delivery; the provision of items and services during a CJR episode in a
manner that reduces costs and improves quality; or carrying out any
other obligation or duty under the CJR model.
Like the requirements of the clinician financial arrangement lists
specified at Sec. 510.120(b), for CMS to make QP determinations for
eligible clinicians based on services furnished through the CJR
Advanced APM track, we would require that accurate information about
each physician, non-physician practitioner, or therapist who is not a
CJR collaborator during the period of the CJR model performance year
specified by CMS, but who is included on a clinician engagement list,
be provided to CMS in a form and manner specified by CMS on a no more
than quarterly basis. Thus, we proposed that each participant hospital
in the Advanced APM track of the CJR model submit to CMS a clinician
engagement list in a form and manner specified by CMS on a no more than
quarterly basis. We proposed this list must include the following
information on eligible clinicians for the period of the CJR model
performance year specified by CMS:
For each physician, non-physician practitioner, or
therapist who is not a CJR collaborator during the period of the CJR
model performance year specified by CMS but who does have a contractual
relationship with a participant hospital based at least in part on
supporting the participant hospital's quality or cost goals under the
CJR model during the period of the CJR model performance year specified
by CMS:
++ The name, TIN, and NPI of the individual.
++ The start date and, if applicable, the end date for the
contractual relationship between the individual and participant
hospital.
Further, we proposed that if there are no individuals that meet the
requirements to be reported, as specified in any of Sec. 510.120
(b)(1) through (3) of the EPM final rule or Sec. 510.120(c) of the
August 17, 2017 proposed rule (82 FR 39310 through 39333), the
participant hospital must attest in a form and manner required by CMS
that there are no individuals to report.
Given that the proposal would require submission of a clinician
engagement list, or an attestation that there are no eligible
clinicians to be included on such a list, to reduce burden on
participant hospitals, we would collect information for the clinician
engagement list and clinician financial arrangement list at the same
time.
We sought comments on the proposal for submission of this
information. We noted that we were especially interested in comments
about approaches to information submission, including the periodicity
and method of submission to CMS that would minimize the reporting
burden on participant hospitals while providing CMS with sufficient
information about eligible clinicians to facilitate QP determinations.
For each participant hospital in the CJR Advanced APM track, we
proposed that the participant hospital must maintain copies of its
clinician engagement lists and supporting documentation (that is,
copies of employment letters or contracts) of its clinical engagement
lists submitted to CMS. Because we would use these lists to develop
Affiliated Practitioner Lists used for purposes of making QP
[[Page 57089]]
determinations, these documents would be necessary to assess the
completeness and accuracy of materials submitted by a participant
hospital and to facilitate monitoring and audits. For the same reason,
we further proposed that the participant hospital must retain and
provide access to the required documentation in accordance with Sec.
510.110.
Comment: Many commenters supported our proposal to broaden the
scope of eligible clinicians that could be considered Affiliated
Practitioners under the CJR model and therefore eligible for the
incentives available under the Advanced APM track of the Quality
Payment Program. Commenters urged CMS to finalize the policy as
proposed, stressing the importance of providing further opportunities
for clinician groups to engage in more comprehensive risk-based
Advanced APMs as an alternative to MIPS reporting. Commenters also
stated that a significant number of healthcare clinicians support
participant hospitals but their efforts are not accounted for by CMS,
despite the critical importance of the care they deliver to patients
included within the CJR model. These commenters noted that expanding
the number of Affiliated Practitioners will help to recognize the
efforts of those clinicians while also enhancing access to care under
the CJR model.
Response: We appreciate the positive feedback on the proposed
policy, and agree with commenters that increasing opportunities for
clinicians in a contractual relationship with Advanced APM participant
hospitals is valuable. We agree that the work these clinicians perform
on CJR model activities is essential to the success of care under the
CJR model and that we should be recognizing the efforts of these
clinicians by providing them the opportunity to qualify as qualified
practitioners under the Quality Payment Program.
Comment: A commenter requested that CMS provide clarification on
the definition of contractual agreements, and that CMS provide further
guidance on how CJR-related activities will be monitored and whether
there will be any thresholds that clinicians must meet to be considered
engaged in the quality or costs goals of CJR.
Response: To clarify, for each physician, non-physician
practitioner, or therapist who is not a CJR collaborator during the
period of the CJR model performance year specified by CMS, but who does
have a contractual relationship with the participant hospital based at
least in part on supporting the participant hospital's quality or cost
goals under the CJR model during the period of the performance year as
specified by CMS, can be included on the hospital's clinician
engagement list. The term contractual relationship encompasses the wide
range of relationships whereby a participant hospital engages a
clinician to perform work that at least in part supports the cost and
quality goals of the CJR model
CMS will monitor compliance with the requirement that clinicians be
engaged to support cost and quality goals via a range of methods,
including but not limited to document reviews and site visits.
CMS is not establishing a specific threshold a clinician must met
to be considered engaged in supporting the cost and quality goals of
the CJR model.
Comment: Several commenters objected to the requirement that
hospitals include a clinician's start and end date on the clinician
engagement list, noting a start date is not feasible because the
clinician's employment may have started before the start of the CJR
model and may not have end-dates but rather automatically renew.
Commenters also stated that maintaining and submitting a clinician
engagement list is burdensome. The commenters suggested that hospitals
should attest that the clinician was under contract during the model,
and that CMS could conduct audits to verify this information.
Response: We appreciate commenters' feedback on this requirement
for submitting the clinician engagement list. The requirement that a
hospital include the clinician's start date at a minimum will allow CMS
to determine whether the clinician is an eligible clinician for Quality
Payment Program purposes; a simple attestation will not suffice for the
Quality Payment Program. We understand that clinicians may have begun
the contractual relationship with the hospital prior to the start of
the CJR model. However, the hospital will have to determine whether and
when the contractual relationship with the clinician began supporting
the participant hospital's quality or cost goals under the CJR model.
The hospital would then report to CMS the date on which the
relationship began supporting the cost and quality goals of the CJR
model. For example, if a physician started working at the participant
hospital on 1/1/2000 and started supporting the participant hospital's
quality or cost goals under the CJR model on 7/15/2016, the hospital
would report 7/15/2016. The end date of the contractual relationship
need only be supplied if the clinician has one. Also, we understand
that maintaining a list can be burdensome; however, we developed this
requirement in response to feedback from stakeholders and hospitals who
expressed a desire to enhance opportunities for those physicians, non-
physician practitioners, and therapists without a financial arrangement
under the CJR model. Finally, in order to reduce burden, CMS will
collect information for the clinician financial arrangement list and
the clinician engagement list together. Hospitals will be able to
complete all required attestations at one time.
Summary of Final Decisions: We thank the commenters for their
suggestions and feedback. We are finalizing our policy as proposed.
This policy is codified at Sec. 510.120(c) through (e).
G. Clarification of Use of Amended Composite Quality Score Methodology
During CJR Model Performance Year 1 Subsequent Reconciliation
We conducted the initial reconciliation for performance year 1 of
the CJR model in early 2017 and made reconciliation payments to CJR
participant hospitals in fall 2017 to accommodate the performance year
1 appeals process timelines. We will conduct the subsequent
reconciliation calculation for performance year 1 of the CJR model
beginning in the first quarter of 2018, which may result in additional
amounts to be paid to participant hospitals or a reduction to the
amount that was paid for performance year 1. However, the results of
the performance year 1 subsequent reconciliation calculations will be
combined with the performance year 2 initial reconciliation results
before reconciliation payment or repayment amounts are processed for
payment or collection. Changes to the CJR model established in the EPM
final rule impact this process.
The improvements to the CJR model quality measures and composite
quality score methodology, which were finalized in the EPM final rule
(82 FR 524 through 526), were intended to be effective before the CJR
model's performance year 1 initial reconciliation. However, as noted in
section II. of the proposed rule (82 FR 39311), the effective date for
certain EPM final rule provisions, including those amending Sec. Sec.
510.305 and 510.315 to improve the quality measures and composite
quality score methodology, were delayed until May 20, 2017.
As a result, the CJR reconciliation reports issued in April 2017
were created in accordance with the provisions of Sec. Sec. 510.305
and 510.315 in effect as of April 2017; that is, the
[[Page 57090]]
provisions finalized in the CJR model final rule. In early 2018, we
would perform the performance year 1 subsequent reconciliation
calculation in accordance with the provisions Sec. Sec. 510.305 and
510.315 in effect as of early 2018, that is, established in the EPM
final rule. Applying the provisions established in the EPM final rule
to the performance year 1 subsequent reconciliation calculation may
result in significant differences between the reconciliation payments
calculated during the performance year 1 initial reconciliation and the
performance year 1 subsequent reconciliation. We anticipate that these
differences will be greater than those that would be expected as a
result of using more complete claims and programmatic data that will be
available for the subsequent reconciliation (due to the additional 12
months of time that will occur between the initial and subsequent
reconciliation calculations), more accurate identification of model
overlap and exclusion of episodes, as well as factoring in adjustments
to account for shared savings payments, and post-episode spending, as
specified in Sec. 510.305(i).
Specifically, the methodology used to determine the quality-
adjusted target price for the performance year 1 subsequent
reconciliation calculation would differ from the methodology used to
determine the quality-adjusted target price for the performance year 1
initial reconciliation calculation as follows: The quality-adjusted
target price would be recalculated to apply the amended reductions to
the effective discount factors (Sec. 510.315(f)), which would be
determined after recalculating the composite quality scores, including
applying more generous criteria for earning quality improvement points
(that is, a 2 decile improvement rather than 3 decile improvement as
specified in amended Sec. 510.315(d)). Using the recalculated quality-
adjusted target price, the net payment reconciliation amount (NPRA)
would be recalculated and include application of post-episode spending
reductions (Sec. 510.305(j)), as necessary, after determining the
limitations on loss or gain. Thus, calculating performance year 1
reconciliation payments using these two different provisions may result
in a range of upward or downward adjustments to participant hospitals'
performance year 1 payment amounts. We note that a downward adjustment
to the performance year 1 payment amounts would require payment
recoupment, if offset against a performance year 2 initial
reconciliation payment amount is not feasible, which may be burdensome
for participant hospitals.
In developing the August 17, 2017 proposed rule (82 FR 39310
through 39333), we also considered whether there might be benefit in
further delaying the amendments to Sec. Sec. 510.305 and 510.315 such
that the same calculations would be used for both the performance year
1 initial reconciliation and the subsequent performance year 1
reconciliation, and the use of the amended calculations would begin
with the performance year 2 initial reconciliation. We noted that we
believe such an approach would impact future CJR model implementation
and evaluation activities. Because determining the performance year 2
composite quality score considers the hospital's quality score
improvement from its performance year 1 score, using different
methodologies across performance years would require a mechanism to
account for differences in the quality score methodology, for example
we would have to develop a reliable crosswalk approach. If we were to
develop and use a crosswalk approach, participants and other
stakeholders would need to be informed about the crosswalk methodology
in order to validate data analyses across performance years and that
usage of the crosswalk would be ongoing throughout the model's duration
for consistency across performance years. This methodology could add
substantial complexity to this time-limited model. We also considered
that the composite quality score for some participant hospitals may be
higher under the revised scoring methodology. Delaying use of the
revised scoring methodology may disadvantage participants if their
composite quality score would be higher and result in a more favorable
discount percentage or allow the hospital to qualify for a
reconciliation payment. Therefore, we believed the best approach was to
apply the quality specifications as established in the EPM final rule
(that is, the amendments to Sec. Sec. 510.305 and 510.315 that became
effective May 20, 2017) to performance year 1 subsequent reconciliation
calculations to ensure that reconciliation calculations for subsequent
performance years will be calculated using the same methodology and to
improve consistency across performance years for quality improvement
measurement. Thus, for the reasons noted previously, we did not propose
to change the amendments to Sec. Sec. 510.305 and 510.315 that became
effective May 20, 2017. We sought comment on whether using an
alternative approach, such as the composite quality score methodology
from the CJR model final rule for the performance year 1 subsequent
reconciliation, would ensure better consistency for analyses across CJR
performance years.
