United States: Managing The Transition To Transformation: Implementing A CJR Collaborator Agreement

Summary

McDermott’s Managing the Transition to Transformation series is designed to help health systems and other health care industry leaders address the many challenges presented by the transformation in payment and care delivery models. The goal of this series is to help organizations prepare so that they are not only competitive, but can also thrive under alternative payment models (APMs) and quality-based reimbursement models (QBRs). This article discusses issues to consider in implementing collaborator agreements under the Comprehensive Care for Joint Replacement Model. 

In Depth

Introduction

The Comprehensive Care for Joint Replacement Model (CJR Model or Model) is a five-year mandatory bundled payment program for certain lower extremity joint replacement (LEJR) services provided to traditional Medicare beneficiaries. The Centers for Medicare & Medicaid Services (CMS) issued its CJR final rule on November 24, 2015, and the CJR Model went into effect on April 1, 2016. Under the Model, CMS holds approximately 800 hospitals located in 67 designated metropolitan service areas (MSAs) financially accountable for the quality and cost of LEJR episodes of care. The Model is mandatory for every hospital paid under the inpatient prospective payment system in the selected MSAs unless the hospital qualifies for one of the limited exceptions. The MSAs were selected through stratified sampling that took into account a number of factors, including the number of LEJRs performed in the MSA. A more complete description of the CJR Model can be found here.

Unlike the Bundled Payment for Care Improvement (BPCI) Program, hospitals are the only entities directly responsible to CMS for the quality and cost of a CJR bundle. However, in an effort to incentivize coordination amongst providers who participate in the CJR episodes, the Model allows hospitals to develop financial arrangements with eligible “collaborators” to share upside savings and/or downside losses generated during such episodes.

A hospital’s ability to succeed under the CJR Model will depend on its ability to coordinate care amongst the range of providers providing care during a CJR episode. Collaborator agreements can be a powerful tool in aligning these providers’ incentives with the hospitals under the CJR Model, but there are a number of operational and documentation standards imposed under the Model requirements. Hospitals therefore need to develop a game plan to both identify key providers for CJR episodes and implement collaborator agreements that appropriately incentivize such providers while adhering to CMS’s requirements.

Selecting Collaborators

Only the following provider types may be collaborators: Medicare-enrolled skilled nursing facilities, home health agencies, long-term care hospitals, inpatient rehabilitation facilities, physicians, non-physician practitioners, providers/suppliers of outpatient therapy services and physician group practices (PGPs). This list is exhaustive; for example, medical devices companies or non-provider entities such as data analytics companies may not act as collaborators. The latter exclusion is particularly noteworthy as a number of data analytics companies have participated as conveners in the BPCI Program and have been willing to assume downside risk from providers. An entity that is precluded from being a collaborator could still provide services to hospitals for CJR patients, but compensation to such a third-party could not be through a gainsharing relationship. If this limits the interest of experienced data analytics companies in assisting hospitals under the CJR program, this may hinder hospitals’ ability to achieve savings.

Before selecting collaborators, hospitals must adopt a written set of policies establishing quality of care criteria that potential collaborators must meet. Hospitals are not bound by particular guidelines regarding the quality of care selection criteria, which can take into account past performance and/or relate to a collaborator’s agreement to satisfy process or outcome metrics on a prospective basis. CMS has explained that certain hospitals may want to “adopt quality criteria that rely primarily on satisfaction of forward-looking requirements that the participant hospital expects to lead to improved quality of episode care, such as attending weekly care coordination meetings, contacting CJR beneficiaries frequently, or following specified clinical care pathways.”  CMS has the ability to review these selection criteria and has the authority to issue fines, penalties or require termination of collaborator agreements if hospitals do not adopt quality of care criteria or utilize any forward-looking criteria in conjunction with the collaborator agreements. Accordingly, it is important that these policies are adopted in advance of selecting collaborators and are adhered to during the selection process, and, ultimately, integrated into the collaborator agreements where the selection criteria take into account prospective performance.

Timing Considerations

Once potential collaborators are identified, hospitals must have a written collaborator agreement in place prior to any care being furnished that is considered for purposes of determining any payments to collaborators. CMS believes this is necessary to “discourage gaming.” This means that hospitals must plan ahead and have the required contractual documentation in place prior to bringing a provider into the CJR Model.

