Reducing Costs. Improving Quality. Reinventing...

September X, 2015

Mr. Andrew M. SlavittActing AdministratorCenters for Medicare & Medicaid ServicesU.S. Department of Health and Human ServicesAttention: CMS-1632-PHubert H. Humphrey Building200 Independence Avenue, SW Room 445-GWashington, DC 20201

Submitted electronically to: http://www.regulations.gov

RE: CMS-5516-P, Medicare Program; Comprehensive Care for Joint Replacement Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint Replacement Services; Proposed Rule.

Dear Mr. Slavitt:

On behalf of the Premier healthcare alliance, we appreciate the opportunity to submit comments regarding the regulation proposed by the Centers for Medicare & Medicaid Services (CMS) for the Comprehensive Care for Joint Replacement (CCJR) program. Premier is a leading healthcare improvement company, uniting an alliance of approximately 3,600 U.S. hospitals and 120,000 other providers to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, advisory and other services, Premier enables better care and outcomes at a lower cost. Premier, a Malcolm Baldrige National Quality Award recipient, plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Our comments primarily reflect the concerns of our owner hospitals and health systems. As a facilitator convener of more than 80 episode initiators under the Bundled Payment for Care Improvement (BPCI) initiative, Premier has a vested interest in not only that initiative, but also the effective expansion of bundled payments nationally. Below, the Premier healthcare alliance provides detailed comments with suggested modifications to the policies proposed by CMS.

http://www.regulations.gov/

Mr. Andrew M. SlavittSeptember X, 2015

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TIMELINE

With few exceptions, CMS proposes to mandatorily apply bundled payments for episodes of care involving lower extremity joint replacement (LEJR) furnished by hospitals in 75 geographic areas starting January 1, 2016. We concur with CMS that the current fee-for-service (FFS) payment system fails to reward healthcare providers’ attempts to achieve high-quality, cost-effective healthcare and that new payment models need to be scaled nationally. Premier believes that one promising approach that breaks down the existing silos of care, aligns providers’ incentives and improves patient outcomes and satisfaction is bundled payment. However, we are concerned that CMS’ proposal does not allow for adequate preparation time for participants, many of whom are new to bundling, or CMS. On such a lightning fast pace, for such a large swath of the country and without any formal application process to ascertain a provider’s ability to manage an episode, we are concerned there may be unintended consequences for all involved.

Under the current timeline, hospitals have been given very little warning to prepare. If the chosen MSAs change, they may have virtually no time to prepare depending on when the final rule is released. In order to appropriately direct the resources to thoughtfully implement a bundled payment program, hospital administrative and clinical staff must undertake many activities, including but not limited to the following:

Learn CCJR program rules and policies; Understand the mechanics of bundled payment; Review Medicare claims data to identify risks and opportunities and expertly target

customized care interventions; Educate and engage clinical staff; Inform and educate Medicare beneficiaries; Develop and execute new contracts with physicians and all providers that address

gainsharing; Identify and contract with key PAC partners; Develop specific CCJR pathways and quality metric tracking systems in EMRs; and Create accounts and financial systems to track reconciliation and gainsharing

payments.

The members with whom we partner needed six to 12 months to prepare for BPCI. These new sites deserve the same timeline in order to assure success: the CCJR start date must be delayed to maximize the benefit of clinical transformation for patients.

From a program administration perspective, many of the underlying policies and operations are not yet viable. The Office of the Inspector General has not yet opined on legal waivers that are


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critical to the success of the program. The necessary codes for the payment waivers are not yet developed, nor is the data request process. And, CMS plans to implement this within 90 days of the implementation of ICD-10, which will fundamentally change the underlying case grouping, the exclusions, the quality metrics etc. In addition, while we appreciate that the quality metrics are collected on a CY, the fiscal year makes more sense for a hospital-based program following the annual changes in diagnosis-related groups, quality measure adoption etc. We urge CMS to delay the start date of CCJR until at least October 1, 2016 to give all stakeholders adequate time to prepare including CMS.

EPISODE INITIATOR

Financial Responsibility for the Episode of Care

Acute care hospitals would be the only episode initiators under CCJR and would be financially responsible for the entire episode of care, with limited exceptions, plus a post-episode monitoring period. CMS’ rationale for placing financial responsibility with the hospital under the CCJR model is that an episode always begins with an acute care hospital stay, IPPS payments comprise about 50 percent of Medicare payments for a 90-day episode, and the beneficiary’s recovery begins with the hospital stay. It notes that most hospitals have some infrastructure related to health information technology, patient and family education and discharge planning upon which hospitals can build to achieve efficiencies. CMS believes that hospitals are also more likely than other provides to have an adequate number of episode cases to justify episode-based investment for this model. CMS goes on to describe in why it believes physicians would face significant challenges if they had to own the episode.

While we concur with CMS’ justifications for hospitals leading the episodes, this is diametrically opposed to CMS’ statements and actions as it relates to BPCI and the Oncology Care Model (OCM) under which physicians are either the only participants or the preferred participants. CMS cannot say under CCJR that hospitals are the best suited to take responsibility for an episode, and then provide precedence to physician groups and post-acute care organizations under BPCI and to physicians over hospitals within BPCI. We do not believe it is fair-minded to allow physicians and post-acute care organizations to choose to voluntarily enter the models built for them, but then force the hospitals to not only enter their models but own the risk. While this is not directly pertinent to this program, we urge CMS to align the rules of BPCI and OCM with the rational expressed around this bundled payment program.


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CMS contends the mandatory model is necessary to test the effects of episode-based payment for LEJR procedures furnished by hospitals with a variety of historic utilization patterns; roles in their local markets; volume of services provided; access to financial, community or other resources; and density of population and healthcare providers. A design that requires hospital participation in selected geographic areas would enable CMS to test bundled payments without introducing selection bias such as that inherent in the BPCI model due to self-selected participation.

While we understand this would permit examination of the results from a more generalized payment model than other demonstrations we believe the overwhelming response to the Medicare Shared Savings Program (MSSP) and BPCI show that providers will voluntarily enter such alternative payment models (APMs) for most of the country. Furthermore, the Medicare Access and CHIP Reauthorization Act of 2015 will likely spur additional participation in such programs as eligible professionals seek to avail themselves of the five percent bonus on fee-for-service payments for participation in APMs. Moreover, the areas that do not chose to enter such programs are probably lower-volume areas where the models are less likely to function as intended. Hospitals should be able to choose the model that best fits their mission and abilities as well as market realities rather than being forced into a particular program for a particular condition.

Depending on a hospital’s current degree of clinical integration, CMS believes new and different contractual relationship among hospitals and other providers may be important for CCJR model success in a community. CMS notes it considered the role of the convener relationship in the BPCI initiative (where another entity assumes financial responsibility) but concludes that if a convener were to be included in the CCJR model, then CMS could not assess how a variety of hospitals can succeed in a relationship with CMS in which the hospitals bear financial risk for the episode of care.

Premier is a facilitator convener under BPCI. We have found this to be an effective model at providing support to numerous participants at once without altering the financial incentives at play. We continue to believe there is a role for facilitator conveners that do not absorb risk, but offer enhanced performance through collaborative efforts. However, we have expressed concern to CMS in the past that awardee conveners that take all or a substantial portion of the risk on behalf of the providers alters the incentives in a way that undermines the model. In our experience, Episode Initiators who assume the majority of the risk of the episodes in which they participate are maximally invested in care transformation and the program overall. Providers contracting with risk bearing awardee conveners have little incentive to fully engage in true care delivery innovation as they do not bear the risk. This is counter to CMS’ stated intent of bundled


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payment: to bring providers together to fundamentally change the provision of care in order to increase the value and patient experience of care. Thus, we support the limit on the amount of risk that can be shifted to collaborators, but urge CMS to apply the same limitations on all providers under episode-based payments regardless of the program.

Excepted hospitals

Maryland Hospital Exception

CMS proposes to exclude all acute care hospitals in Maryland from the CCJR because of the state’s All-Payer Model, which is operating under CMS waivers, effective January 1, 2014. We concur with CMS that Maryland should be allowed to develop its own strategy to encourage higher quality care and efficiencies across clinical settings.

