The Coming Change …

Did you know?

How the government pays healthcare providers is changing. On the horizon is an increased emphasis on making hospitals and health systems more accountable for patients’ entire continuum of care.

One example … In early 2016, the Centers for Medicare & Medicaid Services (CMS) announced details of a new payment model for hip and knee replacements (i.e., also called lower extremity joint replacements or LEJR) called the Comprehensive Care for Joint Replacement model (CJR). LEJRs are surgical procedures CMS targeted because of their high frequency in the elderly, inpatient stay requirement, and cost (CMS paid out $7+ billion for 400,000 such procedures performed in 2014!).

The proposed reimbursement model is being piloted at 800 hospitals and is designed to hold the facility more accountable for the cost, quality, and outcome of these joint replacements, beginning on the day of the operation and extending through 90 days of rehabilitation. Unlike traditional fee-for-service reimbursements, the hospital will instead receive a pre-determined bundled amount for the entire period of care.

At the end of the year, there will be an eventual reconciliation to actual spending by CMS. And depending upon the findings with respect to quality/outcome of care and the hospital’s actual cost, the hospital could receive additional payments from CMS. Or, it may be asked to pay back a portion of the original reimbursement.

With this shift in accountability, it would seem to behoove hospitals and health systems to work more closely with the follow-up care providers (inpatient rehabilitation facilities and nursing homes, for example). They’ll want to maximize patients’ therapeutic results while minimizing their length of stay.

Because it is the cost of those post-hospital settings which account for the majority of the cost variation for the global care of knee and hip replacements, health systems have a significant financial stake in their patients’ choice of post-hospital facility. Yet, an estimated 60% of health systems are at risk of being penalized based on their current cost performance. And more than half of hospital providers feel unprepared for this global payment model.

How can health systems meet the demands of the new payment model and still maximize financial health?

About Janus Choice

Janus Choice facilitates informed healthcare transitions between different care settings. With a proven history, we offer an interactive, mobile, and easy-to-use platform for matching patients with the best post-acute care providers. Janus Choice increases top-line revenue for health systems and increases integration of patients that require post-acute care. Request a demo today at [email protected]


Sources:

1. CMS. Comprehensive Care for Joint Replacement Model. https://innovation.cms.gov/initiatives/cjr. March 2016.

2. Ibid.

3. Ibid.

4. Ibid.

5. Avalere. Sixty Percent of Hospitals Must Reduce Costs for Joint Replacement Under New Medicare Demo or Face Penalties.

http://avalere.com/expertise/managed-care/insights/sixty-percent-of-hospitals-must-reduce-costs-for-joint-replacement-under-ne. April 2016.

6. Health Leaders Media. Majority of Hospitals Eye Losses in CJR. http://www.healthleadersmedia.com/finance/majority-hospitals-eye-losses-cjr?page=0%2C1#. April 2016.