CJR Model Should Adjust Payments Based on Risk, Researchers Say

The Comprehensive Care for Joint Replacement (CJR) model may unfairly punish hospitals that treat more complex patients, according a study published in HealthAffairs.

Under the CJR model, CMS will set annual episode target prices for both MS-DRGs 469 and 470 for hospitals. At the end of the year, participating hospitals’ actual spending and quality data will be compared to CMS’ targets. Hospitals will be eligible for additional payment if they fall under CMS’ spending targets but will be responsible for paying Medicare reconciliation payments if they exceed spending targets, CMS says.

Some stakeholders have expressed concerns that the CJR model does not include a risk adjustment mechanism to compensate for utilization and cost differences between typical patients and more medically complex patients. The CJR model does use a risk adjustment method for patients with hip fractures, but it does not adjust for other comorbidities that may result in higher costs and longer recovery times.

Researchers analyzed Medicare claims data for lower extremity joint replacement surgeries performed in Michigan between 2011-2013 and calculated reconciliation payments, both with and without risk adjustment based on the complexity of the patient. Researchers found that reconciliation payments were reduced by $827 per episode after risk adjustment. Adjusting for risk also lowered annual payments overall for hospitals that treated the least complex patients and increased payments for hospitals that treated the most complex patients.