Mr. Andrew M. Slavitt

September X, 2015

Page 1 of 35

September X, 2015

Acting Administrator

Centers for Medicare & Medicaid Services

U.S. Department of Health and Human Services

Attention: CMS-1632-P

Hubert H. Humphrey Building

200 Independence Avenue, SW

Room 445-G

Washington, DC 20201

Submitted electronically to:

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.

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 rewardhealthcare 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 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.

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 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 Participants

CMS 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 Episodes

We 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 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:

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

CCJR Beneficiary Overlap with BPCI Episodes

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 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.