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Like it or not, the Centers for Medicare & Medicaid Services (CMS) is expanding its strong commitment to focus on quality and care improvement as the basis for payment throughout the continuum of care. The final rule for the Comprehensive Care for Joint Replacement (CJR) model published by CMS in November, 2015 is now effective, with the April 1, 2016 mandatory participation date for Home Health Agencies (HHAs) fast approaching. In addition, CMS’s proposed rule to revise the discharge planning conditions of participation (CoPs) for HHAs, provide opportunities that HHAs should be tracking closely.

CJR Final Rule

Under the CJR model, mandatory participation will impact 67 geographic areas across the country, including four in North Carolina (Asheville, Charlotte-Concord-Gastonia, Durham-Chapel Hill, and Greenville). Participant hospitals will be held financially accountable for the quality and cost of care provided to Medicare fee-for-service beneficiaries for lower-extremity joint replacement procedures and recovery, including all hip and knee replacement surgeries, for the 90-day period following hospital discharge (episode). HHA services that occur within the episode are covered by this rule, so HHAs that do, or could, receive patient referrals from participant hospitals will be directly impacted.

Participant hospitals will be seeking to enter into financial arrangements in the form of collaborator agreements and/or sharing arrangements with HHAs and other post-acute care providers (PAC) to help increase the quality of care and achieve reductions in the cost of care. These agreements will be related to gainsharing payments for CJR in which a hospital may share savings with collaborators. In addition, these agreements may also require the collaborator to share financially in any downside risk with the hospital for providing care in this model. All of these payments align with CMS’s shift in focus to incentivize hospitals and PAC providers, including HHAs, to work collaboratively to achieve the goal of improving the quality of care provided to patients in all settings throughout the continuum of care.

Lower-extremity joint replacements are the most commonly performed Medicare inpatient surgery, with predictions showing continued growth in utilization. The quality and cost of care for an inpatient stay that results in a Diagnostic-Related Group (DRG) of 469 or 470, along with all related care provided during the episode, will be measured and adjusted using a retroactive bundled payment. The payment model and phases of the CJR model will extend for five performance years, concluding on December 31, 2020.

As part of the CJR final rule, CMS implemented certain target pricing on the DRGs affected, a weighted methodology for quality and patient satisfaction in determining incentive payments, and stop-loss and stop-gain limits to protect both hospitals and CMS. Waivers for certain fraud and abuse authorities were issued jointly by CMS and the United States Department of Health and Human Services (HHS) Office of Inspector General (OIG) concurrently with the CJR final rule. Those waivers, which include waivers for specified arrangements involving CJR model participants, can be found on the CMS website.

Discharge Planning Requirements

With the discharge planning CoPs proposed rule issued by CMS on November 3, 2015, CMS continued its focus on improving health outcomes and reducing health care costs by decreasing patient complications and avoidable hospital readmissions with more robust discharge planning requirements. Consistent with the CJR final rule summarized above, CMS intends for the new requirements to increase communication between providers, patients, and families/caregivers in the discharge planning process by incorporating patient goals and utilizing quality and resource-use data to help patients select their PAC provider. The proposed CoPs rule at 42 C.F.R. ยง484.58 specifies seven requirements in the discharge planning process for HHAs.

These particular rules, along with other ongoing CMS payment initiatives should put HHAs on alert that CMS is determined to utilize quality and resource-use data to improve health outcomes and reduce health care costs, while expanding program rules and opportunities to all PAC settings. HHA leadership and experienced legal counsel should closely review all related policies, procedures, agency practices to ensure full, continued compliance, as well as address the contracting needs for all collaboration and sharing arrangements, whether mandatory or not.

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