Attachment W Lower Extremity Joint Replacement LEJR Bundled Payment Model.pdf

Veteran’s Affairs Confidential

Lower Extremity Joint Replacement (LEJR) Bundled

Payment Model

Table of Contents

Lower Extremity Joint Replacement Model Overview

Program Phases & Dependencies

Regions & Provider Participants

Base Episode Pricing

Risk Adjusted Episode Pricing

Quality Gate Measures

Performance Evaluation & Payment

Veteran Identification and Referral Process

Veteran Benefits and Protections

Appendix A: CJR Model Approach to Episode Inclusions/Exclusions

Appendix B: Episode and Performance Calculation Exclusions

Appendix C: Complications for NQF 1550 Numerator Inclusion

Appendix D: Quality Measures and Performance Evaluation

Appendix E: LEJR Bundled Payment Pathway

Appendix F: Stakeholders

References

1.0 Overview: Lower Extremity Joint Replacement Model

The Department of Veteran’s Affairs (VA) will conduct a bundled payment initiative for Veterans who are eligible for an elective lower extremity joint replacement (LEJR) episode.

• Inpatient episodes will be identified by a discharge paid under MS-DRG 470 (Major Hip and Knee

Joint Replacement or Reattachment of Lower Extremity without MCC).

• Outpatient episodes will be identified by the presence of CPT codes CPTs 27437-27447, 27486, 27487, 27130 and 27132 (or any other relevant CPT codes indicating an outpatient LEJR procedure) on a claim.

The episode begins on the day of the anchor procedure (that is, it would be considered Day 1 of the 90-day post-acute portion of the episode).

The LEJR Model is specifically designed to effectively improve the quality of an episode of care and incentivizes increased coordination of care among hospitals, physicians, and post-acute care (PAC) providers.

• All-inclusive services (excluding oral medications) related to a LEJR episode are to be performed by

Community Care Network (CCN) providers, and care rendered during the episode will be coordinated by the participant provider.

• Any episode that includes care rendered directly by VA providers shall not be included in the bundled payment model. (Exception: VA-based Emergency Care)

• Provider participants shall be eligible for incentive payments or incur financial penalties based on their composite quality score and total cost of care related to inpatient episodes of care involving DRG 470 and outpatient episodes of care involving CPTs 27437-27447, 27486, 27487, 27130 and 27132 (or any other relevant CPT codes indicating an outpatient LEJR procedure).

• For all episodes, the episode of care starts with an elective LEJR admission and continues for 90 days from the inpatient hospitalization or the date of the outpatient procedure. In general, an episode will include all items and services provided by the CCN, except for services that would be excluded because they are unrelated to the episode.

• Each eligible provider must have a minimum of 25 unique episodes annually, to qualify for the program.

This approach aligns with the CMS CJR Model, which makes publicly available a list of episode exclusions.

This list specifies 652 three-character ICD-10 code categories for excluded services and 336 MS-DRGs for excluded readmissions. Outpatient exclusions will be identified in claims by a principal diagnosis code that matches or falls under one of the 652 ICD-10 codes in the exclusion list. Inpatient exclusions will be identified in claims by an MS-DRG that matches one of the 336 codes in the exclusion list.

Appendix A contains excerpts from a CMS Final Rule pertaining to the CJR Model which provides rationale for this approach to episode inclusions and exclusions.

1.1 Program Phases & Dependencies

The LEJR Model is comprised of three program phases. The first program phase will be effective upon completion of program implementation by the Contractor and conclude at the end of option year six. The second program phase will begin at the start of option year seven. In aggregate, the first and second program phases shall result in an annual period of provider performance. The third program phase will directly follow the conclusion of the second program phase and will conclude within option year seven.

Key dependencies needed to launch a successful initiative once model design is finalized:

- Amended contract and alignment between the VA and the TPA managing the program (operations).

- Amended contract and alignment between the TPA and the participant providers.

- Performance reporting methodology, design, and cadence development.