BCPI ParticipantsCMS proposes one exception to its proposed requirement that all hospitals in a selected area participate in the CCJR model. IPPS hospitals located in an area selected for the model that are active Model 1 BPCI participant hospitals as of July 1, 2015 or episode initiators for LEJR episodes in the risk-bearing phases of Model 2 or 4 of BPCI as of July 1, 2015 would be excluded from participating in CCJR during the time that their qualifying episodes are included in one of the BCPI models. If the participant hospital is not an episode initiator for LEJR episodes under BCPI Model 2, then LEJR episodes initiated by other providers or suppliers under BCPI Models 2 or 3 (where the surgery takes place at the participant hospital) would be excluded from the CCJR. Otherwise qualifying LEJR episodes (those not part of a Model 3 BPCI LEJR episode or a Model 2 physician group practice-initiated LEJR episode) at the participant hospital would be included in the CCJR. Following both sets of rules would be unduly confusing for the hospital and its partner providers and suppliers as well as patients to the extent that the legal and payment waivers end up being different. We support hospitals in BPCI being able to remain in BPCI for all conditions versus having to follow CCJR rules for just LEJR episodes. However, we are concerned about other provider and supplier participants in BPCI taking precedence over CCJR cases and recommend solutions below.

Hospitals with a Low Volume of EpisodesWe are deeply concerned about the challenges presented to facilities with a low-volume of cases that will create volatility in their experience. In addition to those organizations that simply do not furnish many of LEJR cases, the proposed precedence rules could cause hospitals mandated to participate in CCJR to lose a significant number of episodes to BPCI participants resulting in unsustainable levels (which we discuss in the MSA selection section). A member in a Pacific


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Northwest MSA included in CCJR reports that upwards of 95 percent of their LEJR cases accrue to their contracted orthopedic group in BPCI leaving the hospital with roughly 20 cases. As a result, Premier recommends that CMS employ a minimum CCJR episode volume threshold. If a hospital has less than 100 episodes in a reference year (the number needed to reduce volatility in price and risk in our BPCI experience), or if over 50 percent of the hospital’s episodes are attributed to a physician or post-acute care BPCI entity, the hospital should not be required to participate in CCJR even if the MSA is selected. CMS should move forward with the development of different models tailored toward rural and low-volume areas rather than force them into this model.

OVERLAPS WITH OTHER PROGRAMS

The proposed rule identifies the current or forthcoming programs and models with potential overlap with beneficiary episodes under the CCJR model including six programs that include shared savings opportunities where reconciliation of the programs may need to occur. In previous comments associated with the inpatient prospective payment system, we expressed our concern with the increasing overlap of various alternative payment models and the need to determine a long range plan to harmonize them. The table below summarizes CMS’ proposed methodology for accounting for the overlap between CCJR with BPCI and MSSP specifically.

Table 1:

BPCI LEJR Episode

BPCI Non-LEJR Episode

MSSP (Aligned Hospital)

MSSP (Non-Aligned Hospital)

Program Precedence BPCI LEJR No precedence No precedence No precedence

Attribution of Savings N/A Not specified CCJR CCJR

CCJR Discount Factor N/A Not specified

CMS recoups CCJR discount paid

out as MSSP savings

No adjustment

ProgramCCJR Overlap Issue

Note: “No precedence” means that a patient can be in CCJR and the program simultaneously.

CCJR Beneficiary Overlap with BPCI Episodes


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Despite exclusions from the CCJR demonstration that CMS proposes to make to mitigate overlap with BPCI episodes, overlap could occur in several situations such as those illustrated by these examples:

1) A beneficiary is admitted to a participating CCJR hospital for an LEJR procedure where the beneficiary could also be in a BPCI Model 2 episode under a physician group practice that could initiate the episode under BPCI;

2) A beneficiary discharged from an anchor hospitalization under CCJR could enter a BPCI Model 2 LEJR episode at another hospital for a phased second joint replacement procedure or enter a BPCI Model 3 LEJR episode upon initiation of PAC services at a BPCI post-acute provider episode initiator for the LEJR episode;

3) A beneficiary discharged from an anchor hospitalization under CCJR could enter a BPCI Model 2 LEJR episode at another hospital for a different condition such as CHF;

4) A beneficiary is in a BPCI Model 2 or Model 3 for CHF and fractures a hip that is replaced at a CCJR hospital; or

5) A beneficiary in a BPCI Model 2 or Model 3 LEJR episode could be admitted to a CCJR participant hospital for a phased second joint replacement.

In all such scenarios in which there is overlap of CCJR beneficiaries with any BPCI LEJR episode, CMS proposes that the BPCI LEJR episode under Models 1, 2, 3, or 4 take precedence and CMS would cancel (or never initiate) the CCJR episode. Thus, CMS would exclude the CCJR episode from the CCJR participant hospital’s reconciliation calculations where it compares actual episode payments to the target price under the CCJR model.

Many health systems will be faced with a mix of BPCI and CCJR hospitals with different payment models, quality metrics, legal waivers etc that will make compliance more difficult. Even those health systems that are not part of BPCI may face a mix of patients that accrue to them and others that accrue to BPCI physician groups, post-acute care providers or even non-provider organizations making it difficult to target efforts to the patients for whom the hospital is actually responsible.

Bundled payments hospitals are not on a level playing field with other providers who were able to voluntarily choose to participate in BPCI and are given precedence over CCJR. Rather, CCJR hospitals are required to take on the challenge in the areas where others did not perceive enough return on investment to enter such a program. In particular, we do not believe that hospitals are treated on par with physician groups who are given precedence over the hospitals for all but the first round of entrants to BPCI regardless of whether the attending or surgeon is part of a hospital’s BPCI organization. Physician groups will be given precedence over both BPCI and CCJR hospitals despite the fact that CMS justifies the mandatory nature of the program by


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pointing to the hospitals’ capital availability, existing quality improvement efforts and other advantages. Moreover, post-acute care organizations that are only taking on a partial episode in BPCI are given precedence over the CCJR hospitals that are responsible for a longer bundle on a mandatory basis.

As it is unclear whether CMS intends to expand this mandatory program or BPCI over time, it is difficult to make informed comments on how overlapping programs should be reconciled. We recognize that providers that have already voluntarily devoted resources to BPCI should be afforded some protection. However, we know that the current precedence rules as proposed by CMS are untenable. It is one thing to allow BPCI hospitals to remain in that program in lieu of this as there is not any conflicts between the hospitals since only one hospital can furnish the index procedure. It is another to allow physician and post-acute care organizations in a voluntary program to cancel what may be the majority of the LEJR provided at a hospital under a mandatory program. If CMS plans to expand both programs, then it may be appropriate to give the mandatory program precedence over the voluntary program. In the meantime, to better reconcile these program, at minimum, we suggest that CMS modify its MSA selection criteria as well as develop a hospital-level threshold whereby a hospital is removed from CCJR if more than 50 percent of its LEJR procedures accrue to BPCI participants.

Accounting for PBPM Payments in the Episode DefinitionCMS proposes to determine whether the services paid by PBPM payments are excluded from the CCJR episode on a model-by-model basis based on their funding source and clinical relationship to the CCJR episode. In general, if CMS finds the services to be clinically related to the CCJR episode and the PBPM payment is funded through the Medicare Part A or B Trust Fund, it would include the services if the services would not otherwise be excluded based on the principal diagnosis code on the claim. All services paid by PBPM payments funded through the Innovation Center would be excluded from CCJR episodes, without a specific determination of their clinical relationship to CCJR episodes. We appreciate CMS’ statement that it will seek future public input on PBPM payments that are clinically related to CCJR. We further support the exclusion of CPCI, OCM and the Medicare Care Choices Model.

Overlap with Shared Savings Models

Premier believes that CMS must pursue policies that enable the harmonious coexistence of these programs. The presence of one program cannot be to the direct detriment of another model. As depicted in the table, CMS proposes that hospitals that are part of an MSSP ACO or other shared savings model would still be required to participate in CCJR, and that CCJR savings would be attributed to CCJR and counted as regular performance period payments for the MSSP and other


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shared savings models. In effect, an MSSP ACO would have little chance of scoring savings for any patient in a bundled payment episode. Thus, CMS should allow MSSP participants to exclude themselves from the CCJR program. However, if they chose to enter the program, CMS could alter its proposed gainsharing rules to allow some funds to be shifted back to the ACO that assisted in achieving savings through contractual agreements. Premier agrees that when an overlap occurs with related organizations, it is appropriate to attribute savings to a bundled program as the participants have chosen to structure the care and its gainsharing arrangements around the shorter duration hospital-based procedure. As such, in the event that a CCJR-participant hospital is aligned to a Medicare ACO, Premier supports the proposal to attribute savings to CCJR.

However, as previously stated, Premier believes that providers that have already voluntarily devoted resources to a different risk-based model should be afforded some protection. This issue becomes more critical in which an ACO’s attributed beneficiary triggers a CCJR episode at a non-aligned hospital. In the event that overlap occurs between a Medicare ACO and a non-aligned CCJR hospital, Premier proposes that the Medicare ACO would take precedence. It is imperative that this policy be paired with Premier’s proposal to limit CCJR participation to hospitals with at least 100 CCJR episodes in a reference year.