Comment: We received several comments supporting our proposal to
apply the quality specifications as established in the EPM final rule
(that is, the amendments to Sec. Sec. 510.305 and 510.315 that became
effective May 20, 2017) to performance year 1 subsequent reconciliation
calculations. Several commenters favored this approach because they
believed it was unlikely for a hospital's quality category to decrease
between the initial and subsequent reconciliation. A commenter favored
applying the EPM final quality specifications to performance year 1
subsequent reconciliation calculations because they believed applying
more generous criteria for earning quality improvement points and using
a more appropriate national peer group as the reference for determining
performance would result in higher composite quality scores. The
commenter stated that these higher composite quality scores would allow
more CJR participant hospitals to be eligible for reconciliation
payments or to owe smaller repayments and would preserve the ability
for high-performing hospitals to earn reconciliation payments that more
accurately reflect their performance and investments in the model. The
commenter noted that transitioning to the revised composite quality
score methodology between the performance year 1 initial and subsequent
reconciliation calculations may increase the differences between the
results of the two calculations than would otherwise have occurred
during subsequent reconciliation due to the anticipated longer claims
run out, accounting for model overlap, and post-episode spending
adjustments. They stated that the difference would vary by hospital,
and could be positive or negative. The commenter clarified that the
impact of any larger downward adjustments, however, should occur in
performance year 1, when hospitals are not responsible for repayments
to CMS if their costs exceed their quality-adjusted target price.
Finally, the commenter stated that delaying implementation of the EPM
final quality specifications until performance year 2 initial
reconciliation calculations would increase CJR operational complexity
and complicate evaluation of CJR model results. The commenter urged CMS
to
[[Page 57091]]
share results from the performance year 1 subsequent reconciliation
with participant hospitals as early as feasible in 2018 to minimize
uncertainty for hospitals, should a downward adjustment occur.
Response: We appreciate the feedback we received from commenters on
the benefits of applying the quality specifications as established in
the EPM final rule to performance year 1 subsequent reconciliation
calculations, and we thank the commenters for their support of our
proposed policy. We agree there are benefits to applying the EPM final
rule quality specifications to performance year 1 subsequent
reconciliation calculations instead of delaying use of the amended
specifications until initial reconciliation for performance year 2.
These benefits include reducing the complexity of future evaluation of
the model and preventing possibly disadvantaging participants whose
composite quality scores would be higher as a result of applying the
amended specifications.
Comment: Several commenters opposed our proposal to apply the
quality specifications established in the EPM final rule to performance
year 1 subsequent reconciliation calculations. A commenter stated that
a hospital's payment should not be adjusted for performance year 1 as a
result of administrative issues, such as the delay of the effective
date for the EPM final rule, which occurred between the initial
reconciliation and the subsequent reconciliation for performance year
1.
Response: We appreciate the commenters' concerns regarding possible
downward adjustments to the performance year 1 payment amounts that
would require repayment recoupment. We intended for the refinements to
the CJR model quality measures and composite quality score methodology
finalized in the EPM final rule (82 FR 524 through 526) to be effective
before the CJR model's performance year 1 initial reconciliation. We
acknowledge that the delayed effective date for the EPM final rule has
caused frustration, and we acknowledge that a downward adjustment
requiring payment recoupment would be burdensome for participant
hospitals.
For these reasons, we sought comment on whether using an
alternative approach, such as applying the quality composite score
methodology from the CJR model final rule to the performance year 1
subsequent reconciliation, would ensure better consistency for analyses
across performance years. Commenters generally supported our proposal
to apply the quality specifications as established in the EPM final
rule. Furthermore, we believe that the benefits to hospitals of
applying the quality specifications finalized in the EPM final rule to
performance year 1 subsequent reconciliation justify finalizing our
proposal. This approach ensures that reconciliation calculations for
subsequent performance years will be calculated using the same
methodology, eliminating the need for a the development of a crosswalk
approach for reconciling differences in composite quality scores across
performance years and reducing the impact on future model evaluation
efforts.
Comment: Several commenters provided out-of-scope public comments
that suggested changes to the composite quality score methodology, the
choice of quality measures in the EPM and CJR models, and the patient
reported outcomes (PRO) data submission. Several commenters believed
the revised composite quality score methodology was not in the best
interest of model success, and CMS was inaccurate in stating that the
changes to the composite quality score would result in a higher
composite quality score for some participant hospitals. Several
commenters suggested we include, replace, or drop some or all of the
finalized quality measures. Finally, a commenter stated that CMS did
not provide sufficient supporting rationale for determinations
regarding patient-reported outcomes (PRO) data submission, nor did CMS
provide clear information on which patients were eligible for PRO data
collection. This commenter requested that CMS provide hospitals with
lists of PRO-eligible patients on a regular basis.
Response: We consider these public comments to be outside of the
scope of the August 17, 2017 proposed rule. Therefore, we are not
addressing them in this final rule and interim final rule with comment
period. We may consider these public comments in future rulemaking. We
do note that a number of resource guides on the PRO data collection
process and eligible patients is available to CJR participant hospitals
on the CJR Connect site.
Summary of Final Decisions: We are finalizing our proposal to apply
the quality specifications as established in the EPM final rule (that
is, the amendments to Sec. Sec. 510.305 and Sec. 510.315 that became
effective May 20, 2017) to performance year 1 subsequent reconciliation
calculations.
H. Clarifying and Technical Changes Regarding the Use of the CMS Price
(Payment) Standardization Detailed Methodology
Based on questions we received from participant hospitals during
the performance year 1 reconciliation process, we proposed to make two
technical changes to the CJR model regulations to clarify the use of
the CMS Price (Payment) Standardization Detailed Methodology, posted on
the QualityNet Web site at https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228772057350, in the calculation of target prices and actual episode spending.
This pricing standardization approach was the same as that used for the
Hospital Value-Based Purchasing Program's (HVBP) Medicare spending per
beneficiary metric. In section III.C.3.a. of the CJR model final rule
(80 FR 73331 through 73333), we finalized how we would operationalize
the exclusion of the various special payment provisions in calculating
CJR model episode expenditures, both historical episode spending and
performance year episode spending, by relying upon the CMS Price
(Payment) Standardization Detailed Methodology with modifications.
However, we did not clearly articulate the finalized policy in the
regulations at 42 CFR part 510. Thus, we proposed the following
technical changes to bring the regulatory text into conformity with our
intended policy and to reduce potential stakeholder uncertainty about
how the price (payment) standardization methodology is used. We
proposed to insert ``standardized'' into the definition of actual
episode payment in Sec. 510.2, and insert ``with certain
modifications'' into Sec. 510.300(b)(6) to account for the
modifications we must make to the standardization methodology to ensure
all pricing calculations are consistent with our finalized policies.
Comment: We received no comments on our proposal.
Response: We are finalizing our proposal to insert ``standardized''
into the definition of actual episode payment in Sec. 510.2, and
insert ``with certain modifications'' into Sec. 510.300(b)(6).
I. Public Comments on Removal of Total Knee Arthroplasty (TKA) From the
Inpatient-Only (IPO) List and on the Need for a Disaster Policy for
Affected CJR Episodes
1. Pricing Implications of the Removal of TKA From the IPO List
In the CY 2017 Outpatient Prospective Payment System (OPPS)
Proposed Rule
[[Page 57092]]
(81 FR 45679 through 45681) we sought comment on the potential removal
of TKA from the IPO list from interested parties, although we did not
make any proposals regarding the issue. We specifically requested input
on potential changes to the BPCI initiative and CJR model if we should
make such a policy change in the future. In the CY 2018 Outpatient
Prospective Payment System (OPPS) Proposed Rule (82 FR 33558), we
proposed to remove total knee arthroplasty from the IPO list. We refer
readers to that proposed rule for more details regarding the proposal.
Comment: Numerous commenters requested that, should we finalize the
proposal to remove TKA from the IPO list, we also finalize a policy to
modify the CJR pricing methodology. Commenters stated that if TKA is
removed from the IPO list, the CJR target prices will no longer
accurately reflect spending for the inpatient population, given that
the historical time period used to set prices included all Medicare TKA
cases under MS-DRGs 469 and 470, including those that could be
performed on an outpatient basis (and are presumably less costly) if
TKA is removed from the IPO list. Commenters were concerned that if
Medicare begins to pay for TKA in outpatient settings and does not make
adjustments to CJR prices, the case mix under the model (that is,
beneficiaries in CJR episodes) will include only more costly and
higher-acuity cases that are not appropriate for outpatient settings.
Thus, LEJR procedures furnished in inpatient settings (and included in
CJR episodes) will be more costly than those in outpatient settings,
negatively affecting CJR hospitals' potential to financially succeed
under the model. Commenters noted that without a pricing adjustment,
CJR participant hospitals could have a hard time meeting spending
targets if many lower-cost cases move to the outpatient setting.
Commenters suggested a variety of solutions, including: Setting a
separate target price for outpatient TKA cases and including them in
CJR; various methodologies to estimate the removal of outpatient cases
from the baseline period when setting target prices; and robust risk
adjustment. A commenter suggested we test the removal of TKA from the
IPO list as part of our bundled payment models before implementing a
change on a national basis. Other commenters stated that hospitals
eligible for a voluntary participation election in January 2018 cannot
make a participation decision without knowing how CMS will modify the
CJR pricing methodology to ensure participant hospitals are not
negatively affected by the removal of TKA from the IPO list.
Response: We thank the commenters for their feedback and thoughtful
suggestions on ways we could refine the CJR pricing methodology to
ensure our decision to remove TKA from the IPO list would not harm
hospitals. We refer readers to the 2018 OPPS Final Rule (82 FR 52356)
which discusses our finalized policy to remove TKA from the IPO list.
Because we did not make a proposal regarding changes to the CJR payment
methodology and because there is no clinical experience or claims data
yet available for analysis on the potential impacts of this policy
change on the CJR target pricing methodology, we will consider all
comments and address this issue through future rulemaking, as
appropriate.
2. Need for a Policy To Address the Recent Hurricanes and Other Natural
Disasters
In late August and September 2017 several hurricanes created
significant damage to multiple states and in late September 2017,
severe wildfires wreaked havoc on many counties in California.
Comment: Several commenters requested that CMS recognize the unique
challenges faced by CJR participant hospitals during the recent natural
disasters that have occurred in or near several of the CJR MSAs.
Commenters noted that beneficiaries in disaster areas may have required
unplanned or extensive healthcare services as a result of evacuation or
other emergency situations. Commenters were also concerned that
hospitals in the disaster areas would not be able to complete their
quality reporting requirements. Commenters stated that CJR participant
hospitals should not be held financially accountable for such spending
that is beyond their control. Commenters suggested that CMS offer a
waiver of the participation requirement or another mechanism to ensure
that hospitals are not held accountable for circumstances beyond their
control due to natural disasters.
Response: We thank the commenters for their suggestions. We
understand that some participant hospitals in the CJR model have been
impacted by recent natural disasters and that there is a clear need for
a policy in CJR to address expenditures outside the control of
hospitals located in areas experiencing extreme and uncontrollable
circumstances.