1.2 Provider Participants

Potential provider participants for the LEJR model should be identified by the TPA based on the following criteria:

https://innovation.cms.gov/files/worksheets/ccjr-exclusions.xlsx

1. High utilization for Community-based LEJR procedures.

2. Participants of the CMS CJR model.

3. Established relationship with local VA referral teams.

1.3 Base Episode Pricing

The LEJR Model is a retrospective bundled payment model where the TPAs provide participant providers with a base target price (prospectively set by the VA) for applicable LEJR episodes prior to the start of the performance period. All providers and suppliers furnishing LEJR services to patients throughout the performance periods are paid under existing TPA payment systems. Target episode prices for the LEJR Model will be based on current regional pricing in the CMS Comprehensive Care of Joint Replacement (CJR) model for Performance Year One. For the Second Performance Period, the VA may elect to use the CMS benchmark pricing or a blend of regional and historic market costs for LEJR DRG & CPT admissions and associated post-operative care.

Recommended LEJR Model base target price Performance Year One (Based on CMS/U.S. Census Division and associated 2023/2024 DRG 470 episodic target prices):

CMS REGION DRG 470/no fracture target price

(3) East North Central (OH) $19,764.96

(4) West North Central (NE/IA, KS, MO) $19,108.51

(5) South Atlantic (NC) $19,867.60

(6) East South Central (AL) $20,244.10

(7) West South Central (AR, OK) $21,234.52 https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf

A provider participant may wish to enter into certain financial arrangements with collaborating providers and suppliers who are contracted in the CCN and who furnish services to the Veteran during an episode. Under these arrangements, a participant may share payments received from the TPA as a result of improved outcomes (quality and cost) with collaborating providers and suppliers may also share financial accountability for increased episode spending with collaborating providers and suppliers.

1.4 Risk Adjusted Episode Pricing

Episode-level risk adjustment is designed to increase the episode base price for beneficiaries who are likely to require more resources and be more complex patients to treat due to their condition. Due to the focus of providing high quality care with great outcomes, the LEJR Model will greatly reduce the likelihood of a participant provider treating a Veteran in a setting that is not consistent with the Veteran's actual care needs.

The LEJR Model will mimic the risk adjustment methodology of the CMS CJR Model. The CJR Model adjusts episode pricing for risk based on Veteran age and count of Hierarchical Condition Categories (HCC).

Following are risk adjustment factors for each of these variables:

Variable Value Risk Adjustment Factor Age Under 65 1.000

65 through 74 1.001 75 through 84 1.050 85+ 1.090

HCC count = 0 or missing 1.000 = 1 1.026 = 2 1.067 = 3 1.117 = 4 or more 1.295

The table below summarizes risk adjustment multipliers for each combination of age and HCC count and is available here on the CJR Model home page.

Age Bracket HCC = 4+ HCC = 3 HCC = 2 HCC = 1 HCC = 0 85+ 1.412 1.218 1.163 1.118 1.090 75 to 84 1.360 1.173 1.120 1.077 1.050 65 to 74 1.296 1.118 1.067 1.026 1.001 Under 65 1.295 1.117 1.067 1.026 1.000

A risk adjustment multiplier is calculated for each Veteran as the product of two risk adjustment factors, one for age and another for HCC count.

Example #1:

- Veteran aged 77 with an HCC count of 2

- Age risk adjustment factor = 1.050

- HCC count of 2 risk adjustment factor = 1.067

- 1.050*1.067 = A risk adjustment multiplier of 1.120 https://innovation.cms.gov/media/document/cjr-risk-adjustment

The base episode price (for the performance period the LEJR is rendered) multiplied by the risk adjustment multiplier results in the risk adjusted base price, which becomes the target price for applicable episodes.

Example #2:

- Veteran aged 77 with an HCC count of 2 has a risk adjustment multiplier of 1.120

- Base Episode Target Price = $21,234

- Risk Adjusted Base Episode Target Price = $23,782 [$21,234*1.120]

The VA uses Veteran HCC data in the risk adjustment methodology to calculate a risk adjusted target price for each Veteran’s LEJR episode of care. The HCC count can be calculated based off veterans diagnoses and total number of HCCs that these diagnoses fall within.

1.5 Quality Gate Measures

The LEJR Model adopts a quality first principle, meaning participant providers must achieve a minimum level of episode quality, as determined by a provider’s composite quality score, before receiving incentive payments.

