CMS finalizes bundled payment model for hip, knee replacements

The bundled payment model for hip and knee replacements starts April 1, 2016
The bundled payment model for hip and knee replacements starts April 1, 2016

The Centers for Medicare & Medicaid Services has released its final bundled payment model for hip and knee replacement surgeries, which includes plans to waive the three-day stay rule for beneficiaries entering “qualified” skilled nursing facilities.

The final rule, which was released Monday, will require hospitals in 67 geographic areas — scaled down from the original 75 — to participate in the Comprehensive Care for Joint Replacement Payment Model.

The five-year test will go into effect on April 1, 2016, pushed back three months from its proposed start date of January 1. Providers urged CMS to hold off on starting the program until the summer so that providers would have time to prepare.

Under the model, hospitals will be held accountable for all financial risk surrounding the surgery, inpatient stay and care following discharge. In a September letter to CMS, the American Health Care Association raised concerns that long-term care providers would be “locked out” of a hospital-centric model.

“We wish CMS had accommodated our request for post-acute facilities to hold the bundle. It did not,” said AHCA President and CEO Mark Parkinson in a statement. “But, we are pleased that CMS has indicated they may consider, through future rulemaking, other episode of care models in which post-acute care providers are financially responsible for the costs of care."

The final rule also takes into account provider concerns over CMS' plan to make a waiver to the three-day stay rule dependent on an SNF's Five-Star Quality Rating, which one expert speculated could result in 25% of 1- and 2- star SNFs to close over the course of the test.

The finalized waiver — which wouldn't go into effect until the second year of the model — would only be granted if a beneficiary is being discharged into an SNF that is included on a list of “qualified” SNFs. The final rule defines a qualified SNF as one that has an overall rating of 3 stars or more for at least 7 of the previous 12 months.

Parkinson wrote that the final rule's amended waiver “makes it easier for more skilled nursing centers to participate, and creates an incentive for quality improvements.”

The full Comprehensive Care for Joint Replacement Payment Model rule can be read here.