III. Provisions of the Interim Final Rule With Comment Regarding
Significant Hardship Due to Extreme and Uncontrollable Circumstances in
the CJR Model
A. Overview and Background
This interim final rule with comment period is being issued in
conjunction with this final rule to address the need for a policy that
would apply for performance year 2 (and, when finalized, that would
also apply for the future performance years 3 through 5 of the CJR
model) providing some flexibility in determining episode spending for
CJR participant hospitals located in areas impacted by extreme and
uncontrollable circumstances. This interim final rule with comment
period most notably addresses Hurricane Harvey, Hurricane Irma,
Hurricane Nate, and the California wildfires of August, September, and
October 2017 but could also include other similar events that occur
within a given performance year, including performance year 2, if those
events meet the requirements we are setting forth in this policy in
this interim final rule with comment. While Hurricane Maria, which also
occurred in the same time frame, had and, as of the writing of this
rule, continues to have a significant and crippling effect on Puerto
Rico and the U.S. Virgin Islands, Hurricane Maria is not part of this
particular interim final rule with comment as the CJR model is not in
operation in the areas impacted by Hurricane Maria, and, therefore
there are no CJR participant hospitals that have been impacted by
Hurricane Maria. Hurricane Harvey, Hurricane Irma, Hurricane Nate, and
the California wildfires affected large regions of the United States
where the CJR model operates, leading to widespread destruction of
infrastructure that impacted residents' ability to continue normal
functions afterwards.
At least 101 CJR participant hospitals are located in the areas
affected by Hurricane Irma and Hurricane Harvey, at least 22 CJR
participant hospitals are located in areas impacted by the California
wildfires and approximately 12 are in the areas affected by Hurricane
Nate. Based on a review of news articles focusing on the hurricanes, at
least 35 hospitals evacuated for Hurricane Irma \1\ and several
hospitals evacuated at least partially for Hurricane Harvey.\2\ In
[[Page 57093]]
Florida, at least two CJR participant hospitals in Miami, (Anne Bates
Leach Eye Hospital and University of Miami Hospital) and one CJR
participant hospital in Miami Beach--Mount Sinai Medical Center--had to
close because of Hurricane Irma.\3\ Tampa General Hospital, a CJR
participant hospital in Tampa, evacuated all patients except for those
too ill to move.\4\ In response to Hurricane Irma, on September 9,
2017, Tampa Community Hospital, CJR participant hospital, suspended all
services and evacuated all patients to two other CJR participant
hospitals, Brandon Regional Hospital and Medical Center of Trinity.\5\
In Texas, Baptist Beaumont Hospital, a CJR participant hospital in
Beaumont, Texas, had to shut down and evacuate on August 31, 2017.\6\
On the same day, Christus Southeast Texas St. Elizabeth, another CJR
participant hospital in Beaumont, Texas, left only the emergency and
trauma center of the hospital open in order to ensure they had enough
water for the patients still at the hospital.\6\ Patients seeking care
at the Medical Center of Southeast Texas, a CJR participant hospital in
Port Arthur, Texas, had to be taken by dump truck through the submerged
hospital parking lot to the perimeter of the property, where a boat
would take them to the hospital.\6\ An additional review of news
related to California wildfires also shows that the fires caused
various hospitals to evacuate patients.\7\ On November 16, 2017, five
counties in Alabama were declared as major disaster areas due to the
destruction of structures, piers, roads and bridges caused by Hurricane
Nate.\3\ Although we do not yet have enough data to evaluate these
events' specific effects on CJR episodes, we anticipate that at least
some CJR participant hospitals may have experienced episode cost
escalation as a result of hurricane or fire damage and subsequent
emergency evacuations.
---------------------------------------------------------------------------
\1\ Irma forces at least 35 hospitals to evacuate patients.
Here's a rundown. September 9, 2017. https://www.statnews.com/2017/09/09/irma-hospital-evacuations-rundown/. Accessed November 21,
2017.
\2\ After Harvey Hit, a Texas Hospital Decided to Evacuate.
Here's How Patients Got Out. September 6, 2017. https://www.nytimes.com/2017/09/06/us/texas-hospital-evacuation.html.
Accessed November 21, 2017.
\3\ Hurricane Irma causes 36 Florida hospitals to close.
September 12, 2017. https://www.healthdatamanagement.com/news/hurricane-irma-causes-36-florida-hospitals-to-close. Accessed
November 22, 2017.
\4\ At Tampa Hospital in Evacuation Zone, 800 Patients and Staff
Ride Out Hurricane Irma. September 10, 2017. https://weather.com/storms/hurricane/news/hurricane-irma-tampa-hospital-evacuation-zone.
Accessed November 22, 2017.
\5\ Tampa Community Hospital has suspended all services and has
evacuated patients. September 9, 2017. https://tampacommunityhospital.com/about/newsroom/tampa-community-hospital-has-suspended-all-services-and-has-evacuated-patients. Accessed
November 22, 2017.
\3\ https://www.al.com/news/mobile/index.ssf/2017/11/trump_declares_major_disaster.html.
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Under Sec. 510.305(e), as of performance year 2, CJR participant
hospitals who have episode costs as calculated under Sec.
510.305(e)(1)(iii) (for example, episode costs that exceed the target
price for the performance year) will owe CMS 5 percent of the loss.
While the intent of this policy is to incentivize providers to control
costs while managing and improving the quality of CJR patient care, we
note that in extreme and uncontrollable circumstances, prudent patient
care management may involve potentially expensive air ambulance
transport or prolonged inpatient stays when other alternatives are not
practical due, for example, to state and local mandatory evacuation
orders or compromised infrastructure. In addition to the news reports
of disaster conditions that impacted several CJR participant hospitals,
a number of research studies on natural disasters and rushed
evacuations for hospitals support our assumption that costs can rise
during disaster situations.\4\
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\4\ Tia Powell, Dan Hanfling, Lawrence O. Gostin. Emergency
Preparedness and Public Health: The Lessons of Hurricane Sandy.
JAMA. 2012;308(24):2569-2570. doi:10.1001/jama.2012.108940;
Christine S. Cocanour, Steven J. Allen, Janine Mazabob, John W.
Sparks, Craig P. Fischer, Juanita Romans, Kevin P. Lally. Lessons
Learned From the Evacuation of an Urban Teaching Hospital. Arch
Surg.2002;137(10):1141-1145. doi:10.1001/archsurg.137.10.1141.
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Currently, CJR regulations at Sec. 510.210 do not allow
cancellation of episodes for extreme and uncontrollable circumstances.
The CJR regulations at Sec. 510.305 also do not permit an adjustment
to account for episode spending that may have escalated significantly
due to events driven by extreme and uncontrollable circumstances.
B. Identifying Participant Hospitals Affected by Extreme and
Uncontrollable Circumstances
For purposes of developing a policy to identify hospitals affected
by extreme and uncontrollable circumstances, we consulted section 1135
of the Social Security Act, where the Secretary may temporarily waive
or modify certain Medicare requirements to ensure that sufficient
health care items and services are available to meet the needs of
individuals enrolled in Social Security Act programs in the emergency
area and time periods and that providers who provide such services in
good faith can be reimbursed and exempted from sanctions (absent any
determination of fraud or abuse). The Secretary has invoked this
authority in response to significant natural disasters such as
Hurricane Katrina in 2005 and Superstorm Sandy in 2012. Though the 1135
waiver authority enables us to take actions that give healthcare
providers and suppliers greater flexibility, it does not allow for
payment adjustment for participant hospitals in the CJR model. However,
the extreme and uncontrollable circumstance policy should only apply
when a disaster is widespread and extreme. A section 1135 waiver
identifies the ``emergency area'' and ``emergency period,'' as defined
in section 1135(g) of the Social Security Act, for which waivers are
available. We believe it is appropriate to establish an extreme and
uncontrollable circumstance policy that applies only when and where the
magnitude of the event calls for the use of special waiver authority to
help providers respond to the emergency and continue providing care.
The extreme and uncontrollable circumstance policy also should be
tailored to the specific areas experiencing the extreme and
uncontrollable circumstance. Section 1135 waivers typically are
authorized for a geographic area that may encompass a greater region
than is directly and immediately affected by the relevant emergency.
For purposes of this policy, a narrower geographic scope than the full
emergency area (as that term is defined in section 1135(g) of the Act)
\5\ would ensure that the payment policy adjustment is focused on the
specific areas that experienced the greatest adverse effects from the
extreme and uncontrollable circumstance and is not applied to areas
sustaining little or no adverse effects.
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\5\ (g) DEFINITIONS.--For purposes of this section: (1)
EMERGENCY AREA; EMERGENCY PERIOD.--An ``emergency area'' is a
geographical area in which, and an ``emergency period'' is the
period during which, there exists--(A) an emergency or disaster
declared by the President pursuant to the National Emergencies
Act[102] or the Robert T. Stafford Disaster Relief and Emergency
Assistance Act[103]; and (B) a public health emergency declared by
the Secretary pursuant to section 319 of the Public Health Service
Act.
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To narrow the scope of this policy to ensure it is applied to those
providers most likely to have experienced the greatest adverse effects,
we would therefore also require that the area be declared as a major
disaster area under the Stafford Act, which serves as a condition
precedent for the Secretary's exercise of the 1135 waiver authority.
Once an area is declared as a major disaster area under the Stafford
Act, the specific counties, municipalities, parishes, territories, and
tribunals that are part of the major disaster area are identified and
can be located on Federal Emergency Management Agency
[[Page 57094]]
(FEMA) Web site at www.FEMA.gov/disasters. For this policy, only major
disaster declarations under the Stafford Act will be used to identify
the specific counties, municipalities, parishes, territories, and
tribunals where the extreme and uncontrollable circumstance took place.
Using the major disaster declaration as a requirement for the extreme
and uncontrollable event policy also ensures that the policy would
apply only when the event is extreme, meriting the use of special
authority, and targeting the specific area affected by the extreme and
uncontrollable circumstance. To note, we are not including emergency
declarations under the Stafford Act or national emergency declarations
under the National Emergencies Act in this policy, even if such a
declaration serves as a basis for the Secretary's invoking the 1135
waiver authority. This is because we believe it is appropriate for our
extreme and uncontrollable circumstance policy to apply only in the
narrow circumstance where the circumstance constitutes a major
disaster, which are more catastrophic in nature and tend to have
significant impacts to infrastructure, rather than the broader grounds
for which an emergency could be declared.
In establishing a policy to define extreme and uncontrollable
circumstances for the CJR model, we identify an area as having
experienced `extreme and uncontrollable circumstances,' if it is within
an ``emergency area'' and ``emergency period'' as defined in section
1135(g) of the Act, and also is within a county, parish, U.S. territory
or tribal government designated in a major disaster declaration under
the Stafford Act that served as a condition precedent for the
Secretary's exercise of the 1135 waiver authority.