The composite quality score reflects hospital performance and improvement on the following two measures:

1. “Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty

(THA) and/or Total Knee Arthroplasty (TKA)” measure (NQF#1550) and

2. “Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey” measure

(NQF#0166)

a. Performance determined using HCAHPS Linear Mean Roll‐up (HLMR) score.

i. HLMR is calculated by taking the average of the linear mean scores (LMS) for each of the 10 publicly reported HCAHPS measures

ii. Data Source = CMS Comprehensive Care for Joint Replacement Model - Provider Data Site [Link]

As noted in section 1.1 of this document, the LEJR Model is comprised of two performance periods. Claims will be submitted by the community provider(s) to the TPA and will be paid following the same mechanisms that exist prior to the LEJR Model bundled payment project. The TPA will use claims data as the source for RSCR measure, in combination with HCAHPS sourced data, to calculate composite quality score for participant providers. The TPA will also need to collaborate with the VA to source any VA-provided Emergency Department or readmission data for LEJR Veteran participants, as these instances will be incorporated in the RSCR calculation. Once base data is collected, the TPA will assign quality performance points for the RSCR measure and the HCAHPS Survey measure to each participant provider. The sum of the components above constitutes the composite quality score, which is capped at 20 points. The individual measure performance points have been set so they can be summed without adjustment when calculating the composite quality score.

(See table 1.5 in Appendix D for CQS calculation)

1.5.1 Composite Quality Score Calculation

Upon completion of the Performance Phases of the LEJR bundled payment model, the providers’ RSCR will be benchmarked against the CMS distribution of hospital RSCRs over different time periods. To illustrate these calculations, tables 1.5.1a and 1.5.1b in Appendix D will used the CMS RSCR scores from 7/1/2020 – 3/1/2021. This RSCR score distribution may be updated to reflect more recent data, depending on the start date of the LEJR bundled payment model. There will be a maximum of ten quality points that can be earned for each of the two quality measures listed above. The number of points earned by the provider will be dependent upon which percentile the providers RSCR and HCAHPS scores fall. Providers will earn 0 points for scores below the 25th percentile, 5 points for scores greater than the 25th percentile but below the 50th percentile, 7.5 points for scores greater than the 50th percentile but below the 75th percentile, and 10 points for scores greater than the 75th percentile (See table 1.5.1b in Appendix D to see the breakdown of these scores).

Composite Quality Score (CQS) calculation example:

- Provider A earns the following scores:

o RSCR Score of 2.75 https://www.hcahpsonline.org/globalassets/hcahps/summary-analyses/percentiles/2022-10-percentiles-public-report.pdf https://data.cms.gov/provider-data/dataset/tqkv-mgxq https://data.cms.gov/provider-data/dataset/tqkv-mgxq o HCAHPS Score of 77 o Provider A would receive 5 CQS points for their RSCR score and 10 CQS points for their

HCAHPS score for a CQS of 15 total points.

- Provider B earns the following scores:

o RSCR Score of 2.54 o HCAHPS Score of 68.3 o Provider B would receive 7.5 CQS points for their RSCR score and 5 CQS points for their HCAHPS score for a CQS of 12.5 total points.

The CQS will be used as the quality metric to determine retrospective bonus payments for providers who generate savings (This process is further outlined in Appendix D of this document).

*Note that in Program Phases 1 and 2, there is only upside (bonus) risk in the LEJR Model. There will be no downside (repayment) risk in Program Phases 1 and 2 of this model. Downside risk may be incorporated (as well as increases in the upside risk) if subsequent performance periods are activated.

1.6 Performance Evaluation & Payment

Following completion of each LEJR Model performance period, participants are evaluated on performance related to quality and their ability to coordinate care at a lower cost. The TPA has 153 days from the end of the performance period to calculate performance:

• 90 days post-performance period submit draft report to VA

• 153 days post-performance period submit final report to VA

This timeframe allows for claims runout and ensures data integrity for quality measures prior to participant evaluation. During the evaluation period, actual total spending for each episode is compared to the target price (risk adjusted where applicable) for the participant provider that managed the LEJR procedure and coordinated the subsequent post-acute care. Certain episodes should be excluded from the performance evaluation.

Exclusion criteria can be found in the Appendix B of this design document. The difference of aggregated performance period episode target pricing against aggregated performance period actual costs (total related claims) will result in a savings pool or a loss pool.

Providers participating in the LEJR Model that meet qualifying composite quality scores and create a savings pool will be entitled to a bonus payment. The LEJR Model incorporates limitations on gain (i.e., stop gain) and limitations on loss (i.e., stop loss) to control risk to participants. The stop gain and stop loss limits vary by performance period (PP) and are summarized in Table 1.6a found in Appendix D.

