Top 5 Reasons to Gainshare in CJR
Nearly 800 hospitals are beginning the mandatory Comprehensive Care for Joint Replacement (CJR) model next month. In this Centers for Medicare and Medicaid Services (CMS) model, lower extremity joint replacement (LEJR) procedures will be part of a bundled payment rather than fee-for-service payment model. CJR hospitals will be financially responsible for the entire episode of care related to LEJR procedures performed in their hospitals on Medicare patients. CMS is launching CJR as part of its goal to alternative payment models, such as bundled payments, by 2018.
A Lot to Gain, A Lot at Risk
In the CJR model, hospitals have a large financial stake in what happens to patients during the entire episode of care: up to 90 days post-discharge after an LEJR procedure. Each hospital is given a bundle target price based on contributions from both their hospital-specific historical LEJR episode expenditures and regional (US Census regions) LEJR episode expenditures. If a hospital’s average LEJR episode cost is below the target price, they can receive a reconciliation payment (upside gain) from CMS. If their average cost is above the target price, they will owe CMS the difference (downside risk), beginning after the first year of the program. Every service billed to Medicare during the episode reduces the possible reconciliation payment, so hospitals are looking for ways to minimize unnecessary expenditures while providing quality care.
While hospitals are the ones held accountable for the LEJR episode cost, they do not have to bear the risk alone. They can share both downside risk and upside gains with partners. Hospitals should not shy away from gainsharing and here are five reasons why.