Federal health care policymakers have introduced a new proposed rule that would extend the Comprehensive Care for Joint Replacement (CJR) bundled-payment model for an additional three years.

The proposed rule, released last Thursday, would also expand CJR’s reach to outpatient procedures.

Currently, CJR — an area many home health providers have gotten involved with — is scheduled to expire on Dec. 31. However, if the U.S. Centers for Medicare & Medicaid Services (CMS) finalizes its proposal, the model would remain in place through the end of 2023.

CJR is now active in nearly 70 markets across the nation.

Broadly, the model is designed to reduce overall Medicare spending on hip and knee replacements, the most common surgeries for those enrolled in the program. To do so, the model encourages operators along the spectrum — from the hospital to the skilled nursing facility to the home — to curb the entire episodic cost of each patient’s procedure by providing a single retroactive payment for all services incurred during that timeframe.

Under the current iteration of CJR, the episode begins when a patient is admitted to the hospital, though that would change under the proposed rule.

“The proposed rule also proposes to make changes to the definition of a CJR ‘episode’ to include outpatient knee and hip replacements,” CMS wrote in a fact sheet on the new rule. “We are proposing this episode definition change in order to address changes to the inpatient-only (IPO) list that now allow for total knee and total hip replacements to be treated in the outpatient setting.”

In 2014, there were more than 400,000 hip and knee procedures, costing more than $7 billion for the hospitalizations alone, according to CMS.

Since its launch in 2016, much of the savings achieved through the CJR program have come from keeping Medicare beneficiaries out of the skilled nursing facility (SNF) space. In fact, earlier in 2019, Harvard researchers found that CJR cut episodic spending by $1,084 per patient, savings largely tied to sending patients to home health providers instead of SNFs.

“Decreased Medicare spending on hip- and knee-replacement episodes at hospitals in the CJR program was nearly exclusively related to reductions in the use of post-acute care services in skilled nursing facilities and in-patient rehabilitation facilities,” the researchers noted.

A separate 2018 report compiled by the Lewin Group similarly highlighted savings tied to the CJR model, specifically calling out home health saw an estimated relative increase in standardized allowed amounts of $86 for all lower extremity joint replacement patient episodes. Home health saw estimated relative increase in standardized allowed amount of $85 and $43 for elective and fracture episode types, respectively.

CMS’s new proposed rule would also bring a host of changes to the nuts and bolts of CMS’s payment calculations in CJR, reducing the number of reconciliation periods from two to one and basing target pricing for services on the most recent year instead of a three-year average.

Additional reporting by Alex Spanko