Table 2:

BPCI LEJR Episode

BPCI Non-LEJR Episode

MSSP (Aligned Hospital)

MSSP (Non-Aligned Hospital)

Program Precedence BPCI LEJR BPCI Non-LEJR Episode

No precedence MSSP

Attribution of Savings N/A N/A CCJR MSSP

CCJR Discount Factor N/A N/A

CMS recoups CCJR discount paid

out as MSSP savings

N/A

CCJR Overlap IssueProgram

Premier acknowledges that this additional precedence rule could create confusion for non-aligned hospitals in markets with Medicare ACOs. As such, Premier recommends that CMS provide hospitals with lists of patients prospectively and tentatively assigned to Medicare ACOs.

Finally, we believe Premier’s alternative proposals would better enable different models to coexist in the same market, the challenges created by the existence of multiple risk-based models


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will persist with the inevitable introduction of new alternative payment programs. It is imperative that CMS pursue a larger strategy for dealing with the potential overlap of different programs. The absence of a broader plan for integrating and transitioning between different risk-based models will force the continued adoption of patchwork solutions, which enhance the complexity of the nation’s health system. Premier is committed to supporting such a strategic planning process.

GEOGRAPHIC AREA SELECTION

CMS suggests that the best approach to selecting geographic areas is a stratified random sampling method. In determining the definition of the geographic area from which the sample would be chosen CMS considered:

1) Certain counties based on their Core-Based Statistical Area (CBSA) status; 2) Certain zip codes based on their Hospital Rural Referral Regions (HRR) status; or 3) Certain states. CMS concludes in favor of entire MSAs as the geographic area.

The CCJR model would therefore require participation of all hospitals paid under the IPPS, with few exceptions, physically located in a county in an MSA selected through a stratified random sampling methodology. We do not dispute the suitability of employing the sampling methodology for this purpose, but we believe CMS needs to make refinements to the methodology.

MSA Selection Methodology

Exclusion of Certain MSAsCMS would exclude from the selection of geographic areas MSAs that met one of four criteria between July 1, 2013 and June 30, 2014:

1) Less than 400 LEJR episodes occurred from July 1, 2013 through June 30, 2014; 2) Less than 400 non-BPCI LEJR episodes in the reference year; 3) 50 percent or more of the LEJR episodes were initiated by a Model 1, 2 or 4 hospital

awardee, or a Model 3 SNF or HHA awardee; and 4) 50 percent or more of LEJR episodes were not paid under IPPS.

While we agree with the criteria CMS has established, we believe they need to be broadened. CMS excluded the areas where there was high saturation of hospital and post-acute care lead


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BPCI participants, but neglected to remove the physician-lead participants. Given that the index admission will only occur at one hospital, whether another hospital is in BPCI is less concerning than whether another physician group is in BPCI. Hospitals in the CCJR areas could find upwards of 90 percent of their LEJRs accruing to a BPCI physician group leaving the hospital with only a low-volume of cases. Given that the rule says the target is based on CCJR episodes, we do not believe the BPCI cases will affect the CCJR target prices, but ask that CMS confirm that in the final rule. Otherwise, the CCJR target may also be unrepresentative. Moreover, CMS ran the analysis prior to the addition of many new BPCI participants as the last election period was July 1, 2015. CMS should rerun the analysis based on new data and expanded exclusion criteria that remove areas with significant penetration by physician-lead BPCI participants.

Sample Size Calculations and the Number of Selected MSAs Analyses of the necessary sample size led CMS to conclude that it needed to select 75 of the 196 MSAs with eligible LEJR episodes to participate in CCJR, but notes that this is a “conservative approach” to allow for some degree of flexibility. CMS determined that it would need between 50 and 150 treatment MSAs to be able to reliably detect a 2 percent reduction in payments after 1 year (the anticipated discount). Given these estimates, CMS should be able to drop somewhat below 75 areas and not jeopardize its ability to be confident in its results and generalize them from the model to the larger national context. It may be, once CMS implements new criteria and utilizes updated data, that fewer areas are available for sampling. If so, CMS may need to consider reducing the number of areas in the program.

Method of Selecting MSAs After looking at various options, CMS decided that a methodology that proportionally under-weighted more efficient MSAs and over-weighted more expensive MSAs was the most appropriate approach to fulfilling the overall priorities of this model to increase efficiencies and savings for LEJR cases while maintaining or improving the overall quality of care. While in concept, we support the over-sampling of higher cost regions, we again note that CMS may need to make modifications to this proposal if fewer areas are available for sampling after the expansion of the exclusion criteria and the use of newer data.

DEFINITION OF MODEL

Definition of Related Services Included in the Episode


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All Medicare Parts A and B items and services would be included in the episode spending (whether historical or actual) except as specified. Because CMS wants to test inclusive episodes, it proposes to exclude only those Medicare items and services furnished during the episode that are unrelated to LEJR procedures based on clinical justification. CMS proposes to exclude the following items and services from the episode:

1) Hemophilia clotting factors; 2) New technology add-on payments; and3) Items and services unrelated to the anchor hospitalization, as determined by CMS.

The Premier healthcare alliance supports the CMS proposal to utilize the BPCI Model 2 LEJR exclusion list as a starting point to define exclusions for CCJR episodes. We agree with CMS that excluding both hemophilia clotting factors and new technology add-on payments will ensure continued beneficiary access and avoid volatility. We furthermore support the exclusion on un-related services from the episode calculations. Premier supports the proposed excluded items and services. Part A ExclusionsExcluded services would include inpatient hospital admissions for MS-DRGs that group to the following categories of diagnoses:

1) Oncology; 2) Trauma medical; 3) Chronic disease surgical, such as prostatectomy; and4) Acute disease surgical, such as appendectomy.

We support all of the proposed inpatient diagnosis exclusions, but recommend additional exclusions.

While Premier supports using DRGs to define episodes, in some instances, patients who fall under the same DRG may have very divergent care pathways and outcomes. This is especially pronounced in the case of hip fracture patients vs. non-fracture patients in the major joint replacement of the lower extremity episode (DRGs 469 and 470). Extensive analyses of this subpopulation (which appears in both DRGs 469 and 470) show that hip fracture patients experience twice as high readmissions and post-acute care utilization rates given their non-elective surgeries. In fact, fractures are removed from the quality measures for these reasons. Moreover, a change in prevalence of hip fractures over time can result in a baseline target no longer represents an accurate benchmark. This type of shift will challenge hospitals to generate savings despite excellent care for very high-risk patients. Thus, Premier believes that patients with hip fracture diagnoses should be excluded from CCJR.


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Premier previously suggested possible alternative recommendations that would enable a more accurate target price to be assigned to fracture patients. These recommendations included the following:

1) Remove hip fractures from DRGs 469 and 470 into a new and separate DRG; and 2) Assign all hip fractures to DRG 469 to increase the homogeneity within this high-risk

DRG.

However, these proposals would require further regulatory action. The preferred proposal of excluding all fracture cases from CCJR would balance expediency with the need to create a fair target price.

Part B ExclusionsExcluded services would include Medicare Part B services as identified by the principal ICD-CM diagnosis code on the claim that group to the following categories of diagnoses:

1) Acute disease diagnoses, such as severe head injury; 2) Certain chronic disease diagnoses, as specified by CMS on a diagnosis-by-diagnosis-

basis;3) Certain PBPM payments under models tested under section 1115A of the Act.

Overall, CMS’ system of excluding inpatient readmissions at the DRG level and outpatient services with ICD-9 diagnosis codes is clinically reasonable. However, building an accurate benchmark that predominantly holds providers accountable for manageable patient risks will require refinements. While using ICD-9 CM diagnosis codes as the core criterion is fitting, it may be too blunt of an instrument on its own. For instance, a patient may receive a cancer drug during an inpatient admission categorized under a non-cancer DRG that is included under BPCI. Not all appropriate exclusions can be determined from ICD-9 codes. Adding ICD-9 procedure codes, HCPCS and/or CPT code-based exclusions could mitigate this issue.

Also, Premier notes that hospice is excluded from BPCI LEJR episodes, yet CMS proposes to include hospice in CCJR episodes. The Premier healthcare alliance strongly recommends that hospice be excluded from CCJR in order to prevent unintended perverse incentives that could impact beneficiaries.

