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CMS Seeks to Expand Comprehensive Care for Joint Replacement Model to Surgical Hip and Femur Fracture Treatment Episodes

By Alpha Lillstrom Cheng, JD, MA
November 11, 2016

The Centers for Medicare & Medicaid Services (CMS) remains focused on regulations to move away from fee-for-service (FFS) and toward value-based payment systems. The first Comprehensive Care for Joint Replacement (CJR) model was implemented this April. Then on August 2 CMS proposed an expansion of the current CJR bundling provisions for total hip (THA) and knee (TKA) arthroplasty to a model that will include Medicare beneficiaries undergoing surgical hip and femur fractures treatment (SHFFT) episodes.

In 2010, 258,000 people aged 65 and older were admitted to the hospital for hip fractures, with an estimated $20 billion in lifetime cost for all hip fractures in the United States in a single year. In 2013, fracture of the neck of the femur (the most common location for hip fracture) was the eighth most common principal discharge diagnosis for hospitalized Medicare fee-for-service beneficiaries, constituting 2.7 percent of discharges.

CMS argues that by structuring payment around a patient’s total experience of care, in and out of the hospital, bundled payments support better care coordination and ultimately better outcomes for patients. These new models support President Obama’s Administration goal to have 50 percent of traditional Medicare payments flowing through alternative payment models by 2018 (at this time, 30 percent of Medicare payments go through alternative models).


Mechanics of the Model

The same acute care hospitals in the 67 regions selected for last year’s model have been tapped to participate in this proposed expansion. The SHFFT episode of care would begin in the anchor inpatient prospective payment systems (IPPS) hospital where the patient is admitted for surgical hip/femur fracture treatment and would last for 90 days postdischarge. Throughout the year acute care hospitals, providers, and suppliers would be paid for their services according to the usual Medicare FFS payment systems. At the end of the year, however, the actual episode payment (total expenditures for related services under Medicare Parts A and B) would be reconciled against an established episode payment model quality-adjusted target price for the responsible hospital. A participating hospital could either earn a financial reward or be required to repay Medicare for a portion of the costs—depending on the hospital’s quality and cost performance during the episode. Bonus payments would be earned when the needed care met or exceeded quality standards and was delivered for less than the quality-adjusted target price. If costs exceeded the quality-adjusted target price, participating hospitals would be required to repay the difference to Medicare. As in the original CJR, hospitals are able, but not required, to contract with community-based providers to include them in the gainsharing or shared-risk portions of the payment model. Community-based providers would not interact directly with Medicare for this reconciliation process; the hospital would be the bundled payment transaction partner with Medicare.


Hospital Collaboration with Providers and Suppliers

Like the existing CJR model, beneficiaries choose where and with whom to complete their SHFFT rehabilitation. Physical therapists may but are not required to enter into a contractual relationship with the participating hospital in order to provide and be paid for care. While these parameters may seem sufficient at face value, Private Practice Section (PPS) members have experienced the impact of the model’s inadequate incentives for hospitals to refer to and collaborate with community-based outpatient therapy providers.

PPS members have found the CJR collaboration guidelines insufficient for ensuring that nonphysician group practices—such as private practice physical therapy groups—may become collaborating agents with participant hospitals. The current regulations require that “physician, non-physician, and physician group practice CJR collaborators” must directly furnish services to CJR beneficiaries in order to receive Medicare Physician Fee Schedule payment under these financial arrangements. While physician group practices are specifically listed as an eligible CJR collaborator, no mention is made of how to treat nonphysician group practices (such as private practice physical therapists practicing as a group) who desire to contract with participant hospitals as collaborators. Some are interpreting this to mean that only physician group practices may enter into collaborator agreements as a unit, and therefore believe that all nonphysician providers and suppliers are limited to individual collaborator agreements only. Others interpret the regulations to allow for group practice contracts because physical therapy group practices are defined as suppliers, and the CJR regulations empower “providers and suppliers of outpatient therapy” to participate as collaborators. If therapy practice groups were permitted to contract with a hospital as a collaborator, it would be up to the practice group to ensure that financial exchanges with the participating hospital were attributed exclusively to the physical therapists who furnished services directly to CJR beneficiaries.

Consequently, in its comments to CMS on the proposal to expand CJR to SHFFT episodes, the American Physical Therapy Association (APTA) Private Practice Section (PPS) requested that CMS clarify the regulations to explicitly permit nonphysician practice groups to enter into collaborative agreements with participating hospitals. PPS pointed out that “limiting access to individual therapists only and excluding practice groups from collaborative agreements is shortsighted, unfounded and outdated; it also adds an unreasonable and detrimental obstacle for patients to be able to access their choice of providers.”

Beneficiary Choice

One of CMS’s primary goals for implementing bundled payments is to encourage coordination and collaboration among all providers involved in a patient’s care. Even in the hospitals where Medicare beneficiaries must participate in the model, these patients retain the right to obtain health services from any eligible Medicare provider, and the outpatient providers or suppliers need not have a contractual relationship with the originating hospital. However, this expansion of the CJR model to SHFFT episodes still places an unreasonable amount of power in the hands of hospitals, thereby allowing these large facilities to direct patient care in a way that could functionally exclude the use of community-based providers. The model is riddled with weak safeguards which to date have failed to support patients’ freedom of choice of providers. For example, hospitals may not prevent nor restrict beneficiaries to any list of preferred providers, but at the same time they may recommend preferred postdischarge providers to the beneficiary. While hospitals are required to supply Medicare beneficiaries with written information regarding their right to use their provider of choice, hospitals are not required to provide a list of all the local options for postdischarge care.