We believe Hurricanes Harvey, Irma, and Nate and the recent
California wildfires trigger the automatic extreme and uncontrollable
circumstance policy we are adopting in this interim final rule with
comment period. For the performance year 2 reconciliation that will be
conducted beginning in March of 2018, this extreme and uncontrollable
circumstance policy will apply to those CJR participant hospitals whose
CCN has a primary address located in a state, U.S. territory, or tribal
government that is within an ``emergency area'' and ``emergency
period,'' as those terms are defined in section 1135(g) of the Act, for
which the Secretary has issued a waiver under section 1135 of the Act
and that is designated in a major disaster declaration under the
Stafford Act that served as a condition precedent for the Secretary's
exercise of the 1135 waiver authority. The states and territories for
which section 1135 waivers were issued in response to Hurricanes
Harvey, Irma, Nate and the California wildfires are Alabama,
California, Florida, Georgia, South Carolina, Texas, Louisiana,
Mississippi. Section 1135 waivers also were issued for Puerto Rico and
the Virgin Islands as a result of Hurricane Maria, but there are no CJR
participant hospitals with CCNs with a primary address in either of
these areas. To view the 1135 waiver documents and for additional
information on section 1135 waivers see: https://www.cms.gov/About-CMS/Agency-Information/Emergency/. The major disaster declarations are
located on FEMA Web site at https://www.fema.gov/disasters. When
locating the counties, municipalities, parishes, tribunals, and
territories for the major disaster declaration, FEMA designates these
locations as `designated areas' for that specific state, or tribunal.
All counties, municipalities, parishes, tribunals, and territories
identified as designated areas on the disaster declaration are
included.
The counties, parishes, and tribal governments that have met the
criteria for the CJR policy on extreme and uncontrollable events in
performance year 2 are: \6\
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\6\ The Secretary issued Mississippi a waiver under Section 1135
for Hurricane Nate, however the President did not issue a major
disaster declaration (An emergency disaster declaration was
issued.), so under this policy Mississippi is not included on this
list.
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The following counties in Alabama: Autauga, Baldwin,
Choctaw, Clarke, Dallas, Macon, Mobile, and Washington.\7\
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\7\ https://www.fema.gov/disaster/4349/designated-areas.
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The following counties in California: Butte; Lake; Mendocino; Napa;
Nevada Orange; Sonoma; and Yuba.\8\
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\8\ https://www.fema.gov/disaster/4344/designated-areas.
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All 67 counties \9\ and Big Cypress Indian Reservation,
Brighton Indian Reservation, Fort Pierce Indian Reservation, Hollywood
Indian Reservation, Immokalee Indian Reservation, Tampa Reservation in
Florida.\10\
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\9\ https://www.fema.gov/disaster/4337/designated-areas.
\10\ https://www.fema.gov/disaster/4341/designated-areas.
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All 159 counties in Georgia.\11\
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\11\ https://www.fema.gov/disaster/4338/designated-areas.
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All 46 counties, and the Catawba Indian Reservation in
South Carolina.\12\
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\12\ https://www.fema.gov/disaster/4346/designated-areas.
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The following counties in Texas: Aransas; Austin; Bastrop;
Bee; Bexar; Brazoria; Calhoun; Chambers; Colorado; Dallas; Dewitt;
Fayette; Fort Bend; Galveston; Goliad; Gonzales; Hardin; Harris;
Jackson; Jasper; Jefferson; Karnes; Kleberg; Lavaca; Lee; Liberty;
Matagorda; Montgomery; Newton; Nueces; Orange; Polk; Refugio; Sabine;
San Jacinto; San Patricio; Tarrant; Travis; Tyler; Victoria; Walker;
Waller; and Wharton.\13\
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\13\ https://www.fema.gov/disaster/4332/designated-areas.
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The following parishes in Louisiana: Acadia; Allen;
Assumption; Beauregard; Calcasieu; Cameron; De Soto; Iberia; Jefferson
Davis; Lafayette; Lafourche; Natchitoches; Plaquemines; Rapides; Red
River; Sabine; St. Charles; St. Mary; Vermilion; and Vernon.\14\
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\14\ https://www.fema.gov/disaster/4345/designated-areas.
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Using these criteria, CMS was able to identify at least 101 CJR
participant hospitals located in the areas affected by Hurricanes
Harvey and Hurricane Irma, approximately 12 CJR participant hospitals
in the areas affected by Hurricane Nate, and at least 22 CJR
participant hospitals in areas impacted by the California wildfires. As
there are no CJR model areas in Puerto Rico or the U.S. Virgin Islands,
we note that no CJR participant hospitals were impacted by Hurricane
Maria. CMS will notify providers for whom this extreme and
uncontrollable circumstances policy will apply for performance year 2
(and subsequent performance years if and when the policy is invoked)
via the initial reconciliation reports CMS delivers to providers upon
completion of the reconciliation calculations, which under Sec.
510.305(d) are initiated beginning 2 months after the close of the
performance year.
Though the Hurricanes and California wildfires were the driving
force for developing the extreme and uncontrollable circumstance
policy, this policy is being implemented for the duration of the CJR
model, and we are amending the CJR regulations accordingly, as further
outlined later.
B. Provisions for Adjusting Episode Spending Due to Extreme and
Uncontrollable Circumstances
Without a policy to provide CJR participant hospitals some
flexibility in extreme and uncontrollable circumstances, we might
inadvertently create an incentive to place cost considerations above
patient safety, especially in the later years of the CJR model when the
downside risk percentage increases. In considering policy alternatives
to help ensure beneficiary protections by mitigating
[[Page 57095]]
participant hospitals' financial liability for costs resulting from
extreme and uncontrollable circumstances, we considered and rejected a
blanket cancellation of all episodes occurring during the relevant
period. We do not believe that a blanket cancellation would be in
either beneficiaries' or CJR participant hospitals' best interests, as
it is possible that hospitals can manage costs and earn a
reconciliation payment despite these extreme and uncontrollable
circumstances.
Furthermore, we would not want CJR participant hospitals to limit
case management services for beneficiaries in CJR episodes during
extreme and uncontrollable circumstances, when prudent care management
could potentially involve using significantly more expensive transport
or care settings. Therefore, we determined that capping the actual
episode spending at the target amounts for those episodes would be the
best way to protect beneficiaries from potential care stinting and
hospitals from escalating costs. This will also ensure that those
hospitals are still able to earn reconciliation payments on those
eligible episodes where the disaster did not have a noticeable impact
on cost.
In determining the start date of episodes to which this extreme and
uncontrollable circumstances policy would apply, we determined that a
window of 30 days prior to and including the date that the emergency
period (as defined in section 1135(g)) begins should reasonably capture
those beneficiaries whose high CJR episode costs could be attributed to
extreme and uncontrollable circumstances. We believe this 30-day window
is particularly appropriate due to the 90-day CJR model episode length.
Including all episodes that begin within 30 days before the date the
emergency period begins should enable us to include the majority of
beneficiaries still in institutional settings and who are still within
the first third of their episodes when the extreme and uncontrollable
circumstance arises. We note that the average length of stay for DRG
469 is between 5 and 6 days and the average length of stay for DRG 470
is between 2 and 3 days (see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/FY2018-CMS-1677-FR-Table-5.zip).
Under Sec. 510.300(a)(1), we differentiated fracture and non-
fracture CJR episodes and pricing, noting that lower extremity joint
replacement procedures performed as a result of a hip fracture are
typically emergent procedures. Fracture episodes typically occur for
beneficiaries with more complex health issues and can involve higher
episode spending. We do not expect a high volume of CJR non-fracture
episodes to be initiated once extreme and uncontrollable circumstances
arise, given that it is not prudent to conduct non-fracture major joint
replacement surgeries, which generally are elective and non-emergent,
until conditions stabilize and infrastructure is reasonably restored.
Therefore, for non-fracture episodes, this extreme and uncontrollable
circumstances policy will apply only to dates of admission to anchor
hospitalization that occur between 30 days before and up to the date on
which the emergency period (as defined in section 1135(g)) begins. We
believe this policy empowers hospitals to decide whether they can
safely and appropriately perform non-fracture THA and TKA procedures
after the commencement of the emergency period and whether or not
performing these procedures will subject their organization to undue
financial risk resulting from increased costs that are beyond the
organization's control.
However, for CJR fracture episodes, the extreme and uncontrollable
circumstances policy will apply to dates of admission to the anchor
hospitalization that occur within 30 days before, on, or up to 30 days
after the date the emergency period (as defined in section 1135(g))
begins. We recognize that fracture cases in CJR are often emergent and
unplanned, and it may not be prudent to postpone major joint surgical
procedures in many of those CJR fracture cases. Therefore, fracture
episodes with a date of admission to the anchor hospitalization that is
on or within 30 days before or after the date that the emergency period
(as defined in section 1135(g) of the Act) begins are subject to this
extreme and uncontrollable circumstances policy. We believe that this
60-day window should ensure that hospitals caring for CJR fracture
patients during extreme and uncontrollable circumstances are adequately
protected from episode costs beyond their control.
For performance years 2 through 5, for participant hospitals that
are located in an emergency area during an emergency period, as those
terms are defined in section 1135(g) of the Act, for which the
Secretary has issued a waiver under section 1135, and in a county,
parish, U.S. territory or tribal government designated in a major
disaster declaration under the Stafford Act, the following conditions
apply. For a non-fracture episode with a date of admission to the
anchor hospitalization that is on or within 30 days before the date
that the emergency period (as defined in section 1135(g)) begins,
actual episode payments are capped at the target price determined for
that episode under Sec. 510.300. For a fracture episode with a date of
admission to the anchor hospitalization that is on or within 30 days
before or after the date that the emergency period (as defined in
section 1135(g)) begins, actual episode payments are capped at the
target price determined for that episode under Sec. 510.300.
We are codifying this new extreme and uncontrollable circumstance
policy at Sec. 510.305(k). We seek comment on potential modifications
refinements we might make to this policy for future performance year
reconciliations after performance year 2.
D. Waiver of Proposed Rulemaking for Provisions Related to Extreme and
Uncontrollable Circumstances
Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA),
the agency is required to publish a notice of the proposed rule in the
Federal Register before the provisions of a rule take effect.
Similarly, section 1871(b)(1) of the Act requires the Secretary to
provide notice of the proposed rule in the Federal Register with no
less than 60 days for public comment. Section 553(b)(B) of the APA and
section 1871(b)(2)(C) of the Act authorize an agency to dispense with
normal rulemaking requirements for good cause if the agency makes a
finding that the notice-and-comment process is impracticable,
unnecessary, or contrary to the public interest.
We find that there is good cause to waive the notice-and-comment
requirements under sections 553(b)(B) of the APA and section
1871(b)(2)(C) due to the impact of Hurricanes Harvey, Irma, and Nate
and the California wildfires as described in section A. of this interim
final rule with comment period. Based on the size and scale of the
destruction and displacement caused by these natural disasters in the
regions identified, and the news reports regarding specific impacts to
hospitals that are participating in the CJR model discussed in section
A of this interim final rule with comment, we believe it is likely that
some CJR episodes at participant hospitals have been significantly and
adversely affected by these events. As discussed in detail in section A
of this interim final rule with comment, due to extreme flooding or
infrastructure destruction where many major and minor roads became
impassable and homes and/or institutions were flooded and rendered
[[Page 57096]]
inhabitable, it is possible that some beneficiaries may have required
air ambulance transport or extended institutional stays in inpatient or
post-acute care settings; these necessary services may drive actual
episode costs well beyond the target prices.
Furthermore, we received several requests for CMS to provide
concessions for the unique challenges faced by CJR hospitals during the
recent natural disasters. Commenters on the proposed rule noted that
beneficiaries in disaster areas may have required unplanned or
extensive healthcare services as a result of evacuation or other
emergency situations and stated that CJR participant hospitals should
not be held financially accountable for such spending that is beyond
their control. They suggested that CMS offer a waiver of the
participation requirement or another mechanism to ensure that hospitals
are not held accountable for circumstances beyond their control due to
natural disasters.