Participating providers may earn up to 50% of the total savings pool generated when actual episode costs fall below the risk adjusted episode costs (aggregated). There is no downside risk included in the assessment of Performance Phases 1 and 2, meaning that providers who generate a loss pool, regardless of quality, will not be responsible for paying back any portion of this amount. The presence of upside risk without any downside risk in Performance Phases 1 and 2 is to allow providers the ability to test the model, establish appropriate connections for post-acute care in the community, and develop the appropriate mechanisms for improving quality while reducing total episode cost. Participant hospitals must have a composite quality score greater than or equal to 5.0 to be eligible for a bonus payment.

EXAMPLE:

Participant Provider with CQS=11.25, “Good” Quality Category. A Veteran aged 77 with an HCC count of 2 at the time of the LEJR procedure.

- Target Episode Pricing (TEP) = $21,234

- Risk Adjustment Multiplier (RAM) = (Age Risk Adjustment Factor) x (HCC Count Risk Adjustment

Factor) o Risk Adjusted Base Episode Price = Target Episode Pricing (TEP) $21,234 x Risk Adjustment

Multiplier (RAM) 1.120 = $23,782

- Actual Episode Spending (AES) = $20,000

- Net Payment Reconciliation Amount (NPRA) = Risk Adjusted Target Price – Actual Episode Spending o NPRA = $23,328 - $20,000 = $3,782 [Positive = Savings Pool]

- CQS = 11.25 [Bonus Incentive of 30% to be applied to Savings Pool] o Bonus Incentive Payment to Provider: $3,782 x 30% = $1,134.60

The TPA will submit an invoice and provider performance report to VA for participant provider incentive payment. TPA and VA shall agree on requirements for provider performance report.

1.7 Veteran Identification and Referral Process

The VA will identify and refer eligible Veterans for the initiative to the participant providers. The LEJR Eligible Veteran Report shall identify the Veterans as an eligible referral for participation in the initiative, as well as any risk adjustment data, if applicable. Exclusions identified in the Appendix of this design document. All other existing VA referral workflows and policies will continue to apply.

The TPA will utilize the LEJR Eligible Veteran Report and associated risk adjustment data in the participant provider evaluation process.

1.8 Veteran Benefits and Protections

Veterans retain their freedom to choose their providers and services, and providers may continue to provide any medically necessary covered services. Physicians and hospitals will be expected to continue to meet current standards required by all VA programs. All existing safeguards to protect Veterans and patients remain in place. The TPA/VA will also conduct regular monitoring of claims data from participant providers to ensure that beneficiaries continue to receive all necessary services.

Appendix A: CJR Model Approach to Episode Inclusions/Exclusions

The following is an excerpt from a final rule pertaining to the CJR Model approach to episode inclusions/exclusions. It is available in the Federal Register.

We proposed to exclude only those Medicare items and services furnished during the episode that are unrelated to LEJR procedures based on clinical justification. During our experience with Bundled Payments for Care Innovation (BPCI) implementation, we reviewed a number of narrow episode definitions for LEJR episodes that were recommended by BPCI participants and other interested parties during the design phase for this project. We concluded that these narrow definitions commonly exclude many services that may be linked to the LEJR, as LEJR beneficiaries, on average, are at higher risk for more clinical problems than Medicare beneficiaries who have not recently undergone such procedures.

Therefore, we proposed that all CJR episodes, beginning with the admission for the anchor hospitalization under 470 through the end of the proposed episode, include all items and services paid under Medicare Part A or Part B with the exception of certain exclusions that would be excluded because they are unrelated to the episode. The items and services ultimately included in the episode after the exclusions are applied are called related items and services…

We proposed that related items and services included in CJR episodes would be the following items and services paid under Medicare Part A or Part B, after the exclusions are applied:

• Physicians' services.

• Inpatient hospital services (including readmissions), with certain exceptions discussed later in this section.

• Inpatient psychiatric facility (IPF) services.

• Long Term Care Hospital (LTCH) services.

• IRF services.

• SNF services.

• HHA services.

• Hospital outpatient services.

• Independent outpatient therapy services.

• Clinical laboratory services.

• Durable medical equipment (DME).

• Hospice.

Based on the broad nature of these episodes, we proposed to identify excluded (unrelated) services rather than included (related) services based on the rationale that all Part A and Part B services furnished during the episode are related to the episode, unless they are unrelated based on clinical justification as described in more detail later in this section.