These requirements have been insufficient to overcome a hospital’s inherent bias to resist referring out-of-system. Some PPS members have reported an up to 30 percent drop in referrals from hospitals participating in the CJR model for THA and TKA. PPS has requested that CMS implement greater safeguards to ensure the inclusion of private practice professionals and outpatient providers who have demonstrated, or can demonstrate, effectiveness and efficiency of care. PPS argued that at minimum, “Beneficiaries should be provided a written list of all of the local providers from whom they can choose to receive their SHFFT rehabilitation therapy.”

The CMS template Beneficiary Notification lists “nursing homes (skilled nursing facilities), home health agencies, inpatient rehabilitation facilities, and long-term care hospitals” as the types of postdischarge providers that a Medicare patient could choose from to complete their necessary rehabilitation; CMS failed to list outpatient physical therapy as an option. PPS pointed out in its comments that this egregious omission could be interpreted by a lay Medicare beneficiary and health care consumer to suggest exclusively residential post–acute care settings and purposefully exclude the option of outpatient physical therapy. The failure to explicitly mention any outpatient rehabilitation therapy setting is a repeat of other areas in the proposed rule where the important contribution of physical therapists goes unrecognized and unmentioned.


CMS is seeking to expand the current CJR model to surgical hip and femur fracture treatment, with the goal of simultaneously achieving cost savings and better care for patients through more coordinated, higher quality care. CMS once again has chosen a hospital-centric model through which to achieve this objective. In its comments to CMS, PPS voiced its strong concerns that the model fails to provide sufficient safeguards to ensure that nonhospital providers and suppliers—particularly those in private practice—are a functional and accessible part of a CJR care team.

Now that we have experienced the first chapter of the CJR model as applied to THA and TKA, it has become clear that a PPS member must be proactive in order to not be negatively impacted by this model. Because the regulations are unclear, PPS has requested clarification from CMS with regard to limitations on physical therapy group practices being able to be collaborating agents with hospitals. While a private practice physical therapist may provide care to patients without entering into a collaborator agreement, it could be beneficial, essential, or desirable to their practice to be a contractual collaborator. Should a physical therapist be interested in engaging with the hospital as a CJR collaborator, please look to the PPS website for tools and a model agreement that has been drafted specifically for PPS members.


1. www.gpo.gov/fdsys/pkg/FR-2015-11-24/pdf/2015-29438.pdf. Published November 24, 2105.

2. Smith et al. Increase in disability prevalence before hip fracture. J Am Geriatr Soc. 2015 Oct; 63(10): 2029–2035.

3. Krumholz HM, Nuti SV, Downing NS, Normand ST, Wang Y. Mortality, hospitalizations, and expenditures for the Medicare population aged 65 years or older, 1999–2013. JAMA. 2015; 314(4):355–365.

4. www.gpo.gov/fdsys/pkg/FR-2015-11-24/pdf/2015-29438.pdf, 73229 Table 4, 73276.

5. Surgical hip/femur fracture treatment (SHFFT) model episodes would be initiated by claims for hip and femur procedures, except major joint, MS-DRGs 480-482.

6. www.gpo.gov/fdsys/pkg/FR-2016-08-02/pdf/2016-17733.pdf, p. 50801.

7. PPS comments to CMS regarding expansion of CJR model to include SHFFT episodes, www.ppsapta.org/userfiles/File/PPS%20Comments%20CMS_CJR%202016%2010%2003.pdf, p. 7.

8. www.gpo.gov/fdsys/pkg/FR-2016-08-02/pdf/2016-17733.pdf, p. 50803.

9. PPS comments to CMS regarding expansion of CJR model to include SHFFT episodes, www.ppsapta.org/userfiles/File/PPS%20Comments%20CMS_CJR%202016%2010%2003.pdf, p. 7.

10. https://innovation.cms.gov/files/x/cjr-beneletter-hospital.pdf.

11. https://innovation.cms.gov/files/x/cjr-beneletter-hospital.pdf.


Alpha Lillstrom Cheng, JD, MA, is a registered federal lobbyist working with Connolly Strategies & Initiatives, which has been retained by PPS. An attorney by training, she provides guidance to companies, nonprofit organizations, and political campaigns. For six years, she served as Senior Policy Advisor and Counsel for Health, Judiciary, and Education issues for Senator Jon Tester (Montana), advising and contributing to the development of the Affordable Care Act, as well as working on issues of election law, privacy, government transparency, and accountability. Alpha has also directed Voter Protection efforts for Senators Bob Casey, Al Franken, Russ Feingold, and Mark Begich. She was Senator Franken’s Policy Director during his first campaign and was hand-picked to be the Recount Director for his eventual 312-vote win in 2009.

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