Comprehensive Care for Joint Replacement (CJR)

Reconciling Payments

Payment Reconciliation Summary

Retrospective reconciliation

• After each CJR performance year, CMS will perform a retrospective reconciliation of CJR episode spending compared to the target prices by calculating the Net Payment Reconciliation Amount (NPRA).• The NPRA is the sum of the amounts above

and below the target price for each CJR episode in the performance period.

Above and below zero

• If the final NPRA is below zero, that amount is paid to the hospital as a “reconciliation payment” as long as the hospital meets the minimum composite quality score previously discussed. • If the NPRA is above zero, that

amount is owed to CMS by the hospital as a “repayment amount.”

Performance years

• Hospitals will not be responsible for any repayment amount due for the first performance year, but may earn reconciliation payments for all performance years.

Part A and B payments

• CMS will review the spending for all Part A and B payments (including unrelated spending that would otherwise be excluded based on the exclusion lists) for the 30 days after the 90 day post-discharge period of the CJR episode ends.

• CMS wants to be sure services aren’t being delayed in order to be excluded from CJR episode spending calculations.

Excess deviations

• If a hospital’s CJR episodes have an average 30-day post-episode spending greater than three standard deviations from the regional mean, the excess amount calculated would either reduce the hospital’s reconciliation payment amount or increase the repayment amount, subject to the stop-loss.

Prorated payments

• The post-episode spending calculation includes prorated payments for services begun during the CJR episode and continuing beyond the episode. • This component of the reconciliation

begins in the second performance year.

Medicare Admin. Contractors

• The MACs will handle all reconciliation payment and repayment transactions. All normal Part A and B billing and payments continue during the course of the CJR episode. • If a hospital does not make a required

repayment, CMS may direct the MAC to deduct it from other Medicare payments due to the hospital.

Double payments

• CMS wants to minimize the double payment of savings to hospitals involved in other bundled payment models. For example, if a CJR episode includes treatment via an ACO, the CJR hospital will receive the savings.

Financial adjustments

• CMS has also implemented a number of other financial adjustments to ensure that only one entity receives the savings from a single incident of care.

NPRA calculations

• During the second calendar quarter of the year following the performance year, CMS will perform an initial NPRA calculation using two months of claims run-out after the end of the performance year to calculate reconciliation payments and repayments.

Final claims run-out

• The performance year’s NPRA is recalculated fourteen months after the end of the performance year using claims data available at that time, to account for final claims run-out and any overlap between the CJR model and other CMS models and programs.

Applied adjustments

• Any adjustments related to new and updated claims, appeals and participation in other shared savings programs would be applied to the subsequent performance year’s NPRA.

How The NPRA Is Calculated

Calculating the NPRA

• The process for calculating the NPRA is as follows:

• First, CMS calculates the raw NPRA by summing the amount of spending above and below the target price for each CJR episode in the performance period.

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Calculating the NPRA

• To protect hospitals against extremely high cost cases, when comparing actual spending to the target prices, payments for episodes are capped at two standard deviations above the regional mean, mirroring the calculation of target prices.

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Calculating the NPRA

• A target price for one performance year may be compared to spending for an episode in the next performance year, since target prices are set based on episode start date and the performance year for an episode is based on the year in which it ends.

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Calculating the NPRA

• Next, CMS applies a stop-loss or stop-gain if needed (as compared to the total of the target prices for the episodes) as follows:

 Performance Year

 Standard Stop Loss

Stop Loss for rural hospitals, SCHs, MDHs and RRCs

1 N/A N/A

2 5% 3%

3 10% 5%

4 20% 5%

5 20% 5%

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Calculating the NPRA

• Recognizing that rural hospitals, SCHs, MDHs and RRCs may face certain economic and operational challenges under the program, CMS is setting a lower stop-loss for these facilities.

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Calculating the NPRA

• For purposes of the CJR program, a rural hospital is either located in a rural MSA or has reclassified to a rural MSA.• Rural hospitals, SCHs, MDHs and

RRCs receive the same stop-gain as other CJR hospitals.

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Performance Year Stop Gain

1 5%

2 5%

3 10%

4 20%

5 20%

Calculating the NPRA

• Finally, after any stop-loss or stop-gain adjustments are made, CMS adjusts the NPRA for any excess post-episode spending.

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To download the full CJR report, click on the image below