Updating the List of Excluded ServicesCMS proposes to update the exclusions list (without rulemaking) on an annual basis, at a minimum, to reflect annual changes to ICD-CM coding and annual changes to the MS-DRGs under the IPPS, and to address any other issues brought to its attention. CMS would post the potential revised exclusions, which could include additions to or deletions from the exclusions list, to the CMS website to allow for public input, and then adopt changes to the exclusions list


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with posting to the CMS website of the final revised exclusions list after its consideration of the public input. If CMS is going to update the exclusions list only once a year, especially if it is primarily for routine code updates, it should use the existing rulemaking process that ensures public input. However, we see value in CMS accepting possible additions and deletions on a quarterly basis, especially in the early stages of the program. If CMS uses subregulatory mechanisms to update the list, it should be through a set quarterly seek process to seek comments through CMS’ website and listservs to ensure broad stakeholder input.

Duration of Episodes of Care

The Premier healthcare alliance believes that a model including the index hospital admission and up to 90 days post-discharge renders it superior to other models that only include either the inpatient episode or the post-acute period. In addition to creating stronger incentives for collaboration between providers across the care continuum, this model complements and builds upon other Medicare programs, such as the inpatient Value-based Purchasing (VBP) program, the physician Value-based Payment Modifier (VM) and the Hospital Readmission Reduction Program. These programs score hospitals ability to efficiently manage care across 30 days post-discharge and reduce readmissions. A combined payment bundle encourages more fruitful results from these requirements by aligning post-discharge care coordination activities of hospitals with those of post-acute providers, and providing the tools needed to ensure that care is delivered efficiently throughout an episode of care.

Beginning the EpisodeThe episode would begin with admission to a participant hospital for an anchor hospitalization. Many tests of bundled payment heretofore have included a period prior to the inpatient stay. This can pull in some care that is unrelated to the episode, particularly if a patient is already in a home health or skilled nursing facility stay, and introduce variability across providers. Thus, we appreciate CMS avoiding the inclusion of such costs in the episode. However, practically, we believe CMS’ proposed definition with actually pull in some services provided within 72 hours of admission as inpatient claims include outpatient services provided within this window. We support the anchor hospitalization as the trigger for and start of the episode duration.

Beneficiary Care Inclusion CriteriaCMS also notes that episodes would include only those in which care is furnished to beneficiaries who meet all of the following criteria upon admission to the anchor hospitalization:

(1) the beneficiary is enrolled in Medicare Parts A and Part B; (2) the beneficiary’s eligibility for Medicare is not on the basis of end stage renal disease; (3) the beneficiary is not enrolled in any managed care plan;


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(4) the beneficiary is not covered under a United Mine Workers of America health care plan; and

(5) Medicare is the primary payer.

These Premier healthcare alliance supports these criteria that are both reasonable and consistent with other programs.

Middle of the EpisodeThe episode would be cancelled and not included in the determination of the net payment reconciliation amount (NPRA) if the beneficiary:

(1) ceases to meet the beneficiary criteria above; (2) is readmitted to any participant hospital during the episode for another anchor

hospitalization; (3) initiates an LEJR episode under BPCI; or (4) dies during the anchor hospitalization.

CMS explains that when an episode is cancelled, the services furnished to beneficiaries prior to and following the cancellation would continue to be paid by Medicare as usual but CMS would not calculate actual episode spending that would otherwise under CCJR be reconciled against the target price for the beneficiary’s care. We support cancelling the episodes and removing them from the calculations when a beneficiary’s status changes, the beneficiary is readmitted for another LEJR procedure or dies during the episode. However, as discussed in other areas of this letter, we have concerns about BPCI episodes trumping CCJR episodes. And, further note that CMS was not clear whether BPCI episodes, such as cardiac procedures, will trump CCJR LEJR procedures. As noted in the waivers section of the letter, we do support the continued application of the waivers if an episode is cancelled for any of these reasons.

End of the EpisodeThe episode would end 90 calendar days after discharge from the anchor hospitalization. CMS cites the literature suggesting readmissions remain elevated from 30 through 90 days post-hospital discharge, their own analyses of complications and non-CMS tests to justify 90-days post discharge. Premier believes that 90 days is the most clinically appropriate length and enhances the commitment to caring for patients over time. This duration is sufficiently long so as to capture many complications and engage multiple providers in inpatient, outpatient, and post-acute care settings. This duration also moves providers closer to achieving long-term population health management, one of the main aims of risk-based models such as ACOs and full capitation. This also matches the length of the complication quality measure. We also believe it is important to select an episode-length that can be applied across multiple conditions for comparability and operation ease, which favors a longer episode rather than a shorter one. We believe CMS should


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implement a 90-day episode. If CMS chooses to provide options in terms of the duration, it should introduce a lower discount for those willing to take the longer episodes as is the case in BPCI.

PAYMENT MECHANISMS

Retrospective Payment

Premier supports CMS’s proposal to utilize a retrospective reconciliation methodology under CCJR. As evidenced by the poor uptake of BPCI Model 4, few providers are ready to assume the role of a third party administrator that is capable of distributing payments to all providers involved in the care of a patient in a prospectively paid bundle.

Performance Years

The proposed rule would establish 5 performance years for the CCJR model based on calendar years, beginning January 1, 2016. We support the episodes accruing to the year in which they ended.

Two-sided Risk Model

CMS proposes to adopt a two-sided risk model in CCJR that ultimately requires a 2 percent discount be provided to CMS up front. However, in year 1 CMS proposes to eliminate downside risk. CMS would phase in repayment responsibility beginning with performance year 2, with hospitals fully responsible for excess spending in performance years 3 through 5. As seen in BPCI, the first year of the program will likely be marked with challenges for both the participants and CMS. The Premier healthcare alliance supports the phase in of risk under a mandatory bundling program.

Fundamentally, however, Premier prefers a model that allows for first dollar shared savings with Medicare. The current discount methodology employed by CMS as part of BPCI guarantees CMS the initial savings even though the providers are investing the capital in the care redesign. If CMS shares savings with providers early on it will allow providers to use these funds to reinvest in additional changes to reduce spending and improve quality even further. We recommend that CMS alter the proposal to reflect a shared risk model whereby the providers would share both gains and losses with the government on a 50/50 basis. This would significantly reduce the financial risk associated with random episode cost variation, but it


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would be budget neutral for CMS. This option would be particularly attractive to smaller organizations with lower episode volumes that face a higher risk of random episode cost variation and those with limited financial reserves that might not otherwise consider BPCI.

Payment Adjustments

CMS proposes to make three adjustments to Medicare Part A and Part B payments accumulated in the CCJR episodes:

1) to account for special payment provisions under existing Medicare payment systems; 2) to adjust payment for services that straddle the end of an episode; and 3) for high payment episodes.

CMS also would make adjustments to account for overlaps with other Innovation Center models and CMS programs, as discussed later in this summary. CMS does not propose to adjust hospital-specific or regional components of target prices for any Medicare repayment or reconciliation payments made under the CCJR model, nor would these payments be included per the proposed episode definition. These are discussed below in the order in which they are used in the target price setting methodology.

Special Payment ProvisionsWe concur with CMS that special payment provisions under Medicare should not be included in the episode as this will cause hospitals with teaching missions or significant uninsured populations to look relatively costlier. The Premier healthcare alliance strongly supports CMS’s proposal to exclude special Medicare payment provisions, such as the indirect medical education adjustment (IME) and disproportionate share hospital payments, from target price and performance period spending calculations.

ProrationTo the extent that a Medicare payment for included services spans a period of care that extends beyond the episode duration, CMS proposes to prorate them. This method has worked well in BPCI and keeps the episodes comparable across providers. It also avoids any additional incentive to push care outside the episode window. Thus, we support the proration of services at the end of an episode.

High Payment Episodes


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Premier supports CMS’ proposal to apply a ceiling to high episode payments by capping payments at two standard deviations above the regional mean. Similarly structured risk tracks represent a helpful risk mitigation tool under BPCI.

Reconciliation Payments and RepaymentsCMS proposes that target prices would not include Medicare repayments or reconciliation payments. This would mean that CCJR savings realized in the first year of the program would not be incorporated into target prices for years 3 through 5 when the target price is rebased to include claims data from later years. This policy is inconsistent with rebasing methodologies utilized under other alternative payment models. For example, the Medicare Shared Savings Program (MSSP) Final Rule provided for a rebasing methodology that would account for savings generated by accountable care organizations (ACOs) during the previous performance period. This provision slows “the race to the bottom”, in which efficient providers see their target price continuously decrease to a point where patient safety is at risk and identifiable efficiencies are greatly diminished. Premier encourages CMS to utilize a similar rebasing methodology in CCJR to provide a fair and sustainable target price for providers.

Target Setting

CMS proposes to establish multiple CCJR target prices for each participant hospital based on three years of historical Medicare payment data grouped into episodes of care. CMS would apply Medicare payment system updates (for example, IPPS, OPPS, IRF PPS, SNF PPS, PFS, etc.) to the historical episode data. The specific set of 3 historical years used would be updated every other performance year. With each rebasing, CMS makes it increasingly harder for hospitals to beat their target and provide the required discount to Medicare. Thus, we support CMS rebasing every other year.