To operationalize these principles for CJR, we proposed to exclude unrelated inpatient hospital admissions during the episode by identifying MS-DRGs for exclusion. We proposed to exclude unrelated Part B services based on the ICD-9-CM diagnosis code (or their International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) equivalents when ICD-10-CM codes are implemented) that is the principal diagnosis code reported on claims for services furnished during the episode. More specifically, we proposed to exclude specific inpatient hospital admissions and services consistent with the LEJR episode definition (also triggered by MS-DRG 470) that is currently used in BPCI Model 2. We note that the list of exclusions was initially developed over 2 years ago for BPCI through a collaborative effort of CMS staff, including physicians from medical and surgical specialties, coding experts, claims processing experts, and health services researchers. The list has been shared with thousands of entities and individuals participating in one or more phases of BPCI and has undergone refinement over that time in response to stakeholder input about specific diagnoses or MS- DRGs for exclusion, resulting in only minimal changes over the last 2 years. Thus, the BPCI list of https://www.federalregister.gov/documents/2015/11/24/2015-29438/medicare-program-comprehensive-care-for-joint-replacement-payment-model-for-acute-care-hospitals exclusions for LEJR procedures has been vetted broadly in the health care community; refined based on input from a wide variety of providers, researchers and other stakeholders; and successfully operationalized in the BPCI models. We proposed its use in CJR based on our confidence related to our several of years of experience that this definition is reasonable and workable for LEJR episodes, for both providers and CMS.

Appendix B: Episode and Performance Calculation Exclusions

Episode exclusions:

Veteran episodes should be excluded from initiative inclusion if they meet any of the following criteria:

1. With a femur, hip or pelvic fracture as a principal diagnosis.

Rationale: THA procedures are not elective in these patients, and these patients represent a higher risk category for mortality, complication, and readmission.

2. Undergoing partial hip arthroplasty (PHA) procedures (with a concurrent THA/TKA).

Rationale: Partial arthroplasties are primarily done for hip fractures and are typically performed on patients who are older, frailer, and have more comorbid conditions.

3. Undergoing revision procedures (with a concurrent THA/TKA).

Rationale: Revision procedures may be performed at a disproportionately small number of hospitals and represent a higher risk category for mortality, complication, and readmission.

4. Undergoing resurfacing procedures (with a concurrent THA/TKA).

Rationale: Resurfacing procedures are a different type of procedure involving only the joint’s articular surface. Resurfacing procedures are typically performed on younger, healthier patients.

5. With a mechanical complication as a principal diagnosis.

Rationale: A complication coded as the principal diagnosis suggests the procedure was more likely the result of a previous procedure. These patients may require more technically complex arthroplasty procedures and may be at increased risk for complications, particularly mechanical complications.

6. With a malignant neoplasm of the pelvis, sacrum, coccyx, lower limbs, or bone/bone marrow or a disseminated malignant neoplasm coded as the principal diagnosis.

Rationale: Patients with these malignant neoplasms are at increased risk for complications and the procedure may not be elective.

7. Inclusive of a removal of implanted devices / prostheses.

Rationale: Elective procedures performed in these patients may be more complicated.

Performance calculation exclusions:

Once all claims for applicable initiative referrals during each performance period are collected, TPA will exclude the referrals and claims that meet the following criteria:

1. Veterans who were transferred into the index hospital

Rationale: If the patient is transferred from another acute care facility to the hospital where the index procedure occurs, it is likely that the procedure is not elective or that the admission is associated with an acute condition.

2. Veterans who leave the hospital against medical advice (AMA)

Rationale: Hospitals and physicians do not have the opportunity to provide the highest quality care for these patients.

3. Veterans with more than two THA/TKA procedures codes during the index hospitalization

Rationale: Although clinically possible, it is highly unlikely that patients would receive more than two elective THA/TKA procedures in one hospitalization, and this may reflect a coding error.