Compensation Methodology

The CJR Model permits hospitals to make “gainsharing payments,” comprised solely of reconciliation payments from CMS and/or internal cost savings, to collaborators. Collaborators may also agree to make “alignment payments” to the hospital in the event that the hospital must repay CMS. Hospitals have flexibility in developing the specific compensation methodology, but it must include a quality component and must adhere to caps on the total amount of gainsharing or alignment payments. To receive any gainsharing, the collaborator must meet the hospital’s quality of care criteria as integrated into the collaborator agreement for the applicable calendar year; this quality assessment must relate directly to CJR episodes of care (rather than the collaborator’s performance generally).

Total gainsharing payments from a hospital to all its collaborators are capped at the total amount of savings the hospital receives from CMS during the applicable calendar year. Thus, if a hospital does not generate any savings in the aggregate, then a collaborator would not be eligible to receive a gainsharing payment even if its episodes were a net positive for the hospital. With respect to individual collaborators, a hospital may not make gainsharing payments for a calendar year that are greater than 50 percent of the Medicare Part B payments for services provided by the collaborator during CJR episodes. This 50 percent cap applies to payments both to individual providers and PGPs. This is a departure from the BPCI Program where the 50 percent cap does not apply to PGPs and could influence their interest in participating in the CJR Model.

In addition, a single collaborator may agree to take on up to 25 percent of the hospital’s total downside risk, provided that in the aggregate, all of a hospital’s collaborators may only assume up to 50 percent of the hospital’s downside risk. No alignment payments may be collected if the hospital does not have to make a repayment to CMS.

Eligibility to Receive Gainsharing Payment

To receive gainsharing payments, collaborators must have directly furnished a billable service to a CJR beneficiary during a CJR episode. For PGPs, one or more of its members must have furnished a billable service to a CJR beneficiary during a CJR episode, and the PGP must also contribute to the hospital’s care redesign and also be clinically involved in the care of CJR beneficiaries. CMS has provided a nonexhaustive list of how a PGP could meet this standard: a PGP could provide care coordination services to CJR beneficiaries, engage with the hospital in care redesign strategies or implement strategies to manage comorbidities of CJR beneficiaries.

In addition, hospitals may not distribute gainsharing payments to any entity “that is subject to any action for noncompliance with this part or the fraud and abuse laws, or for the provision of substandard care in CJR episodes or other integrity problems.” This is a broadly worded restriction that could be read to mean that a hospital could not make a gainsharing payment to a collaborator if any suit or investigation under a fraud and abuse law is pending, even if the alleged violation is not related to the CJR program and without regard to the validity of the claim. According to the final rule preamble, a hospital could only make a payment after a final determination regarding the collaborator’s compliance.

Group Practice Payments to Group Practitioners

PGPs that are collaborators are permitted to distribute all or a portion of any gainsharing payment to the PGP’s individual practitioners. However, in order to receive a “distribution payment,” a practitioner must have furnished the item or service to a CJR beneficiary during a CJR episode. CMS believes that “a PGP’s existing practice compensation methodology is likely to be inapplicable to the determination and payment of distribution payments.” As CMS noted in the final rule, this restriction could require PGPs to amend their bylaws or internal contracts with practitioners regarding revenue distribution amongst group providers. A PGP is also prohibited from placing gainsharing amounts in its general fund and distributing the amounts to a practitioner who did not furnish a service during a CJR episode. The requirements on PGP distribution of gainsharing amounts could create operational challenges for many PGPs and could affect their interest in participation.

In addition, for those group members who are eligible to receive a distribution payment, the total payment from the group may not exceed 50 percent of the Medicare Part B payments for the practitioners service during a CJR episode.

Regulatory Waivers

As seen in other CMS innovation models, Stark Law and federal anti-kickback law waivers are available for collaboration arrangements under the CJR Model as long as the arrangements satisfy certain requirements under the CJR regulations, including those described above.

Conclusion

As CMS’s first mandatory bundled payment program, the CJR Model demonstrates a more forceful step away from traditional fee-for-service toward alternative payment models. If successful, it is very likely that CMS will look to expand the CJR Model both geographically and in terms of the types of services. In fact, CMS just recently proposed a new mandatory bundled payment program for cardiac and hip fracture care. The CJR Model provides an opportunity for hospitals to more closely align the incentives of providers who participate in the bundles, but hospitals will need to be mindful of CMS’s prescriptive requirements.

Managing the Transition to Transformation: Implementing a CJR Collaborator Agreement

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions