The Centers for Medicare and Medicaid Services yesterday announced a final rule for bundling payments for hip and knee replacements, effective April 1.

Under the Comprehensive Care for Joint Replacement model, the hospital in which the joint replacement takes place would be held accountable for the quality and costs of care for the entire episode of care from the time of the surgery through 90 days after discharge. Hospitals in 67 geographic areas will receive additional payments if quality and spending performance are strong or, if not, potentially have to repay Medicare for a portion of the spending for care surrounding a lower extremity joint replacement procedure.

The Newark-New York metropolitan statistical area (MSA) is included in the rule, and NJHA will work to identify the specific hospitals that will be included.

The proposed framework for the model was displayed in the Federal Register July 9. CMS said nearly 400 comments were received on the proposal, resulting in several major changes, including:

• Start Date: The first performance period for the model will begin April 1, 2016, instead of the proposed Jan. 1 start date.
• Site Selection: The model will be implemented in 67 metropolitan statistical areas (MSAs), instead of the proposed 75 MSAs
• Quality Measures in Model Pay-for-Performance: CMS is finalizing an alternative, composite quality score methodology, rather than the threshold methodology originally proposed. The goal is to provide stronger incentives for more hospitals to improve quality.
• Payment: In response to several commenters requesting a more gradual transition to downside risk and a lower stop-loss limit, CMS is finalizing a policy for no repayment responsibility in performance year 1, a stop-loss limit of 5 percent in performance year 2, a stop-loss limit of 10 percent in performance year 3 and a stop-loss limit of 20 percent in performance years 4 and 5 for participating hospitals other than rural hospitals, Medicare-dependent hospitals, rural referral centers and sole community hospitals. A parallel approach has been finalized for the stop-gain limits to provide proportionately similar protections to CMS and hospital participants, as well as to protect the health of beneficiaries. CMS also is gradually phasing in repayment responsibility with a reduced discount percentage for repayment responsibility in years 2 and 3.
• Waivers: No waivers of any fraud and abuse authorities are being issued in the final rule. Rather, CMS and the Office of Inspector General will jointly issue a notice regarding the waiver of certain fraud and abuse laws for purposes of testing this model.