Because the recent disasters impacted CJR participant hospitals
during performance year 2 and will therefore flow into the payment
reconciliation calculations in March 2018, potentially having a
negative impact on providers unless an extreme and uncontrollable
events policy is established immediately, we believe it is in the
public interest to adopt these final policies. These policies will
provide relief to impacted CJR participant hospitals and ensure they do
not incur financial liability for costs outside their control. Without
the immediate establishment of a policy providing additional
flexibilities to CJR participant hospitals in extreme and
uncontrollable circumstances, we could inadvertently incentivize
patient care stinting as CJR participant hospitals contend with
evacuation costs or potential longer inpatient stays during disasters.
In particular, CJR hospitals may experience unintentional negative
incentives as compared to other, non-CJR hospitals because their actual
spending is compared to target prices, and they have downside risk
responsibility for excess spending beyond their target prices. Without
flexibilities provided, CJR hospitals in disaster areas may experience
financial strain which could incentivize behaviors that could
compromise the quality of care provided. Providing CJR participant
hospitals with additional concessions in extreme and uncontrollable
circumstances will strengthen beneficiary protections, which are
integral to the model's goal of improving care quality.
For the reasons discussed previously, we believe that it would be
contrary to the public interest to undergo notice-and-comment
procedures before finalizing the policies described for CJR participant
hospitals that have been affected by extreme and uncontrollable events
during performance year 2 of the model. Performance year 2 began on
January 1, 2017 and concludes on December 31, 2017. With this interim
final rule with comment period, it is our intention to reduce burden on
and protect CJR participant hospitals and beneficiaries impacted by
extreme and uncontrollable events. This extreme and uncontrollable
circumstances policy will take effective with the publication of this
final rule and interim final rule with comment and will be used during
the reconciliation process for performance year 2 episodes that will
occur beginning in March of 2018. We believe that an interim final rule
with comment period minimizes hospitals' financial burden and avoids
patient harm due to extenuating circumstances, efforts which would
otherwise be protracted and become effective after the conclusion of
performance year 2 if done through the notice-and-comment rulemaking
process. Therefore, we find good cause to waive the notice of proposed
rulemaking as provided under section 1871(b)(2)(C) of the Act and
section 553(b)(B) of the APA and to issue this interim final rule with
an opportunity for public comment. We are providing a 60-day public
comment period as specified in the DATES section of this document.
E. Collection of Information Requirements Related to Extreme and
Uncontrollable Circumstances
As stated in section 1115A(d)(3) of the Act, Chapter 35 of title
44, United States Code, shall not apply to the testing and evaluation
of models under section 1115A of the Act. As a result, the information
collection requirements contained in this final rule and interim final
rule with comment period need not be reviewed by the Office of
Management and Budget. However, we have summarized the anticipated cost
burden associated with the information collection requirements in the
Regulatory Impact Analysis section of this final rule and interim final
rule with comment period.
F. Impacts Related to Extreme and Uncontrollable Circumstances
In order to estimate the impacts resulting from this interim final
rule with comment period, we utilized 2016 CJR episode level data to
approximate the impact to projected CJR model savings resulting from
the extreme and uncontrollable circumstance policy we are implementing
in this interim final rule with comment period. Specifically, we first
identified the CJR participant hospitals located in Alabama,
California, Florida, Georgia, South Carolina, Mississippi, Texas and
Louisiana (those states for which 1135 waivers were issued) that were
also located in the counties listed in section III.A. of this interim
final rule with comment period and listed on www.FEMA.gov/disasters as
having a major disaster declaration. To approximate the date of the
emergency, we used the date of the disasters as listed on the FEMA Web
site from 2017 (resetting the year to 2016 to align with the claim
dates of service) and selected all CJR episodes for these providers
that initiated in the month preceding (that is, 30 days prior) the date
of the disaster. Date of disaster declaration dates were matched to the
CJR participant hospitals based on the hospitals' state addresses.
For non-fracture episodes, we capped the actual episode payment at
the target price determined for that episode if the date of admission
to the anchor hospitalization is on or within 30 days before the date
that the emergency period (as defined in section 1135(g) of the Act)
begins. For fracture episodes, we capped the actual episode payment at
the target price determined for that episode if the date of admission
to the anchor hospitalization that is on or within 30 days before or
after the date that the emergency period (as defined in section 1135(g)
of the Act) begins. Our analyses indicate that the impact of capping
the actual episode payments at the episode target prices based on the
2017 extreme and uncontrollable events policy could result in a
decrease to the CJR model estimated savings ranging between $1.5 to
$5.0 million for performance year 2. We note that the projected impact
was mitigated by the 5 percent stop-loss/stop-gain levels applicable to
performance year 2 and add that if these disasters had occurred in a
future performance year with higher stop-loss/stop-gain levels then we
would expect the projected impact to increase. These savings estimates
do not assume any change in spending or volume due to these extreme and
uncontrollable circumstances, neither before nor after the date of the
disaster as listed on the FEMA Web site.
We utilized 2016 CJR model episode data assuming that it presented
the best available proxy for estimating impacts to projected CJR model
savings resulting from 2017 disasters. We modeled impact to savings
projections using 2016 data during the same months in which
[[Page 57097]]
the 2017 disasters occurred, for hospitals impacted by the disasters.
We note that due to lack of available actual claims data due to timing,
we could not utilize actual 2017 performance data to estimate impacts
from this interim final rule with comment period.
Our estimates resulted from modeling which utilized all CJR model
episode data for impacted hospitals in Alabama, Georgia, South
Carolina, Louisiana, and California for the month of October, 2016 and
CJR model fracture episodes only for impacted hospitals in Alabama,
Georgia, South Carolina, Louisiana, and California for the month of
November, 2016. We also utilized all CJR episode data for impacted
hospitals in Texas and Florida during the month of September, 2016 and
CJR model fracture episodes only for impacted hospitals in Texas and
Florida for the month of October 2016. To model estimated impacts to
savings projections resulting from this interim final rule with comment
period, we recalculated NPRA based on the aforementioned policies.
While we acknowledge that our estimates related to impacts
resulting from this interim final rule with comment period may under-
or over-estimate actual impacts resulting from the policies, we believe
our assumptions are well-aligned with our other impact projections in
this final rule and appropriately reflect our estimates of the impacts
resulting from these policies.
IV. Collection of Information Requirements
As stated in section 1115A(d)(3) of the Act, Chapter 35 of title
44, United States Code, shall not apply to the testing and evaluation
of models under section 1115A of the Act. As a result, the information
collection requirements contained in this final rule and interim final
rule with comment period need not be reviewed by the Office of
Management and Budget. However, we have summarized the anticipated cost
burden associated with the information collection requirements in the
Regulatory Impact Analysis section of this final rule and interim final
rule with comment period.
V. Regulatory Impact Analysis
A. Introduction
We have examined the impacts of this final rule and interim final
rule with comment period as required by Executive Order 12866 on
Regulatory Planning and Review (September 30, 1993), Executive Order
13563 on Improving Regulation and Regulatory Review (January 18, 2011),
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-
354), section 1102(b) of the Social Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999) and the
Congressional Review Act (5 U.S.C. 804(2)), and Executive Order 13771
on Reducing Regulation and Controlling Regulatory Costs (January 30,
2017).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This final rule cancels the EPMs and the CR Incentive Payment Model in
advance of their start date and revises the design of the CJR model;
these provisions impact a subset of hospitals under the IPPS.
Therefore, it would have a relatively small economic impact; as a
result, this final rule does not reach the $100 million threshold and
thus is neither an ``economically significant'' rule under E.O. 12866,
nor a ``major rule'' under the Congressional Review Act.
B. Statement of Need
As discussed previously, review and reevaluation of policies and
programs, as well as revised rulemaking, are within an agency's
discretion, especially after a change in administration occurs. After
review and reevaluation of the CJR model final rule, the EPM final rule
and the public comments we received in response to the March 21, 2017
IFC, in addition to other considerations, we have determined that it is
necessary to rescind the regulations at 42 CFR part 512 and to reduce
the scope of the CJR model for the following reasons. We believe that
reducing the number of hospitals required to participate in the CJR
model will allow us to continue to evaluate the effects of such a model
while limiting the geographic reach of our current mandatory models.
Additionally, we believe that canceling the EPMs and CR Incentive
Payment Model, as well as altering the scope of the CJR model, offers
CMS maximum flexibility to design alternative episode-based models and
make potential improvements to these models as suggested by
stakeholders, while still allowing us to test and evaluate the impact
of the CJR model on the quality of care and expenditures.
This final rule and interim final rule with comment period is also
necessary to improve the CJR model for performance years 3, 4, and 5.
We are implementing a few technical refinements and clarifications for
certain payment, reconciliation and quality provisions, and changing
the criteria for the Affiliated Practitioner List to broaden the CJR
Advanced APM track to additional eligible clinicians. We believe these
refinements will address operational issues identified since the start
of the CJR model.
C. Anticipated Effects
In section III. of this final rule and interim final rule with
comment period, we discuss the policies we are finalizing to amend the
regulations governing the CJR model. We present the following estimated
overall impact of the proposed changes to the CJR model. Table 6
summarizes the estimated impact for the CJR model for the last 3 years
of the model. The modeling methodology for provider performance and
participation is consistent with the methodology used in modeling the
CJR impacts in the EPM final rule (82 FR 596). However, we updated our
analysis to include an opt-in option for hospitals in 33 of the 67 MSAs
selected for participation in the CJR model (all but 4 of these MSAs
are from the lower cost groups), while maintaining mandatory
participation for the remaining 34 MSAs (all of which are from the
higher cost groups), and allowing for the exclusion of low-volume and
rural hospitals in these 34 MSAs from mandatory participation and
allowing them to choose voluntary participation (opt-in).
We note that we updated the list of excluded rural hospitals
between the proposed and final rules as we did not have a complete set
of rural hospitals; this final rule now includes in the analysis
approximately 23 additional rural hospitals that we anticipate will not
opt-in to the CJR model in this final rule. We expect the number of
mandatory participating hospitals from year 3 forward to decrease from
approximately 700, which is approximately the number of current CJR
participant hospitals, to approximately 370. We assumed that if a
hospital would exceed its target pricing such that it would incur an
obligation of repayment to CMS of 3 percent or more in a given year,
that hospital would not elect voluntary participation in the model for
the final 3 performance years.
We assumed no low-volume hospitals would participate, noting that
including
[[Page 57098]]
them in impacts would not have any noticeable effects due to their low
claims volume. For purposes of identifying CJR rural hospitals for this
impact, we used the 2018 IPPS Sec. 412.103 rural reclassification list
and checked the addresses of record for the CJR hospitals to identify
any located within the rural RUCA census tracts. The likelihood of
voluntary participation linearly increases based on an upper bound of 3
percent bonus, but the modeling assumed that 25 percent of hospitals in
the voluntary MSAs would not consider participation so that the
likelihood of participation for each hospital was capped at 75 percent;
we expected 60 to 80 hospitals to elect voluntary participation in the
model. We sought comment on our assumptions about the number of
hospitals that would elect voluntary participation in the CJR model.
Due to a lack of available data, we did not account for participant
investment in the impact analysis model we used for the proposed rule.
However, we noted that we would expect that those who choose to
voluntarily participate would have made investments in the CJR model
that enable them to perform well and that they would anticipate earning
positive reconciliation payments. For those hospitals choosing not to
voluntarily participate, we would expect that the cost of any
investments they may have made based on their participation in
performance years 1 and 2 of the CJR model would be outweighed by the
reconciliation payment obligations they would expect to incur if they
continued to participate.