Different target prices would be created: 1) for episodes anchored by MS-DRG 469 versus MS-DRG 470; 2) for episodes beginning in two different time periods each performance year in order to

account for annual pricing updates occurring on fiscal year or calendar year basis; and 3) for whether a hospital successfully submits data on the voluntary patient-reported

outcome measure.

Because of the lower volume in DRG 469, we support CMS’ methodology of combining the cases and then applying an adjustment for the relationship between the prices of each DRG. However, as raised in the exclusions section, we do not believe that replacements as a result of fractures are appropriately factored in as part of the pricing. A shift in the mix of cases from


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baseline to performance could reduce the accuracy of the prices. We recommend CMS either remove fractures from the patient population or price these cases separately.

For episodes beginning in performance year 2, a participant hospital would have 16 target prices, which would include the combinations above but with one set for determining potential reconciliation payments and another for determining potential Medicare repayment amounts, reflecting the lower discount amount applied to target prices for determining potential repayment amounts as part of phasing in two-sided risk. We understand that CMS is breaking up the target prices to most accurately reflect the market basket updates that occur on the federal fiscal year and calendar year. However, we think this is quite confusing and complex for providers to follow 16 target prices. Thus bulk of the updates are made October 1 of each year with the institutional provider updates, while the January updates include the relatively minor increases associated with physician and outpatient departments. If CMS follows a fiscal year cycle, which is consistent with DRG and quality metric changes, and estimates the updates associated with the calendar year, we believe that CMS can reduce the number of target prices it sets. CMS should not split the target prices based on the calendar and fiscal years but rather use one target price with estimated updates across the whole year incorporated and adjust the following year’s target to recoup (or repay) any material misestimation on a rolling basis.

CMS would calculate and communicate episode target prices to participant hospitals prior to the performance period in which they apply. Under BPCI providers have struggled with an ever changing target price. We support advance notification of the prospectively set final target price for the two portions of the year.

Alternative Payment Mechanism

Under MACRA, eligible professionals (EPs) will be able to obtain a 5 percent bonus for a sufficient portion of their revenue flowing through entities in Alternative Payment Models (APMs). Given that this model includes more than “nominal risk,” CMS should deem CCJR as an APM and EPs who are collaborators should be able to count the professional services provided to CCJR patients under the minimum revenue test.

REGIONAL PRICING

CMS proposes to define “region” as one of the nine U.S. Census divisions, as shown in Figure 3 below.


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FIGURE 3: U.S. CENSUS DIVISIONS

The regions chosen by CMS are enormous. Practice patterns and costs from the Mexican border all of the way to the Canadian border in the west are very different. We are concerned that the regions are so large as to be almost meaningless, or tantamount to a national average.

[TBD analysis ongoing]

QUALITY PERFORMANCE

CMS proposes that hospitals must meet a performance measure result threshold on three outcomes measures in order to receive a reconciliation payment if actual spending is less than the target price. CMS also proposes a payment adjustment for hospitals that choose to report a voluntary measure currently in development.

Proposed Quality Measures

CMS proposes three measures for application to the CCCJR model—Hospital-level 30-day, all-cause RSRR following elective primary THA and/or TKA (NQF #1551), Hospital-level RSCR following elective primary THA and/or TKA (NQF #1550), and the HCAHPS Survey measure. We appreciate that CMS selected measures hospitals have experience reporting through the Inpatient Quality Reporting Program. However, we are concerned that the three aforementioned measures are also currently used in in either the Hospital Value-Based Purchasing (VBP)


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Program or the Hospital Readmissions Reduction (HRRP) Program. This is another instance where hospitals have the potential of being penalized multiple times over not attaining a specific measure. Premier urges CMS to remove THA/TKA readmissions and THA/TKA complications from the HRRP and VBP programs if CCJR is implemented. Readmission and Complications MeasuresCMS proposes to use the same 3-year rolling performance periods that are used in the Hospital Inpatient Quality Reporting (HIQR) program; however there are some inconsistencies in the proposed rule. The 2016 HIQR performance period for THA/TKA complications is April 2012- March 2015 and the performance period for THA/TKA readmissions is July 2012- June 2015. While stating alignment with HIQR, the proposed rule indicates that the performance periods in the CCJR model is one year later: April 2013 through March 2016 for THA/TKA complications and July 2013 through June 2016 for THA/TKA readmissions. It is unclear which performance period CMS is proposing. We prefer the performance periods that include a portion of the payment year (i.e. for year one the performance periods that end in 2016) rather than complete alignment with HIQR performance periods. However, we are concerned that the performance periods have little overlap with the payment period; only 8% of the THA/TKA complications measure performance period is attributed to the start of the CCJR model and 16% of the THA/TKA readmissions performance period. Accordingly, the measures are assessing historical performance of a hospital rather than the quality of care delivered in the CCJR model. This will make it difficult to assess if the program is fulfilling its intent. We agree with CMS that the THA/TKA readmissions and THA/TKA complications measures are appropriate; however, for these claims-based measures, CMS should also apply a socio-demographic status (SDS) adjustment as these measures are tied to community factors that are typically outside of the direct control of healthcare providers.

HCAHPSIn scoring the HCAPHS for the CCJR model, CMS proposes to use the scoring method in the HCAHPS star ratings. The performance period will vary from the HIQR performance of one calendar year, the 4 quarters proposed for the CCJR model are July 1, 2015- June 30, 2016, rather than a calendar year. There are no proposed changes to the HCAHPS sampling methodology; accordingly, the HCAHPS results are reflective of the entire hospital population. We appreciate CMS’ effort to incorporate patient experience into the CCJR model; however we have concerns that that HCAHPS results are not reflective of the joint replacement population. We encourage CMS to explore other options for understanding the experience of patients receiving joint replacement. For example, CMS may want to conduct a separate survey (using HCAHPS or surgical CAHPS) of beneficiaries receiving joint replacement in order to determine how the CCJR model impacts beneficiary experience. CMS could develop a sampling


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methodology that will allow results to be attributed to individual hospitals for the purpose of determining eligibility for a reconciliation payment.

Voluntary Measure on Patient-Reported THA/TKA OutcomesCMS proposes an incentive for a voluntary data collection initiative that would support CMS in continuing development of a new measure assessing improvement in patient-reported outcomes following THA/TKA procedures. As the measure is still in development, successful reporting is considered submitting pre-operative and/or post-operative data for 80 percent of procedures performed during the performance period; though in another section of the proposed rule CMS indicates reporting data on 70 percent of procedures performed would be considered successful reporting. The length of the performance period and whether pre-operative or post-operative data is required changes each year of the CCJR model, starting with a 3-month performance period and moving to a one-year performance period and beginning with only pre-operative data and then requiring both pre-operative and post-operative data.

CMS proposes submission of multiple data elements, including: demographic data, admission/discharge dates, PROMIS, VR-12, Knee injury and Osteoarthritis Outcome Score, Hip disability and Osteoarthritis Outcome Score, BMI, Charnley classification, gait, muscle strength, and presence of in-home support. While we understand that measure development requires a broad set of information so that you can determine the most appropriate elements to include in the measure, the proposed data elements are vast and may discourage hospital reporting. We recommend that CMS work to narrow the list of required elements before voluntary submission begins. For example, the PROMIS and VR-12 have similar questions and CMS should choose one survey prior to voluntary submissions. Due to the burden of collection for these data elements we encourage CMS to consider a lower threshold for successful submission. CMS should look to other existing uses of the required data elements to determine a more appropriate threshold. For example, the VR-12 is incorporated into the Medicare Health Outcomes Survey for Medicare Advantage Plans, the survey is collected on only a sample of patients and the response rates are often around 60 percent. For hospitals with a high volume of joint replacements it’s feasible that they would be required to submit VR-12 information for more beneficiaries than a moderate size MA plan. Moreover, hospitals would not have the support of survey vendors who provide multiple touch points with beneficiaries to increase data collection.

Possible Future MeasuresCMS seeks comments on possible future measure topics that may be appropriate for the CCJR model: shared decision-making, use of patient-centered shared care plans, and use of health IT and information exchange. CMS notes that measure development is needed to address shared decision-making and use of patient-centered shared care plans. We believe these are important


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measure concepts that can be difficult to address with currently available data. We encourage CMS to continue measure development in these areas and would be open to approaches that incentivize hospitals to voluntarily submit data that will assist in measure development. With regard to use of health IT and information exchange, CMS requests input on how to potentially add a measure related to health IT. Specifically CMS inquires about a measure of successful attestation as part of the EHR Incentive Program, including a measure specific to the ability of hospitals to conduct electronic care coordination, and other measures that could assess hospitals on the use of interoperable health information. We do not believe it is appropriate to assess use of health IT in the CCJR model as it creates duplicate penalties; hospitals participating in the CCJR model also participate in HIQR, which now requires submission of eCQMs, and the EHR Incentive Program. Rather than devote resources to measurement of the use of health IT for one condition, CMS should continue to incentive hospitals to adopt health IT through hospital-wide programs such as Meaningful Use. Moreover, hospitals should not be assessed on interoperability because it is controlled by EHR vendors, interoperability is best addressed through CERHT standards.

