Guest Columns

Final rule for joint replacement: Don't come unhinged!

Steven Littlehale
Steven Littlehale

EDITOR'S NOTE: Since this blog was first posted, the BPCI Team for CMS Bundled Payments for Care Improvement has clarified inconsistent verbiage concerning how a SNF provider can access the three-day waiver: "The SNF Waiver refers to the CMS 5-Star Quality Rating System, which means the overall star rating of the SNF."

The first mandatory bundled payment program was set into motion with the publication of the Final Rule on Comprehensive Care for Lower Extremity Joint Replacement (CJR). That was Nov. 18, 2015, and it sent many hospital providers scurrying.

That's because it left less than 20 weeks before the program's implementation. That number is now down to less than 10 weeks. From the start, it was hardly enough time to establish formal contracts with post-acute care (PAC) providers, let alone to determine which PAC providers would be ideal to partner with for the best outcomes.

The first year of the program starts in April (really!) and will not result in any penalties or gains for hospitals. Starting Jan. 1, 2017 — known as performance year two — hospital providers will be “at-risk” for the costs and outcomes for these episodes of care.

What will that mean? Hospitals will choose to work with PAC providers that can keep costs and length of stay low, and quality high. To assist, the Centers for Medicare & Medicaid Services has instituted a key waiver in the CJR program.

Starting Jan. 1, 2017, CMS will waive the skilled nursing facility three-day rule. This means that participant hospitals may only discharge a CJR beneficiary to a SNF with an overall CMS Five-Star rating of three stars or better at the time of hospital discharge.

To qualify for the waiver program, the SNF must have been a 3-star overall for seven of the past 12 months.  Based upon Five-Star methodology, 20% of SNFs in every state will not be included at any given time. Note that the SNF three-day rule has been waived for Medicare SNF coverage under other BPCI Model 2, but these programs used a Five-Star QUALITY rating of 3 or better, not an overall rating.

The Five-Star Rating System for Nursing Homes has specific rules about how you earn stars. The first metric that sets the foundation is the survey composite score. In every state, the bottom 20% of all SNFs is set to 1 star. This forced distribution, implemented by CMS, sets up a potential access-to-care issue for Medicare beneficiaries under CJR.  

By rule, if a SNF is one star on survey, it can add only one additional bonus star — even if it earned more.  As a result, 20% of all SNFs in every state are, at best, two stars overall … and out of the running for the waiver.   Hospitals will now have to be scanning Nursing Home Compare or lean on their PAC SNF partners to provide Five-Star ratings to be sure that they qualify for the waiver program.

How does this change potentially impact patient choice and access to care? Under CJR, Medicare beneficiaries still have the right to choose where they want to go for post-acute care. But what if where they want to go is not a 3-star center? Will the hospital “wait” for a bed after the third day, or will there be a bit of pressure placed on the beneficiary to accept an alternate bed?

Use just a little imagination and you can see how providers might become a little unhinged when working to find the best outcomes under this new payment model.

Steven Littlehale is a gerontological clinical nurse specialist, and executive vice president and chief clinical officer at PointRight Inc.

Guest Columns

Guest columns are written by long-term care industry experts, ranging from academics and thought leaders to administrators and CEOs.

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