The 60 to 80 participants we expect to continue participating in
the model through the voluntary election process are not included in
our previous estimate of 370 CJR participants in the mandatory MSAs.
Thus, in total we expected approximately 430 to 450 participants in the
CJR model for the final 3 performance years. The participation
parameters were chosen to reflect both the anticipated risk aversion of
hospitals, and an expectation that many participants do not remain in
an optional model or demonstration when there is an expectation that
the hospital would incur an obligation of repayment to CMS. These
assumptions reflected the experience with other models and
demonstrations. The value of 3 percent may be somewhat larger than the
level of repayment at which hospitals would opt-in, but the value was
chosen to allow for the uncertainty of expected claims. We noted that
the possibility of shifting episodes from CJR model participant
hospitals to low-volume or other non-participating hospitals exists and
that we did not include any assumptions of this potential behavior in
our financial impact modeling. We sought comment on our model
assumptions that shifting of episodes will not occur.
The calculations estimated that the CJR model would result in a net
Medicare program savings of approximately $189 million over the 3
remaining performance years (2018 through 2020). This represents a
reduction in savings of approximately $106 million from the estimated
net financial impacts of the CJR model in the EPM final rule (82 FR
603).
Our previous analyses of the CJR model did not explicitly model for
utilization changes, such as improvements in the efficiency of service
during episodes. However, these behavioral changes would have minimal
effect on the Medicare financial impacts. If the actual costs for an
episode are below the discounted bundled payment amount, then CMS
distributes the difference between these two amounts to the participant
hospital, up to a capped amount. Similarly, if actual costs for an
episode are above the discounted bundled payment amount, then the
participant hospital pays CMS the difference between these amounts, up
to a capped amount. Due to the uncertainty of estimating the impacts of
this model, actual results could be higher or lower than this estimate.
Table 6--Comparison of Initial Estimate of the Impact on the Medicare Program of the CJR Model With Revised
Estimates
[Figures are in $ millions, negative values represent savings]
----------------------------------------------------------------------------------------------------------------
Year 2018 2019 2020 Total
----------------------------------------------------------------------------------------------------------------
Initial CJR Estimate............................ -61 -109 -125 -294
Revised CJR Estimate............................ -35 -72 -82 -189
Change.......................................... 26 37 43 106
----------------------------------------------------------------------------------------------------------------
Note: The initial estimate included the changes to the CJR model finalized in the EPM final rule (82 FR 603).
The 2016 and 2017 initial estimate was not impacted by the proposed changes to the CJR model in the August 17,
2017 proposed rule (82 FR 39310 through 39333). The total column reflects 2018 through 2020. Totals do not
necessarily equal the sums of rounded components.
The revised impact of EPM and the CR Incentive Payment as a result
of ``Advancing Care Coordination Through Episode Payment Models (EPMs);
Cardiac Rehabilitation Incentive Payment Model; and Changes to the
Comprehensive Care for Joint Replacement Model'' published in the
January 3, 2017 Federal Register (82 FR 597), estimated an annual cost
of $32 million for 2018 and annual savings of $29 million, $36 million,
$52 million, and $119 million for years 2019-2022, respectively.
Additionally, assuming a zero percent growth in cardiac rehabilitation
resulting from the CR Incentive Payment Model (see 82 FR 604 for a
discussion of the original cardiac rehabilitation impact where we
estimated an impact range between a cost of $29 million to a savings of
$32 million over 2017 to 2024; we note we assumed a zero percent growth
rate for purposes of the accounting statement in the January 3, 2017
final rule and continue to do so here), we projected annual costs to
the Medicare program of $4.8 million, $6.7 million, $7.2 million, $7.6
million, $8.1 million for the years 2018 through 2022, respectively,
and projected neither costs nor savings for the years 2023 and 2024.
Table 7 summarizes the anticipate changes to the savings and cost
estimates resulting from the cancellation of the EPMs and CR Incentive
Payment model relative to the previously projected savings estimates.
Overall, the change to projected savings and costs resulting from the
cancellation of these models totals $170 million, reflecting a
reduction in savings for years 2018 through 2022 resulting from
cancelation of the EPMs and a reduction in costs for years 2018 through
2022 resulting from the cancelation of the CR Incentive Payment Model.
[[Page 57099]]
Table 7--Comparison of Iniitial Estimate of the Impact on the Medicare Program of the EPMS and CR Incentive Payment Model With Revised Estimates
[Figures are in $ millions, negative values represent savings]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 2018 2019 2020 2021 2022 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Previous EPM Estimate................................... $32 ($29) ($36) ($52) ($119) ($204)
Previous CR Incentive Payment Model Estimate............ 5 7 7 8 8 34
Total Initial Estimate.................................. 37 (22) (29) (45) (111) (170)
Revised Total Estimate.................................. 0 0 0 0 0 0
Change.................................................. (37) 22 29 45 111 170
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Totals do not necessarily equal the sums of rounded components.
Our analysis presented the cost and transfer payment effects of the
proposed rule to the best of our ability.
Comment: Several commenters questioned the validity of our proposed
estimated reduction in savings of $90 million throughout the remainder
of the model due to the proposed changes to the CJR model. The
commenter stated that the projected $90 million in reduced savings is
only part of the total savings that would result from continuing the
CJR model in its original, entirely mandatory, form. This commenter
stated that savings will increase due to the CJR model's increased
regional pricing component beginning in performance year 4.
Response: We thank the commenters for their input. We acknowledge
that our total savings estimates (which we note shifted from $90
million in the proposed rule to $108 million in this final rule and
interim final rule with comment period, with $106 million due to final
changes to the CJR model as (well as the exclusion of an additional 23
rural hospitals we did not account for in the proposed rule) and an
additional $2 million resulting from the impacts of this interim final
rule with comment) may prove imperfect. As with all rule and regulation
development, CMS utilized standard savings modeling methodology to
determine estimates of the effects from this rule. Our current modeling
reflects our proposal to alter the existing CJR model for the final
three performance years of 2018 through 2020.
Comment: A commenter asserted that the proposed voluntary model
structure would allow for ``cherry picking'' of CJR patients by
participating hospitals and create selection bias that may alter or
interfere with evaluation efforts.
Response: We appreciate the commenter's concern about the proposed
voluntary format. We note that the final policy will allow for a one-
time opt in for certain hospitals and that these hospitals will be
participants in the CJR model should they elect to proceed. Hospitals
that elect to voluntarily participate in CJR will be held to the same
standards, regulations and programmatic expectations as the hospitals
within the mandatory MSAs. Thus, we would not anticipate hospitals
electing voluntary participation in CJR to be any more or less likely
than hospitals within the mandatory MSAs to engage in concerning
behaviors such as care stinting or biased patient selection for
surgery. We appreciate the commenter's concern that the proposed model
design could impede evaluation efforts and refer readers to discussion
of the impact on the evaluation in section II.A of this final rule and
interim final rule with comment period.
D. Effects on Beneficiaries
We believe that the cancellation of the EPMs and CR Incentive
Payment Model will not affect beneficiaries' freedom of choice to
obtain healthcare services from any individual or organization
qualified to participate in the Medicare program, including hospitals
that are making care improvements within their communities. Although
these models seek to incentivize care redesign and collaboration
throughout the inpatient and post-acute care spectrum, the models have
not yet begun. As the current baseline assumes these models will become
effective on January 1, 2018, and that these models will incentivize
care improvements that will likely result in an increase in quality of
care for beneficiaries, we note that it is possible that the
cancellation of these models may cause hospitals that potentially made
improvements in care in anticipation of the start of these models to
delay or cease these investments, which may result in a reversal of any
recent quality improvements. However, we believe the concerns raised by
stakeholders and the lack of time to consider design improvements for
these models prior to the January 1, 2018 start date outweigh potential
reversal of any recent improvements in care potentially made by some
hospitals and warrant cancellation of these models at this time while
we engage with stakeholders to identify future tests for bundled
payments and incentivizing high value care.
We believe that the changes to the CJR model discussed in this
final rule and interim final rule with comment period, specifically
focusing the model on higher cost MSAs in which participation will
continue to be mandatory and allowing low-volume and rural hospitals
and all participant hospitals in lower cost MSAs to choose voluntary
participation, will maintain the potential benefits of the CJR model
for beneficiaries in many areas while providing a substantial number of
hospitals with increased flexibility to better focus on priority needs
of the beneficiaries they serve. Specifically, low-volume and rural
hospitals as well as other hospitals in the 33 voluntary participation
MSAs (which are relatively more efficient areas) may elect to
participate in the CJR model if they believe that doing so best meets
their organization's strategic priorities for serving the beneficiaries
in their community. Alternatively, if these hospitals do not believe
continued participation in the CJR model will benefit their
organizational goals and local patient care priorities, they may elect
not to opt-in for the remainder of the model. We believe that
beneficiaries in the service areas of the hospitals that will be
allowed to choose to participate in the CJR model may have an ongoing
benefit from the care redesign investments these hospitals have already
made during the first 2 years of the CJR model. Overall, we believe the
refinements to the CJR model implemented by this final rule and interim
final rule with comment period do not materially alter the potential
effects of the model on beneficiaries. However, we acknowledge the
possibility that the improved quality of care that was likely to have
occurred during performance years 1 and 2 of the CJR model may be
curtailed for beneficiaries that receive care at
[[Page 57100]]
hospitals that do not elect to continue participation in the CJR model.
Comment: A commenter expressed concern for the unintended
consequences on beneficiaries that result from implementation of
mandatory models. The commenter stated that a mandatory approach to
model implementation will force some hospitals to participate in a
model for which they are ill-prepared, potentially limiting
beneficiaries' access to care.
Response: We appreciate the commenter's concern about unintended
consequences resulting from the CJR model and as such, note that
beneficiary protection remains a very high priority as originally
specified in the CJR final rule. We will continue to diligently monitor
CJR model participant behavior for the potential for any adverse
outcomes resulting from model participation.
E. Effects on Small Rural Hospitals
The changes to the CJR model implemented by this final rule and
interim final rule with comment period do not substantially alter our
previous impacts of the impact on small, geographically rural hospitals
specified in either the EPM final rule (82 FR 606) or the CJR model
final rule (80 FR 73538) because we continue to believe that few
geographically rural hospitals will be included in the CJR model. In
addition, allowing all rural hospitals (as defined in Sec. 510.2) that
are not otherwise excluded the opportunity to elect to opt-in to the
CJR model instead of having a mandatory participation requirement may
further reduce the likelihood that rural hospitals will be included in
the model. We solicited public comment on our estimates and analysis of
the impact of our proposals on small rural hospitals.
Comment: We received no comments regarding the effects of these
policies on small rural hospitals.
F. Effects on Small Entities
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. We estimated that most hospitals and most
other providers and suppliers are small entities, either by virtue of
their nonprofit status or by qualifying as small businesses under the
Small Business Administration's size standards (revenues of less than
$7.5 to $38.5 million in any 1 year; NAIC Sector-62 series). States and
individuals are not included in the definition of a small entity. For
details, see the Small Business Administration's Web site at https://www.sba.gov/content/smallbusiness-size-standards.