Methodology to Link Quality and Payment

Required Measures Beginning in payment year 1 and continuing in each year of the model, CMS proposes that, in addition to requiring that hospitals achieve actual episode spending below the target price, reconciliation payments would only be made to CCJR hospitals that meet or exceed a minimum performance threshold on each of three specified measures. CMS proposes that hospitals would only be eligible for reconciliation payments in performance years 1 through 3 if they meet or exceed a threshold set to equal the 30th percentile of the national hospital measure results calculated for all IQR Program hospitals. Specifically, a hospital that met or exceeded this 30th percentile threshold for each of the three required measures for the performance period would be eligible for reconciliation payments during these years if it also achieved actual episode spending below the target price. In performance years 4 and 5, the threshold would be changed to equal the 40th percentile.

We have concerns with the proposed methodology, primarily because using a point estimate to calculate percentiles is not appropriate for the THA/TKA readmissions and THA/TKA complications measures. The measures are a ratio comparing observed to expected, where expected is based on the national performance. An individual hospitals performance should be assessed within confidence intervals, as the measure was originally specified, tested, and endorsed by the NQF. When using a point estimate to determine percentiles, there is not a statistically significant difference in the performance of hospitals at the 50th percentile and the


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30th percentile. As indicated by data available on Hospital Compare, for HIQR performance in FY 2015 the vast majority (approximately 97 percent) of hospitals were no different than the national rate for THA/TKA complications and THA/TKA readmissions, with less than 2 percent of hospitals as worse than the national rate. Moreover, an analysis by American Hospital Association (AHA) shows that nationally there is only a 1.6 percentage point difference between the 10th and 90th percentile of performance for both the complications and readmissions measures. The difference in performance between the 20th percentile, which would be ineligible for reconciliation payments, and the 30th percentile, which would qualify for reconciliation payments, is 0.2 percentage points for the complications measure and 0.3 percentage points for the readmissions measure. The CCJR proposed methodology would arbitrarily assign hospitals with similar performance to the eligible for reconciliation payment and ineligible for reconciliation payment categories as approximately 50 percent of hospitals score below the 30th percentile on at least one of the measures proposed for use in the CCJR model. While the Affordable Care Act statutory requirements necessitate that point estimates be used to calculate hospital performance under the Hospital Readmissions Reduction Program (HRRP), no such requirement exists for the CCJR Program. Performance should be placed into one of three buckets: “no different than the national rate,” “better than the national rate,” or “worse than the national rate.” Hospitals who are “no different than the national rate” or “better than the national rate” should automatically be deemed eligible for a reconciliation payment.

Finally, a three year rolling average performance period means that it is hard for hospitals to demonstrate improvement. As noted earlier, performance has very little overlap with the payment year so hospitals are not truly assessed on performance within the CCJR model. Recognizing the difficulty in demonstrating improvement and the fact that hospitals are being judged on performance preceding the CCJR model, we believe hospitals must be given more time to implement quality improvement strategies before they are held accountable. Accordingly, we suggest that all hospitals who achieve savings beyond the discounted target price should receive a reconciliation payment so that they can reinvest in quality improvement. Rather than exclude hospitals who perform “worse than the national rate” from savings pools, CMS should ensure they are improving by allowing them to achieve savings and simultaneously requiring a corrective action plan. Hospitals who undertake a corrective action plan should be provided with technical assistance and should be monitored for improvement. Savings could be linked to investment in the necessary tools to achieve greater improvements in subsequent performance years. This would not create undue burden for CMS as less than 2 percent of hospitals were worse than the national average for THA/TKA complications and THA/TKA


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readmissions in FY 2015 HIQR performance. It is feasible that only a few hospitals will achieve a savings and have performance that is worse than average.

Voluntary Patient Reported Outcome MeasuresCMS proposes that hospitals successfully submitting the THA/TKA voluntary data would receive an adjustment of 0.3 percentage points on the target price used to determine the hospital’s reconciliation and repayment amounts. That is, in performance years 3 through 5 (when hospitals have full repayment responsibility), instead of the proposed 2.0 percent discount, CMS would apply a 1.7 percent discount to the target prices to which actual expenditures are compared. The Premier health alliance applauds CMS’ efforts to develop patient reported outcome measures and incentive hospitals to participate in voluntary data collection and field testing. As previously noted, CMS should consider a lower threshold for successful data submission; the threshold should be determined on similar measure development efforts and the minimum amount of data needed to determine reliability and validity for the measure.

LIMITATION ON FINANCIAL RESPONSIBILITY

Limit on Repayment Amounts and Reconciliation Payments

Hospitals participating in CCJR would begin to bear repayment responsibility beginning in performance year 2 for those episodes where actual episode expenditures are greater than the target price up to the level of the regional episode ceiling, a cap set at two standard deviations above the mean regional episode payment. To provide additional protection to participant hospitals, CMS proposes to limit the repayment amount for performance year 2, to no more than 10 percent of the hospital’s target price for the anchor MS-DRG multiplied by the number of the hospital’s CCJR episodes anchored by that MS-DRG during the performance year, for each anchor MS-DRG in the model. For performance years 3 through 5, CMS proposes to set this “stop-loss” limit to 20 percent. Parallel caps would be set for reconciliation payments. Given that CCJR is a mandatory program with little notice to providers, we believe a stop loss is warranted. The Premier healthcare alliance supports the proposed limits on repayments.

Risk Limitation for Rural DesignationsCMS proposes additional protections for certain groups of hospitals that may have a lower risk tolerance and less infrastructure and support to achieve efficiencies for high payment episodes. For rural hospitals, SCHs, Medicare Dependent Hospitals (MDHs) and Rural Referral Centers (RCCs), CMS proposes a stop-loss limit of 3 percent of episode payments in performance year 2 and a stop-loss limit of 5 percent of episode payments for performance years 3 through 5. We


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agree with CMS that these categories of hospitals often have special payment protections or additional payment benefits under Medicare due to the importance of preserving Medicare beneficiaries’ access to care from these hospitals. In addition to implementing a 100 episode minimum to participate in the program, we support the application of tighter risk limitations for these vulnerable providers.

APPEAL PROCEDURES

CMS proposes to establish an appeals process for matters in dispute under the CCJR model related to reconciliation and payment. The appeals process would be a two-step process for payment matters consisting of the submission to CMS of a calculation error form by a participating hospital and reconsideration review conducted by a CMS official. We appreciate CMS beginning to flesh out an appeal procedure, but believe that 30-days to identify errors may not be enough. More than once during the BPCI initiative stakeholders have identified calculation errors by triangulating problems across organizations, but such errors cannot always be found that quickly given that stakeholders do not have the full claims set that CMS does. CMS should have a process, with a longer time-frame, for major calculation issues applicable to multiple providers that are not caught immediately.

FINANCIAL ARRANGEMENTS

In order to articulate the requirements applicable to financial arrangements, CMS proposes to define certain key terms applicable to the CCJR model that are similar to BPCI.

CMS defines CCJR collaborator as one of the following individuals or entities that enter into a CCJR sharing arrangement: skilled nursing facility (SNF), home health agency (HHA), long-term care hospital (LTCH), inpatient rehabilitation facility (IRF), physician, non-physician practitioner (NPP), outpatient therapy provider, and physician group practice. Physician assistants, nurse practitioners and others are key team members in the care transformation that bundlers are undertaking. CMS could consider aligning this list with the eligible professionals under MACRA. The Premier healthcare alliance supports the inclusion of non-physician practitioners to the list of collaborators with whom a bundler can gainshare.

CMS defines a gainsharing payment as a payment from a participant hospital to a CCJR collaborator, under a CCJR sharing arrangement, composed of only reconciliation payments, internal cost savings, or both. In years in which the facility may not achieve the requisite financial discount, the hospitals may still want to provide incentive payments to physicians who


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individually have shown quality improvement and cost savings to encourage continued high performance. Premier supports the inclusion of both shared savings and internal cost savings.

