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Orthopedic Service and the CJR Bundled Payment Model

Posted By Marie Thomas
icd 10 medical coding

During the hustle and bustle of preparing for ICD-10 implementation in the fall of 2015, Centers for Medicare and Medicaid (CMS) were busy fielding comments solicited for the Comprehensive Care for  Joint Replacements (LEJR) model.  The final rule date was November 16, 2015 followed by the Federal Register publication of November 24, 2015 with an implementation date of April 1, 2016.  Medicare part A and B payments are involved under section 1115A of the Social Security Act.  

In 2014, nearly 400,000 hip and knee joint procedures were performed across the United States accounting for approximately $7 Billion healthcare dollars. CMS crafted the CJR model to:

“…improve quality and efficiency…creating a health care system that delivers better care, spends our dollars more wisely, and leads to healthier Americans”.

 As a common inpatient surgery, these orthopedic procedures will now be subject to bundled payment and quality measurements for each episode of care.  What this means to the hospital and provider as well as post-acute care providers is they will have to work together to coordinate care.  The stakes are high for both as all related care within 90 days of the hospital discharge will be included in the episode of care.  

Participant hospitals currently located in 67 geographic metropolitan statistical areas (MSAs) are mandated unless they are already participating in Model 1,2 or 4 of the Bundled Payments for Care Improvement (BPVI) program for Lower Extremity Joint Replacement (LEJR).  So, if you are located in any of the 67 MSAs and are a hospital paid under Inpatient Prospective Payment System (IPPS) this applies to you.  Since the CJR model does not require any application process, if you are one of the over 800 hospitals within the MSAs selected April 1, 2016 you will want to take a look at the documentation and utilization of MS-DRG’s 469 and 470 in your facility.  

  • DRG 469:  Major Joint Replacement or Reattachment of Lower Extremity with MCC
  • DRG 470:  Major Joint Replacement or Reattachment of Lower Extremity without MCC

Preparation and readiness can help minimize a negative impact as a result of the CJR, an alternative payment model.  Facilities may be incentivized or after the second performance year be required to repay Medicare some of the spending above an established target.  Beginning to work collaboratively with physicians, skilled nursing facilities, home health agencies, as well as any other post-acute care provider, will reduce anxiety.  Quality patient care is at the root of the CJR model with a focus on reducing avoidable hospitalization and complications associated with hip and knee replacement surgery.  

Knee CJR

Realizing that additional resources are often needed for hip fracture patients requiring hip and/or knee replacement, CMS has implemented a special pricing method using risk stratification that sets a different target price for this population of patients.  To allow hospitals time to collaborate with continuum of care providers involved in hip and knee replacement recovery, a gradual transition was agreed.  Since quality patient care is the goal, a composite quality score involves total hip arthroplasty and total knee arthroplasty (Complication measure (NQF#1550) and the HCAHPS patient experience survey measure (NQF#0166) as well as the successful reporting of THA/TKA patient-reported outcomes and limited risk variable data.

Health and Human Services Administration as a part of healthcare reform set goals of providing better care, smarter spending and healthier people. The CJR model can be seen as one of the alternative payment models answering the call to reform the current Medicare fee-for-service payments to this type of alternative payment model by 30 percent in 2016 and 50 percent by 2018.  CMS is treating the CJR model as a test,  allowing for data gathering regarding patterns of inefficient utilization of the total hip and knee replacement procedures.  It is in all our best interests not to fail the test, as future Medicare payment policies will surely be influenced by the outcomes of CJR data analyzed over the five performance years (2016 – 2020).  

Impacted hospitals are already entering into financial arrangements with orthopedic practices, skilled nursing facilities, suppliers of devices, long-term care hospitals, home health agencies, inpatient rehabilitation facilities, and outpatient therapists.  Developing care plans that consider each stage of hip and knee replacement from the inpatient surgery through recovery is essential.  All associated conditions that require care for 90 days after the procedure is performed are included in the bundled payment.  CJR focuses on low quality and high costs due to the lack of patient-centered coordinated care, making the collaboration between all providers involved imperative to the patient and to the bottom line.  

Eclat Health Solutions is staffed with skilled professionals ready to perform an audit of your current population of  MS-DRG 469 and 470 as a partner of best practice.  Care management is essential to improving patient care and reducing avoidable healthcare costs.  Our team is ready to assist you, contact us today.

About the Author

Marie Thomas holds a Masters in Healthcare Administration from Pfeiffer University, Charlotte, NC, and a Bachelor of Science in Healthcare Administration from Pfeiffer University. Marie has furthered her career education by becoming an AHIMA-Approved ICD-10-CM/PCS Trainer and Ambassador as well as earning the RHIT, CCS, CCDS, and CPC-H credentials. For more information please email us at contact@eclathealth.com


  • www.federalregister.gov/articles/2015/11/24/2015-29438/medicare-program-comprehensive-care-for-joint-replacement-payment-model-for-acute-care-hospitals
  • www.CMS.gov

Tags: ICD-10, Marie Thomas