4. Veterans with episode claims originating from different regions or contracted adjudicators.

Appendix C: Complications for Hospital-Level Risk-Standardized Complication Rate (RSCR) (NQF 1550) Numerator Inclusion

Complication Follow-up Period in Days Required Coding Placement

Acute myocardial infarction

During index admission or within 7 days of admission date

• Index admission – principal or secondary discharge diagnosis field

• Readmissions – principal discharge diagnosis field only

Pneumonia

Sepsis / septicemia / shock

During index admission or within 7 days of admission date

• Index admission – principal or secondary discharge diagnosis fields

• Readmissions – principal or secondary discharge diagnosis fields

Surgical site bleeding During index admission or within 30 days of admission date

• Index admission – principal or secondary discharge diagnosis fields

• Readmissions – principal or secondary discharge diagnosis fields Pulmonary embolism

Death During index admission or within 30 days of admission date

N/A

Mechanical complications

During index admission or within 90 days of admission date

• Index admission – secondary discharge diagnosis field

• Readmissions – principal or secondary discharge diagnosis fields

Periprosthetic joint infection / wound infection

During index admission or within 90 days of admission date

• Index admission – secondary discharge diagnosis field

• Readmissions – principal or secondary discharge diagnosis fields

Source: NQF 1550 Measure Methodology Report https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Downloads/Hip-and-Knee-Arthroplasty-Complications.zip

Appendix D: Quality Measures and Performance Evaluation

Table 1.5: Quality Measures of the Composite Quality Score (CQS)

Quality Measure

Maximum Quality Performance

Points Hospital-Level Risk-Standardized Complication Rate (RSCR) measure (NQF #1550)

10.0

HCAHPS Survey measure (NQF #0166) 10.0

Table 1.5.1a: Distribution of Hospital THA/TKA RSCRs over Different Time Periods

Characteristic

4/1/2018 – 3/31/2019

4/1/2019 – 10/2/2019

7/1/2020 – 3/31/2021

HCAHPS Survey Measure Quality

Performance Points

Number of hospitals 3,344 3,180 2,975 3,445

Mean (SD) 2.3 (0.3) 2.4 (0.3) 2.7 (0.4) 2.4 (0.4)

Range (min – max) 1.2 – 4.3 1.3 – 4.6 1.4 – 5.4 1.2 – 5.6

25th percentile 2.2 2.2 2.5 2.2

50th percentile 2.3 2.3 2.6 2.4

75th percentile 2.5 2.5 2.8 2.6

Reference: 2022 Procedure-Specific Complication Measure Updates and Specifications Report Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) — Version 11.0 https://www.cms.gov/files/document/2022-measure-updates-procedure-specific-complication-measure-updates-and-specifications-report.pdf *CMS RSCR data populated in Table 1.5.1a (above) is organized with the 25th percentile being most favorable scores and subsequently decreasing in quality as percentiles increase.

https://www.cms.gov/files/document/2022-measure-updates-procedure-specific-complication-measure-updates-and-specifications-report.pdf https://www.cms.gov/files/document/2022-measure-updates-procedure-specific-complication-measure-updates-and-specifications-report.pdf

Table 1.5.1b: Performance Period Benchmarks

Performance Percentile

RSCR Score (Based on

National Data 7/1/2020-

3/31/2021)

Hospital-Level

Risk-Standardized Complication Rate (RSCR)

Performance

HCAHPS Score

(Based on National Data for

2021)

HCAHPS Survey

Performance Points

Points

75th Percentile ≤ 2.5 10 ≥ 75.6 10

50th Percentile ≤ 2.6 and > 2.5 7.5 ≥ 69.9 and < 75.6 7.5

25th Percentile ≤ 2.8 and > 2.6 5 ≥ 64.7 and < 69.9 5

<25th Percentile >2.8 0 < 64.7 0

*RSCR & HCAHPS scoring thresholds populated in Table 1.5.1b (above) are organized with the 75th percentile being most favorable scores and subsequently decreasing in quality as percentiles decrease.

**VA may, at its sole discretion, utilize Performance Year One benchmarks for subsequent Performance Period.

Table 1.5.2: Subsequent Performance Period Benchmarks (Once Peer Provider Benchmarks are Available)

National/Regional Average

Performance Percentile

Hospital-Level Risk-

Standardized Complication Rate (RSCR)

Measure Quality Performance

Points

HCAHPS Survey Measure Quality

Performance Points

≥ 90th 10.00 10.00 ≥ 80th and < 90th 9.00 9.00 ≥ 70th and < 80th 8.00 8.00 ≥ 60th and < 70th 7.00 7.00 ≥ 50th and < 60th 6.00 6.00 ≥ 40th and < 50th 5.00 5.00 ≥ 30th and < 40th 4.00 4.00 <30th 0.00 0.00