CMS emphasizes that CCJR sharing arrangements must be solely related to contributions of CCJR collaborators to care redesign that achieve quality and efficiency improvements; that CCJR collaborators must furnish services included in the episode to the CCJR beneficiary to be eligible for gainsharing or alignment payments; and that gainsharing and alignment payments must be proportionally related to CCJR beneficiary care. Premier has gainsharing model we employ with our members in BPCI that we believe meets all of these criteria. However, since CMS does not plan to collect this information and approve it, we are not clear how the hospitals would know if the model was not sufficient in the eyes of either CMS or OIG. Hospitals need some mechanism to ask questions. For instance, the proposed rule specifically says you may not condition payments on the volume or value of referrals or other business generated from the parties, yet the rule also says that the payments must be proportional to the care provided. CMS and OIG should develop a process, short of an Advisory Opinion, for participants to ask concrete questions of the agencies.

BENEFICIARY INCENTIVES

CMS proposes to permit participating hospitals (not CCJR collaborators) to provide “in-kind patient engagement incentives” to beneficiaries in CCJR episodes for free or below fair market value, subject to the following conditions:

1. The incentive must be provided to the beneficiary during a CCJR episode of care. 2. The item or service provided must be reasonably connected to the beneficiary's medical

care and engage the beneficiary in better managing his or her own health. 3. The item or service must be a preventive care item or service or an item or service that

advances one of the following clinical goals: a. Beneficiary adherence to drug regimens. b. Beneficiary adherence to a follow-up care plan. c. Reduction of readmissions and complications resulting from LEJR procedures. d. Management of chronic diseases and conditions that may be affected by the LEJR

procedure. We appreciate that CMS has slightly modified these requirements from the MSSP by adding “a” and “b” and removing the “adherence to a treatment regime” language. We believe these small


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changes will provide more opportunities to engage with beneficiaries to improve their care. However, we note that the beneficiary incentives are not well utilized under MSSP for fear of running afoul of the rules. As discussed in the waiver section, a process to ask CMS and OIG questions short of an advisory opinion would be helpful for the smooth program operations and effective patient engagement.

CMS also proposes that participant hospitals maintain contemporaneous documentation of beneficiary incentives that exceed $10 and include the date the incentive is provided as well as the identity of the beneficiary to whom it was provided. Documentation of all items over $10 will be onerous on providers for items of little value. To our knowledge there is no such documentation requirement in MSSP and are not clear why it is necessary in CCJR. We suggest that CMS increase the threshold for items requiring contemporaneous documentation to $50.

Finally, CMS proposes to permit a participating hospital to provide items of technology to a beneficiary if the value of the technology does not exceed $1,000 for any one beneficiary in any one CCJR episode and if the hospital retains ownership of the technology where the cost of the technology exceeds $50. The hospital would have to retrieve the technology from the beneficiary at the end of the CCJR episode and maintain documentation of the date of retrieval. We understand CMS’ concern about providing items of such value to beneficiaries. However, we are concerned that providers may have difficulty obtaining the items even after a good faith effort. CMS should consider allowing providers to document attempts to retrieve technologies from beneficiaries if it is unable to retrieve the items.

PAYMENT AND LEGAL WAIVERS

Proposed Waivers

CMS proposes to waive certain Medicare program rules in order to test the CCJR model; specifically, it proposes to waive the direct supervision requirement for certain post-discharge home visits, certain telehealth requirements, the SNF 3-day rule, and certain post-operative billing restrictions. We agree with CMS that these waivers are justified in light of the model requirements for hospitals to bear financial responsibility for Medicare spending for an episode of care. We support all of the proposed waivers of Medicare program rules, but suggest revisions and additions.


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For example, the three-day hospital stay for skilled nursing facility (SNF) payment waiver under CCJR would require that beneficiaries must be discharged to a SNF with a three star or higher rating under the Five-Star Quality Rating System for SNFs, whereas BPCI program rules only require that the majority of patients be discharged to a SNF that meets this criteria. We are concerned, however, in some areas there may not be sufficient availability of SNFs with three stars or better, or sufficient capacity at those facilities. Moreover, the beneficiaries remain in control of which facilities they chose. CMS consider accommodation for the use of the SNF waiver in areas with low availability of three star or greater rated facilities.

In terms of the application of the payment waivers, we believe there is a fatal flaw in the current system within BPCI that CMS seeks to correct in CCJR. Given the BPCI design, a beneficiary may be treated as part of a bundle that is subsequently rescinded. For example, if a patient has one hip replaced and a few weeks later has the other hip replaced, the first hip bundle is nullified and the second hip bundle is activated. This means that a provider who uses the three-day stay waiver as part of the first hip loses that waiver protection and the beneficiary is responsible for the SNF stay. Another example is when the CMS beneficiary eligibility files lag and it is later discovered that the beneficiary is no longer eligible for BPCI (e.g., the beneficiary has moved to Medicare Advantage or become eligible under the ESRD benefit). We strongly support CMS’ proposal that if the bundler uses a waiver in good faith for LEJR patient and the episode is later canceled, the waiver still applies.

Additional Payment Waivers

We believe that the payment waivers that CMS proposed to apply within the Medicare Shared Savings Program (MSSP) for those providers who take risk should apply to the CCJR program. Similarly to MSSP, these organizations have both financial incentives and quality measurement thresholds that hold them accountable for the overall cost and outcomes associated with the episode. Thus, there is less risk that the payment waivers will result in increased spending or poorer outcomes. Specifically, we urge CMS to finalize the following waivers for a bundled payment expansion:

1) Hospital discharge planning requirements that prohibit hospitals from specifying or otherwise limiting the information provided on post-hospital services;

2) The skilled-nursing facility (SNF) three-day stay rule, which requires Medicare beneficiaries to have a prior inpatient stay of no fewer than three consecutive days to be eligible for Medicare coverage of inpatient SNF care;


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3) Medicare requirements for payment of telehealth services, such as limitations on the geographic area and provider setting in which these services may be received, for a broader group of services; and

4) The homebound requirement for home health, which requires that a Medicare beneficiary be confined to the home to receive coverage for home health services.

In the spirit of increasing flexibility for care options, Premier supports the inclusion of the waiver of the Inpatient Rehabilitation Facility (IRF) PPS “60 percent rule.” The rule requires that at least 60 percent of all the IRFs patients (Medicare and non-Medicare) must have conditions or diagnoses that fall within a list of 13 specific diagnostic categories, either as a primary diagnosis or as a qualifying comorbidity.1 We believe the 60 percent rule should be waived given the expected decrease in the volume of patients referred to an IRF. The rule itself is designed to control for inappropriate cases in FFS Medicare being treated at IRFs: BPCI participants have no incentive to over-use or inappropriately direct patients to IRFs, but may find good clinical rationale for short stays at IRFs for some patients, especially the ability to return beneficiaries to their communities more quickly.

Payment and coverage rules restricting the efficient transfer and admission of the beneficiaries to post-acute care settings, such as the inpatient post-acute care transfer policy should be waived. CCJR participants should have maximum flexibility to identify and place beneficiaries in the appropriate clinical setting that best serves their short- and long-term recovery goals. In addition, payments are reduced for LTCHs that exceed established percentage thresholds for patients admitted from certain referring hospitals during a cost reporting period.2 Payment adjustments specific to the traditional FFS system like the “25 percent rule” for LTCHs have little relevance to the CCJR or its participants, which do not require the safeguards or control mechanisms the payment rule otherwise provides in traditional FFS. CCJR participants should be able to freely access the LTCH setting for their beneficiaries, for short-, mid- or long-range stays, regardless of traditional FFS payment policies that may prevent it.

Legal Waivers

CMS notes it may be required to waive provisions of the fraud and abuse laws (e.g., the CMP law, Federal Anti-kickback statute, and the physician self-referral law) if an arrangement or agreement under the model would not be protected under an existing exception or safe harbor under those laws. CMS suggests it will determine whether waivers are required as the model

1 See Medicare, Medicaid, and SCHIP Extension Act (“MMSEA”) 2007 (Pub. Law No. 110-173); 42 C.F.R. §412.23(b).2 See 42 C.F.R. §412.534; 42 C.F.R. §412.536; MMSEA §114(c); 42 C.F.R. §412.23(e)(6)-(7).


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develops. We urge CMS to develop legal waivers with the relevant federal agencies before the program starts. Below we make recommendations for waivers we believe are necessary and appropriate for this program.