For purposes of the RFA, we generally consider all hospitals and
other providers and suppliers to be small entities. We believe that the
provisions of this final rule and interim final rule with comment
period relating to acute care hospitals will have some effects on a
substantial number of other providers involved in these episodes of
care including surgeons and other physicians, skilled nursing
facilities, physical therapists, and other providers. Although we
acknowledge that many of the affected entities are small entities, and
the analysis discussed throughout this final rule and interim final
rule with comment period discusses aspects of episode payment models
that may or would affect them, we have no reason to assume that these
effects would reach the threshold level of 3 percent of revenues used
by HHS to identify what are likely to be ``significant'' impacts. We
assume that all or almost all of these entities will continue to serve
these patients, and to receive payments commensurate with their cost of
care. Hospitals currently experience frequent changes to payment (for
example, as both hospital affiliations and preferred provider networks
change) that may impact revenue, and we have no reason to assume that
this will change significantly under the changes implemented by this
final rule and interim final rule with comment period.
Accordingly, we have determined that this final rule and interim
final rule with comment period will not have a significant impact on a
substantial number of small entities. We solicited public comments on
our estimates and analysis of the impact of the proposed rule on those
small entities.
Comment: We did not receive comments regarding this section.
G. Effects of Information Collection
The changes implemented by this final rule and interim final rule
with comment period will have a minimal additional burden of
information collection for CJR model participant hospitals. The two
areas which this final rule and interim final rule with comment period
may increase participant burden include providing clinician engagement
lists and submitting opt-in documentation (for eligible hospitals who
choose to opt-in to the CJR model).
Clinician engagement list submission for the CJR model will require
that participants submit on a no more than quarterly basis a list of
physicians, non-physician practitioners, or therapists who are not a
CJR model collaborator during the period of the CJR model performance
year specified by CMS but who do have a contractual relationship with a
CJR model participant hospital based at least in part on supporting the
participant hospital's quality or cost goals under the CJR model during
the period of the performance year specified by CMS.
For hospitals eligible to opt-in to the CJR model that elect to
participate in the model, CMS intends to provide a template that can be
completed and submitted prior to the January 31, 2018 submission
deadline. As stated previously, we estimate that the number of
hospitals that will elect voluntary participation in CJR is 60 to 80.
As stated previously, this template would be designed to minimize
burden on participants, and the template will capture the information
required to effectively opt-in to the model. Using wage information
from the Bureau of Labor Statistics for medical and health service
managers (Code 11-9111), we assumed a rate of $105.16 per hour,
including overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm) and estimated that the time to complete the opt-in
template would be, on average, approximately 30 minutes per hospital.
Thus, total costs associated with completing opt-in templates for all
60 to 80 hospitals projected to elect voluntary participation is
expected to range between $3,150 (60 hospitals) and $4,200 (80
hospitals).
We sought comment on our assumptions and information on any costs
associated with this work.
Comment: Several commenters stated that the administrative burden
resulting from the clinician engagement list requirements, sharing
arrangement reporting and beneficiary notification mandates of the CJR
model is overwhelming. A commenter added that any reduction in burden
that can be achieved would be helpful to hospitals and would enable
patient-centered care. Another commenter stated that they have
significant concerns about hospitals' ability to maintain accurate
clinician engagement lists with start and end dates for each clinician.
The commenter noted that this would be particularly challenging for
hospitals in California, where they believe alignment with providers is
particularly complicated, thus making a list of this type burdensome to
maintain.
Response: We appreciate the commenters' concerns over the
administrative burden associated with the CJR model as well as the
burden
[[Page 57101]]
resulting from clinician engagement lists and the concern that
maintaining accurate lists will prove particularly difficult for some
providers. We acknowledge that the requirement of submitting clinician
engagement lists may be burdensome for providers. However, as discussed
in section III.F. of the proposed rule, we developed this requirement
in response to feedback from stakeholders who expressed a desire to
enhance opportunities for those physicians, non-physician
practitioners, and therapists without a financial arrangement under the
CJR model, but who are affiliated with and support the Advanced APM
Entity in its participation in the Advanced APM for purposes of the
Quality Payment Program.
H. Regulatory Review Costs
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule and
interim final rule with comment period, we should estimate the cost
associated with regulatory review. Due to the uncertainty involved with
accurately quantifying the number of entities that will review the
final rule and interim final rule with comment period, we assume that
the total number of unique commenters on the July 25, 2016 proposed
rule that proposed the EPMs and CR Incentive Payment Model will be the
number of reviewers of this final rule and interim final rule with
comment period. We received 85 unique comment submissions for this
final rule but maintain that the 175 comments received for the July 25,
2016 EPM and CR Incentive Payment Model proposed rule reflects a more
conservative estimate of the number of organizations which invested
resources in review of this final rule, regardless of whether or not
the organization elected to formally submit comments. We acknowledge
that this assumption may understate or overstate the costs of reviewing
this final rule and interim final rule with comment period. It is
possible that not all commenters reviewed the precedent rule in detail,
and it is also possible that some reviewers chose not to comment on the
proposed rule. For these reasons we believe that the number of past
commenters on the EPM proposed rule would be a fair estimate of the
number of reviewers of this rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of the proposed rule.
However, for the purposes of our estimate we assume that each reviewer
reads approximately 100 percent of the rule.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $105.16 per hour, including overhead and fringe benefits
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average
reading speed, we estimate that it would take approximately 1.6 hours
for the staff to review the proposed rule. For each entity that reviews
the rule, the estimated cost is $168.26 (1.6 hours x $105.16).
Therefore, we estimate that the total cost of reviewing this regulation
is $29,445 ($105.16 x 175 reviewers).
I. Unfunded Mandates
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2017, that
is approximately $148 million. This final rule and interim final rule
with comment period does not include any mandate that would result in
spending by state, U.S. territories, local or tribal governments, in
the aggregate, or by the private sector in the amount of $148 million
in any 1 year.
J. Federalism
We do not believe that there is anything in this final rule and
interim final rule with comment period that either explicitly or
implicitly preempts any state law, and furthermore we do not believe
that this final rule and interim final rule with comment period will
have a substantial direct effect on state or local governments, preempt
state law, or otherwise have a federalism implication.
K. Reducing Regulation and Controlling Regulatory Costs
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs (82 FR 9339), was issued on January 30, 2017. This
final rule and interim final rule with comment period is not expected
to be subject to the requirements of E.O. 13771 because it is estimated
to result in no more than de minimis costs.
L. Alternatives Considered
Throughout this final rule and interim final rule with comment
period, we have identified our policies and alternatives that we have
considered, and provided information as to the effects of these
alternatives and the rationale for each of the policies. We considered
but did not propose to allow voluntary participation in all of the 67
selected MSAs in the CJR model because the overall estimated CJR model
impact would no longer show savings, and would likely result in costs.
An entirely voluntary CJR model would likely result in costs due to the
assumption that, in aggregate, hospitals that expect to receive a
positive reconciliation payment from Medicare would elect to opt-in to
the model while hospitals that expect to owe Medicare a reconciliation
amount would not likely elect to participate in the model. We also
considered but did not propose limiting participation to the proposed
34 mandatory participation MSAs and not allowing voluntary
participation in any of the 67 selected MSAs. In the August 17, 2017
proposed rule, we noted that if participation was limited to the
proposed 34 mandatory participation MSAs and voluntary participation
was not allowed in any MSA, the impact to the overall estimated model
savings over the last 3 years of the model would be closer to $30
million than the $90 million estimate presented in section V. of the
proposed rule (82 FR 39327 through 39331), because our modeling did not
include assumptions about behavioral changes that might lower fee-for-
service spending. Since our impact model estimated that 60 to 80
hospitals would choose voluntary participation and that these potential
voluntary participants would be expected to earn only positive
reconciliation payments under the model, these positive payments to the
voluntary participants would offset some of the savings garnered from
mandatory participants. However, we did propose to allow voluntary
participation in the proposed 33 voluntary participation MSAs and for
low-volume and rural hospitals to permit hospitals that have made
investments in care redesign and commitments to improvement to continue
to participate in the model for the remaining 3 years. We stated that
we believed our proposal would benefit a greater number of
beneficiaries because a greater number of hospitals would be included
in the CJR model.
Instead of proposing to cancel the EPMs and CR Incentive Payment
Model, we considered altering the design of these models to allow for
voluntary participation but as this would potentially involve
restructuring the model design, payment methodologies, financial
arrangement provisions and/or quality measures, we did not believe that
such alterations would offer providers enough time to prepare for such
changes, given the planned
[[Page 57102]]
January 1, 2018 start date. In addition, if at a later date we decided
to offer these models, or similar models we would not expect to
implement them through rulemaking if done on a voluntary basis, but
rather would establish them consistent with the manner in which we have
implemented other voluntary models.
We solicited and welcomed comments on our proposals, on the
alternatives we identified, and on other alternatives that we should
consider, as well as on the costs, benefits, or other effects of these.
We did not receive any comments regarding this section.
M. Accounting Statement and Table
As required by OMB Circular A-4 under Executive Order 12866
(available at https://www.whitehouse.gov/omb/circulars_a004_a-4) in
Table 8, we have prepared an accounting statement showing the
classification of transfers associated with the provisions in this
final rule and interim final rule with comment period. The accounting
statement is based on estimates provided in this regulatory impact
analysis. As described in Table 6, we estimate the changes to the CJR
model will continue to result in savings to the federal government of
approximately $189 million over the 3 remaining performance years of
the model from 2018 to 2020, noting these changes do reduce the
original CJR estimated savings by approximately $106 million. As
described in section F of the interim final rule with comment in this
rule, we anticipate an additional cost due to currently known events
between $1.5 and $5 million from the extreme and uncontrollable events
policy we are establishing in this interim final rule with comment. We
project $2.0 million as a point-estimate for one-time cost associated
with the extreme and uncontrollable events policy during performance
year 2. The impact over subsequent years will depend on the number of
events in CJR regions and the stop-gain and stop-loss limits for that
year. In Table 8, the overall annualized change in payments (for all
provisions in this final rule and interim final rule with comment
period relative to the CJR, EPM and CR models as originally finalized)
based on a 7-percent and 3-percent discount rate, results in net
federal monetary transfer from the federal government to participant
IPPS hospitals of $199.3 million and $239.1 million in 2017 dollars,
respectively, over the period of 2018 to 2022. Both of these estimates
of the net transfer would increase by $2 million for the one-time cost
of the 2017 disaster declarations.
Table 8--Accounting Statement Changes to Comprehensive Care for Joint Replacement Model and Cancellation of
Episode Payment Models and CR Incentive Payment Model for Performance Years 2018 to 2022 and CJR Extreme and
Uncontrollable Circumstances Policy 2017
----------------------------------------------------------------------------------------------------------------
Units
------------------------------------------------------------------
Category Estimates Discount rate
Year dollar (%) Period covered
----------------------------------------------------------------------------------------------------------------
Costs: *
Upfront cost of 0.03 2017 7 -2018 upfront cost.
regulation ($million).
----------------------------------------------------------------------------------
0.03 2017 3 -2018 upfront cost.
----------------------------------------------------------------------------------------------------------------
From Whom to Whom............ Incurred by IPPS Hospitals as a result of this final rule.
----------------------------------------------------------------------------------------------------------------
Impact of Disaster
Declaration in 2017:
One-time cost of Disaster 2 2017 7 -2017 one-time cost.
Declaration.
2 2017 3 -2017 one-time cost.
----------------------------------------------------------------------------------
From Whom to Whom............ From the Federal Government to 2017 disaster declaration hospitals.
----------------------------------------------------------------------------------------------------------------
Transfers:
Annualized/Monetized 48.6 2017 7 2018-2022.
($million/year).
52.2 2017 3 2018-2022.
----------------------------------------------------------------------------------
From Whom To Whom............ From the Federal Government to Participating IPPS Hospitals.
