CJR is an acronym for The Comprehensive Care for Joint Replacement model, designed to test bundled payment and quality measurement.
The purpose of CJR is to improve care for Medicare patients undergoing hip and knee replacements, which are the most common inpatient surgeries for Medicare beneficiaries.
In 2014, there were more than 400,000 of these procedures, for which the cost of hospitalizations alone was over $7 billion.
CJR is structured to encourage care coordination between hospitals, physicians, and post-acute care providers throughout the “episode of care”. The episode begins when a patient is admitted to the hospital and discharged, and ends 90 days after discharge.
The reason the episode of care includes the 90 days after discharge is to ensure the patient’s recovery and rehabilitation period after hip or knee replacement surgery is covered.
Hospitals under the CJR model are held accountable for cost and quality of a CJR episode of care, and patients retain the freedom to choose providers and services.
The Centers for Medicare & Medicaid Services (CMS) has implemented CJR in 67 metropolitan statistical areas (MSAs). Approximately 800 hospitals are participating.
Payment and Pricing
The Centers for Medicare & Medicaid Services provides hospitals under the CJR model with price targets before the beginning of each performance year. The targets represent expected spending based on past data for Lower Extremity Joint Replacement procedures (LEJR). The data used to determine targets includes hospital-specific expenses and regional expenses.
At the end of the performance year, CMS compares the target price to the hospital’s actual spending to determine if the hospital is eligible for a reconciliation payment or if the hospital needs to pay Medicare for a portion of costs in excess of the target.
If the hospital’s LEJR spending is below the target price set by CMS, and if quality measures are met, the hospital is eligible for a payment from Medicare for the difference between the hospital’s actual LEJR expense and the original target price.
CJR is just one example of a model created to improve the efficiency and effectiveness of healthcare in the US. By aligning hospitals, physicians, and care coordinators, and by incentivizing each group to deliver cost-effective care without compromising quality, value is created within the system.