Patient IncentivesWe also believe that the Beneficiary Inducements Civil Monetary Penalty3 and the Federal Anti-Kickback Statute should be waived to permit BPCI participants to provide items and services to beneficiaries for free or less than fair market value, as part of care received under the BPCI and as part of a treatment goal such as prevention or adherence to a treatment regimen. For example, under such a waiver, a beneficiary being treated under the BPCI could receive an electronic device to access a BPCI organization’s electronic platform to conduct activities including scheduling follow-up appointments, uploading their biometric data, receiving medication updates, and submitting questions or concerns. A waiver addressing patient incentives has also been promulgated as part of the Medicare Shared Savings Program.4 Premier supports consideration within MSSP and the Next Generation ACO Model, and the president’s FY 2016 proposed budget to waive the primary care copays. This would encourage beneficiaries within a bundle to seek the appropriate follow-up care that would not only help reduce readmissions, but also allow patients to be discharged to a lower level of post-discharge care.

Pre-Admission Home Evaluation ServicesHHAs are prohibited from performing free pre-operative home safety assessments for patients scheduled to undergo surgery.5 A waiver of this policy would result in more informed post-acute care plans, a decreased likelihood of falls and readmissions, and a more patient-centered care plan. HHAs are especially adept at working with clinicians to assess the patient’s care needs, including his or her ambulatory limits or other functional impairments, and should not be prevented, under the BPCI, from working collaboratively to generate a care plan at the pre-admission stage that helps transition the beneficiary to the lower cost community-based setting.

Transition PlanningAdditionally, we believe the Federal Anti-Kickback Statute should be waived to allow BPCI participants, including, without limitation, home health providers, to assist with discharge planning for beneficiaries and coordinate care transitions. For instance, better transition planning, in particular the assessment of readiness for in-home care services or other lower cost settings, is critical to the success of this population, since patients prefer to recover in their communities, 3 See SSA § 1128A(a)(5).4 76 Fed. Reg. 67992.5 See U.S. Dept. Health and Human Services-Office of Inspector General (“HHS-OIG”) Advisory Opinion No. 06-01, March 27, 2006; concluding that performing these assessments potentially generates prohibited remuneration under the Anti-Kickback Statute.


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and to BPCI participants, who are best positioned, along with discharge planners and patient’s families, to help identify the most clinically appropriate and cost-effective post-hospital setting for the patient. Current restrictions that prevent active coordination in transition planning obstruct the BPCI’s goals of ensuring that patients are discharged to the setting that best suits their needs.

DATA SHARING

CMS proposes to make baseline data available to CCJR hospitals: No sooner than 60 days after the effective date of the model. Within 60 days of CMS’ receipt of a request from a participating hospital. (The time,

form, and manner of such requests will be announced at a later date.) For a 3-year period.

We appreciate that CMS will provide historical data, which we believe is key to organizations being able to run their own analyses on their baseline performance and their target prices for financial planning, identification of high-risk patients for intervention and other purposes. However, providing the data after the start of the program is untenable. The fact that the first year carries no downside risk does not diminish the need for access to data in advance of the CCJR performance period. It is unreasonable to mandate that hospitals enter a risk-based bundled payment program without advanced access to claims data. CMS should provide these data 6 months in advance of the program start and target price data at least 60-days in advance of the performance year.

For hospitals that request it, summary data reports or claim and claim line feed (CCLF) files will be made available for both a baseline period, and on a quarterly basis during a hospital’s performance period. CMS should make both forms available to participants and make the ongoing updates available monthly.

The reports or CCLF files will include all expenditures and claims for an LEJR episode for all care covered under Medicare Parts A and B within the 90 days after discharge for those beneficiaries whose anchor diagnosis at discharge was either MS DRG 469 or 470. In terms of the contents of the CCLF files. At minimum, CMS should make available what is currently provided to BPCI participants plus hospice care if it is included in the episode. We urge CMS to also provide 90 days prior to an index admission so that hospitals can analyze care changes


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and their ultimate effects on LEJR spending and quality in relation to the patient risk coming into the episode.

Substance Use Data

For both formats, beneficiary information that is subject to regulations regarding the confidentiality of alcohol and drug abuse patient records would not be included in any beneficiary identifiable claims data shared with a hospital under this proposal. CMS currently does not provide data related to substance use diagnoses (primary or secondary codes) and services in the monthly CCLF files. While we understand the sensitivity of such services and CMS’s exclusion of them in the files, we think there are options that would provide bundlers with more information, but not risk beneficiary privacy by suppressing identifiable elements. We therefore urge CMS to provide the de-identified cost and claim data for these services. If this is not possible, at minimum, CMS should provide the aggregate payment amount of these services in the monthly CCLF files.

Aggregate Regional Data

CMS states that data aggregated to the census region in which the participating hospital is located will also be made available. Because the hospital’s target price will be calculated based on a blend of its own experience with that of all other hospitals in a region, CMS will provide high-level information on the average episode spending for MS-DRGs 469 and 470 for the region in which the participant hospital is located. The Premier healthcare alliance believes the aggregate regional data should include at least the following broken down by MS-DRG:

1) Total normalized episode expenditures;2) Normalized episode expenditures within cost categories (anchor inpatient, SNF, HHA,

IRF, LTCH Readmissions, professional services, other);3) Variability metrics related to the total normalized episode expenditures (standard

deviation, 95th percentile, 99th percentile, etc);4) Episode counts;5) Variability metrics surrounding episode counts (what is the mean number of episodes at a

hospital in the region, the standard deviation, the 95th or 99th percentile, etc);6) Utilization percentages for key services (what percentage of episodes had SNF

utilization, IRF, LTCH, HHA, readmissions); and7) Percentage of episodes that were non-elective (for example, using the quality metric

specification exclusions methodology).

Data Opt- Out


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CMS proposes to provide an ability to “opt-out” of data sharing. The MSSP utilized an opt-out procedure for its first three program years that has yielded very low opt-out rates (less than 3 percent). We do not believe CMS is under any legal obligation to provide beneficiaries with a data opt-out option. A major difference between the MSSP and CCJR is that beneficiaries have essentially no way to opt-out of the program short of traveling what is likely long distance outside their MSA. Given that the beneficiaries are going to be subject to the program either way, the providers should have access to their data as part of healthcare operations to ensure the best care possible. Moreover, the receipt of the data is under a data use agreement that come with federal criminal penalties that should suffice to discourage misuse of the data. We urge CMS to reconsider its proposal to implement a data-opt out as part of this mandatory program.

MONITORING AND BENEFICIARY PROTECTION

CMS proposes a set of safeguards for beneficiaries as the CCJR model design could provide incentives for providers to direct beneficiaries into care pathways that save money at the expense of beneficiary outcomes. The protections include beneficiary notification of the program and monitoring claims data. To effectively engage beneficiaries we believe providers should be able to share who their network “collaborators” are and their quality scores. Providers would still explain to beneficiaries that they retain their freedom to choose whichever providers and services they wish. But, we believe this added information will help ensure beneficiaries seek care from organizations from high value organizations and specifically nursing homes with three stars or more on Nursing Home Compare as is required for use of the 3-day stay waiver. CMS should allow hospitals to share with beneficiaries which post-acute care are “collaborators.”

CMS Monitoring of claims data from participants tracking access to care, quality of care, and delayed care, but does not explain how it plans to do so. The payment model calls for an adjustment against savings when there are certain post-episode payments occurring in the 30-day window subsequent to the end of the 90-day episode, but is not clear when or how these adjustments will be applied. We support monitoring for unintended consequences, especially given the speed at which the program is being implemented; however, we believe CMS should be more transparent about its methods.

EVALUATION APPROACH

CMS proposes an evaluation approach like those undertaken with other projects. In addition to the use of existing secondary sources of data including Medicare FFS claims, CMS is considering:


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Administering a survey of beneficiaries who received an LEJR during the performance period;

Conducting guided interviews with providers furnishing services to beneficiaries under the CCJR model; and

Employing a contractor to conduct site visits with selected hospitals, PAC providers, and focus groups.

The evaluation process for BPCI has been somewhat onerous and distracting to participants. Each month they have to key in information on a website such as the volume of cases, however, CMS already has this information. The in-person interviews were restricted to the physicians practicing at the sites even if the Awardee was the hospital system, which did not foster the collaborative type of environment our sites seek to encourage and may have led to an apples to oranges comparison with physician-lead organizations. In addition, CMS instructed BPCI participants to cease surveying beneficiaries to avoid multiple surveys, but this hampered the bundlers’ ability to seek real-time feedback to improve care. CMS should seek to implement an evaluation process that is least disruptive to participants (providers and beneficiaries) and incorporate lessons learned from BPCI participants into the development process.

CONCLUSION

In closing, the Premier healthcare alliance appreciates the opportunity to submit these comments on the CY 2016 CCJR proposed rule. If you have any questions regarding our comments or need more information, please contact Danielle Lloyd, VP, policy & advocacy and deputy director, DC office, at [email protected] or 202.879.8002.

Sincerely,

Blair ChildsSenior vice president, public affairsPremier, Inc.

mailto:[email protected]

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