----------------------------------------------------------------------------------------------------------------
* The cost includes the regulatory familiarization and completing opt-in templates for up to 80 hospitals to
join the CJR model.
N. Conclusion
This analysis, together with the remainder of this preamble,
provides the Regulatory Impact Analysis of a rule. As a result of this
final rule and interim final rule with comment period, we estimate that
the financial impact of the changes to the CJR model will result in a
reduction to previously estimated savings by $106 million over the 3
remaining performance years (2018 through 2020) and a financial impact
of $2 million reduction in savings estimates for the one-time cost
resulting from the impacts of disaster declaration in 2017 although we
note that the CJR model will still be estimated to save the Medicare
program approximately $189 million over the remaining 3 performance
years. We note that the projected $170 million savings we had estimated
that the EPMs and CR Incentive Payment Model would generate for the
Medicare program will not be realized as this final rule and interim
final rule with comment is cancelling those models.
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 510
Administrative practice and procedure, Health facilities, Health
professions, Medicare, Reporting and recordkeeping requirements.
42 CFR Part 512
Administrative practice and procedure, Health facilities, Health
professions, Medicare, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, under the authority at
section 1115A of the Social Security Act, the Centers for Medicare &
Medicaid
[[Page 57103]]
Services amends 42 CFR chapter IV, as set forth below.
PART 510--COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL
0
1. The authority citation for part 510 continues to read as follows:
Authority: Secs. 1102, 1115A, and 1871 of the Social Security
Act (42 U.S.C. 1302, 1315(a), and 1395hh).
0
2. Section 510.2 is amended by--
0
a. Revising the definition of ``Actual episode payment'';
0
b. Adding, in alphabetical order, definitions of ``Low-volume
hospital'' and ``Mandatory MSA''.
0
c. Revising the definition of ``Participant hospital''; and
0
d. Adding the definition of ``Voluntary MSA''.
The revisions and additions read as follows:
Sec. 510.2 Definitions.
* * * * *
Actual episode payment means the sum of standardized Medicare
claims payments for the items and services that are included in the
episode in accordance with Sec. 510.200(b), excluding the items and
services described in Sec. 510.200(d).
* * * * *
Low-volume hospital means a hospital identified by CMS as having
fewer than 20 LEJR episodes in total across the 3 historical years of
data used to calculate the performance year 1 CJR episode target
prices.
* * * * *
Mandatory MSA means an MSA designated by CMS as a mandatory
participation MSA in accordance with Sec. 510.105(a).
* * * * *
Participant hospital means one of the following:
(1) During performance years 1 and 2 of the CJR model and the
period from January 1, 2018 to January 31, 2018 of performance year 3,
a hospital (other than a hospital excepted under Sec. 510.100(b)) with
a CCN primary address located in one of the geographic areas selected
for participation in the CJR model in accordance with Sec. 510.105.
(2) Beginning February 1, 2018, a hospital (other than a hospital
excepted under Sec. 510.100(b)) that is one of the following:
(i) A hospital with a CCN primary address located in a mandatory
MSA as of February 1, 2018 that is not a rural hospital or a low-volume
hospital on that date.
(ii) A hospital that is a rural hospital or low-volume hospital
with a CCN primary address located in a mandatory MSA that makes an
election to participate in the CJR model in accordance with Sec.
510.115.
(iii) A hospital with a CCN primary address located in a voluntary
MSA that makes an election to participate in the CJR model in
accordance with Sec. 510.115.
* * * * *
Voluntary MSA means an MSA designated by CMS as a voluntary
participation MSA in accordance with Sec. 510.105(a).
0
3. Section 510.105 is amended by revising paragraph (a) to read as
follows:
Sec. 510.105 Geographic areas.
(a) General. The geographic areas for inclusion in the CJR model
are obtained based on a stratified random sampling of certain MSAs in
the United States.
(1) All counties within each of the selected MSAs are selected for
inclusion in the CJR model.
(2) Beginning with performance year 3, the selected MSAs are
designated as either mandatory participation MSAs or voluntary
participation MSAs.
* * * * *
0
4. Section 510.115 is added to read as follows:
Sec. 510.115 Voluntary participation election.
(a) General. To continue participation in performance year 3 and
participate in performance year 4 and performance year 5, the following
hospitals must submit a written participation election letter as
described in paragraph (c) of this section during the voluntary
participation election period specified in paragraph (b) of this
section:
(1) Hospitals (other than those excluded under Sec. 510.100(b))
with a CCN primary address in a voluntary MSA.
(2) Low-volume hospitals with a CCN primary address in a mandatory
MSA.
(3) Rural hospitals with a CCN primary address in a mandatory MSA.
(b) Voluntary participation election period. The voluntary
participation election period begins on January 1, 2018 and ends on
January 31, 2018.
(c) Voluntary participation election letter. The voluntary
participation election letter serves as the model participation
agreement. CMS accepts the voluntary participation election letter if
the letter meets all of the following criteria:
(1) Includes the following:
(i) Hospital name.
(ii) Hospital address.
(iii) Hospital CCN.
(iv) Hospital contact name, telephone number, and email address.
(v) Model name (that is, CJR model).
(2) Includes a certification that the hospital will--
(i) Comply with all applicable requirements of this part and all
other laws and regulations applicable to its participation in the CJR
model; and
(ii) Submit data or information to CMS that is accurate, complete
and truthful, including, but not limited to, the participation election
letter and any quality data or other information that CMS uses in its
reconciliation processes.
(3) Is signed by the hospital administrator, CFO or CEO.
(4) Is submitted in the form and manner specified by CMS.
0
5. Section 510.120 is amended by removing paragraph (b)(4), revising
paragraph (c), and adding paragraphs (d) and (e) to read as follows:
Sec. 510.120 CJR participant hospital CEHRT track requirements.
* * * * *
(c) Clinician engagement list. Each participant hospital that
chooses CEHRT use as provided in paragraph (a)(1) of this section must
submit to CMS a clinician engagement list in a form and manner
specified by CMS on a no more than quarterly basis. This list must
include the following information on individuals for the period of the
performance year specified by CMS:
(1) For each physician, nonphysician practitioner, or therapist who
is not a CJR collaborator during the period of the CJR model
performance year specified by CMS but who does have a contractual
relationship with the participant hospital based at least in part on
supporting the participant hospital's quality or cost goals under the
CJR model during the period of the performance year specified by CMS:
(i) The name, TIN, and NPI of the individual.
(ii) The start date and, if applicable, the end date for the
contractual relationship between the individual and participant
hospital.
(2) [Reserved]
(d) Attestation to no individuals. If there are no individuals that
meet the requirements to be reported, as specified in paragraphs (b)(1)
through (3) or paragraph (c) of this section, the participant hospital
must attest in a form and manner required by CMS that there are no
individuals to report.
(e) Documentation requirements. (1) Each participant hospital that
chooses CEHRT use as provided in paragraph (a)(1) of this section must
maintain documentation of their attestation to CEHRT use, clinician
financial
[[Page 57104]]
arrangements lists, and clinician engagement lists.
(2) The participant hospital must retain and provide access to the
required documentation in accordance with Sec. 510.110.
0
6. Section 510.210 is amended by revising paragraph (b) to read as
follows:
Sec. 510.210 Determination of the episode.
* * * * *
(b) Cancellation of an episode. The episode is canceled and is not
included in the determination of NPRA as specified in Sec. 510.305 if
any of the following occur:
(1) The beneficiary does any of the following during the episode:
(i) Ceases to meet any criterion listed in Sec. 510.205.
(ii) Is readmitted to any participant hospital for another anchor
hospitalization.
(iii) Initiates an LEJR episode under BPCI.
(iv) Dies.
(2) For performance year 3, the participant hospital did not submit
a participation election letter that was accepted by CMS to continue
participation in the model.
0
7. Section 510.300 is amended by revising paragraphs (b)(6) to read as
follows:
Sec. 510.300 Determination of quality-adjusted episode target
prices.
* * * * *
(b) * * *
(6) Exclusion of incentive programs and add-on payments under
existing Medicare payment systems. Certain incentive programs and add-
on payments are excluded from historical episode payments by using,
with certain modifications, the CMS Price (Payment) Standardization
Detailed Methodology used for the Medicare spending per beneficiary
measure in the Hospital Value-Based Purchasing Program.
* * * * *
0
8. Section 510.305 is amended by revising paragraphs (d)(1) and
(e)(1)(i) and adding paragraph (k) to read as follows:
Sec. 510.305 Determination of the NPRA and reconciliation process.
* * * * *
(d) * * *
(1) Beginning 2 months after the end of each performance year, CMS
does all of the following:
(i) Performs a reconciliation calculation to establish an NPRA for
each participant hospital.
(ii) For participant hospitals that experience a reorganization
event in which one or more hospitals reorganize under the CCN of a
participant hospital performs--
(A) Separate reconciliation calculations (during both initial and
subsequent reconciliations for a performance year) for each predecessor
participant hospital for episodes where anchor hospitalization
admission occurred before the effective date of the reorganization
event; and
(B) Reconciliation calculations (during both initial and subsequent
reconciliations for a performance year) for each new or surviving
participant hospital for episodes where the anchor hospitalization
admission occurred on or after the effective date of the reorganization
event.
* * * * *
(e) * * *
(1) * * *
(i) Determines actual episode payments for each episode included in
the performance year (other than episodes that have been canceled in
accordance with Sec. 510.210(b)) using claims data that is available 2
months after the end of the performance year. Actual episode payments
are capped at the amount determined in accordance with Sec.
510.300(b)(5) for the performance year or the amount determined in
paragraph (k) of this section for episodes affected by extreme and
uncontrollable circumstances.
* * * * *
(k) Extreme and uncontrollable circumstances adjustment. (1) The
episode spending adjustments specified in paragraph (k)(2) of this
section apply for a participant hospital that has a CCN primary address
that meets both of the following:
(i) Is located in an emergency area during an emergency period, as
those terms are defined in section 1135(g) of the Act, for which the
Secretary has issued a waiver under section 1135; and
(ii) Is located in a county, parish, or tribal government
designated in a major disaster declaration under the Stafford Act.
(2)(i) For a non-fracture episode with a date of admission to the
anchor hospitalization that is on or within 30 days before the date
that the emergency period (as defined in section 1135(g) of the Act)
begins, actual episode payments are capped at the target price
determined for that episode under Sec. 510.300.
(ii) For a fracture episode with a date of admission to the anchor
hospitalization that is on or within 30 days before or after the date
that the emergency period (as defined in section 1135(g) of the Act)
begins, actual episode payments are capped at the target price
determined for that episode under Sec. 510.300.
0
9. Section 510.410 is amended by adding paragraph (b)(1)(i)(G) to read
as follows:
Sec. 510.410 Compliance enforcement.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(G) Failing to participate in CJR model-related evaluation
activities conducted by CMS or its contractors or both.
* * * * ** * *
0
10. Section 510.605 is amended by revising paragraph (c)(2) to read as
follows:
Sec. 510.605 Waiver of certain telehealth requirements.
* * * * *
(c) * * *
(2) CMS waives the payment requirements under section 1834(m)(2)(B)
of the Act to allow the distant site payment for telehealth home visit
HCPCS codes unique to this model.
* * * * *
PART 512--[Removed and Reserved]
0
11. Part 512 is removed and reserved.
Dated: November 22, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: November 28, 2017.
Eric D. Hargan,
Acting Secretary, Department of Health and Human Services.
[FR Doc. 2017-25979 Filed 11-30-17; 8:45 am]
BILLING CODE 4120-01-P