Table 1.6a: LEJR Model Stop Gain and Stop Loss Limits

PP

Stop Gain

Limit Stop Loss

Limit 1 50.0% 0.0%

Table 1.6b: LEJR Model Performance Periods Incentive Table Below

Acceptable CQS <5

Acceptable CQS >=5 and <10

Good CQS >=10 and <15

Excellent CQS >=15

PP Bonus Bonus Bonus Bonus

1 0.0% 15.0% 30.0% 50.0%

CQS = Composite Quality Score = (Hospital-Level Risk-Standardized Complication Rate (RSCR) Measure + HCAHPS Survey Measure) Bonus = % of aggregate cost savings provider has earned for performance period

Appendix E: LEJR Bundled Payment Process In the LEJR Model, claims will be submitted from the participating provider to the TPA at the time the services are provided (same as current state). The TPA will reimburse the providers on a claim-by-claim basis. Since the LEJR bundled payment model is a retrospective alternative payment model, current processes for claims submission and processing will not be affected.

On a monthly basis, the TPA will aggregate the claims associated with each Veteran LEJR episode to analyze the costs of care at both an episode level as well as at a facility level.

- This process will require multiple levels of analysis, including:

o Utilizing the age risk adjustment factor and the HCC count risk adjustment factor to calculate a Risk Adjustment Multiplier (RAM) for each episode of care at the patient-level (See Section 1.4 for more information).

o The base episode price (according to CMS regional data) will be multiplied by the RAM to generate a risk adjusted episode cost. This cost provides a risk adjusted benchmark on which actual episode costs can be compared against.

o The TPA will then calculate the total amount of claims paid for each episode of care and compare that amount to the risk adjusted episode cost to determine if the provider generated a savings or a loss at the patient level.

It should be noted that while VA-provided Emergency Department and readmission services are included in the Hospital-Level Risk-Standardized Complication Rate (RSCR) quality measure, these services and their associated cost should not be included in the cost portion of the participating providers performance evaluation conducted by the TPA.

o At the end of a performance period, the savings/loss pools will be aggregated for all Veteran LEJR episodes performed by the provider for the performance period to determine the provider’s share in bonus.

o Once the TPA determines the amount of savings/loss generated at an aggregate (provider) level, the TPA will then analyze the participating provider’s quality performance to determine their share in the bonus.

- To determine the providers quality performance:

o The TPA must utilize claims data to determine performance in the Hospital-Level Risk-

Standardized Complication Rate (RSCR) and patient reported survey (HCAHPS) data to determine performance in the patient satisfaction measure. (See Section 1.5 for more information).

o Section 1.5.1 outlines the quality analysis steps for Performance assessment.

o Providers may earn up to a total of 20 points for their Composite Quality Score (CQS), 10 points from each of the two measures. Based on the provider’s CQS, the VA/TPA will then calculate the amount of savings to be shared with the provider.

o The TPA will then issue the bonus payment after the ending of the evaluation period.

Appendix F: Stakeholders

VA POC Name Organization Contact Information

Hillary Peabody IVC IEN, Acting Executive Team, Executive Director

Hillary.Peabody@va.gov

Tiffany Stockebrand IVC IEN, Acting Executive Team, Executive Assistant

Tiffany.Stockebrand@va.gov

Janet Cabeen, MPA

IVC IEN, Contracts Management & Performance (CMP), Director

Janet.Cabeen@va.gov

Dr. Sachin Yende, MD MS IVC IEN, Acting Executive Team Sachin.Yende@va.gov

Dr. Mark Wilson, MD

VHA National Director of Surgery

Mark.Wilson5@va.gov

Dr. Nicholas Potochny, DO

Deputy Chief Medical Officer

Nicholas.Potochny@va.gov mailto:Hillary.Peabody@va.gov mailto:Tiffany.Stockebrand@va.gov mailto:Janet.Cabeen@va.gov mailto:Sachin.Yende@va.gov mailto:Mark.Wilson5@va.gov mailto:Nicholas.Potochny@va.gov

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Barnett, M.L., Wilcock, A., McWilliams, J.M., Epstein, A.M., Joynt Maddux, K.E., Orav, E.J., Grabowski, D.C., & Mehrotra, A. (2019). Two-year evaluation of mandatory bundled payments for joint replacement. The New England Journal of Medicine, 380, 252-262.

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