Medicare Program; Changes to the Comprehensive Care for Joint Replacement Payment Model (CJR): Extreme and Uncontrollable Circumstances Policy for the CJR Model
Final rule.
CFR Part: "42 CFR Part 510"
RIN Number: "RIN 0938-AT16"
Citation: "83 FR 26604"
Document Number: "CMS-5524-F2"
Page Number: "26604"
"Rules and Regulations"
SUMMARY: This final rule finalizes a policy that provides flexibility in the determination of episode spending for
DATES: Effective
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
I. Background
In the Medicare Program; Cancellation of Advancing Care Coordination Through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to
II. Provisions of the Interim Final Rule With Comment Period and Analysis of and Response to Public Comments
A. Overview and Background
In the interim final rule with comment period published on
As we stated in the interim final rule with comment period, at least 101 CJR participant hospitals are located in the areas affected by Hurricane Irma and Hurricane Harvey, at least 22 CJR participant hospitals are located in areas impacted by the
FOOTNOTE 1 Irma forces at least 35 hospitals to evacuate patients. Here's a rundown.
FOOTNOTE 2 After Harvey Hit, a Texas Hospital Decided to Evacuate. Here's How Patients Got Out.
FOOTNOTE 3 Hurricane Irma causes 36 Florida hospitals to close.
FOOTNOTE 4
FOOTNOTE 5
FOOTNOTE 6 http://www.al.com/news/mobile/index.ssf/2017/11/trump_declares_major_disaster.html. END FOOTNOTE
FOOTNOTE 7 Tia Powell,
Under SEC 510.305(e), as of performance year 2, CJR participant hospitals who have episode costs as calculated under
Prior to
B. Identifying Participant Hospitals Affected by Extreme and Uncontrollable Circumstances
As discussed in the interim final rule with comment period, for purposes of developing a policy to identify hospitals affected by extreme and uncontrollable circumstances, we consulted section 1135 of the Social Security Act (the Act). That section allows the Secretary to temporarily waive or modify certain Medicare requirements to ensure that sufficient health care items and services are available to meet the needs of individuals enrolled in Social Security Act programs in the emergency area and emergency period. It also allows the Secretary to temporarily waive or modify certain Medicare requirements to ensure that providers who provide such services in good faith can be reimbursed and exempted from sanctions (absent any determination of fraud or abuse). The Secretary has invoked this authority in response to significant natural disasters such as Hurricane Katrina in 2005 and Superstorm Sandy in 2012. Though the section 1135 waiver authority enables us to take actions that give healthcare providers and suppliers greater flexibility, it does not allow for payment adjustment for participant hospitals in the CJR model. However, as we noted in the interim final rule with comment period, the extreme and uncontrollable circumstance policy should only apply when a disaster is widespread and extreme. A section 1135 waiver identifies the "emergency area" and "emergency period," as defined in section 1135(g) of Act, for which waivers are available. As we stated in the interim final rule with comment period, we believe it is appropriate to establish an extreme and uncontrollable circumstance policy that applies only when and where the magnitude of the event calls for the use of special waiver authority to help providers respond to the emergency and continue providing care.
In the interim final rule with comment period, we noted that the extreme and uncontrollable circumstance policy also should be tailored to the specific areas experiencing the extreme and uncontrollable circumstance. Section 1135 waivers typically are authorized for a geographic area that may encompass a greater region (that is, an entire state) than is directly and immediately affected by the relevant emergency. In addition, section 1135(g) of the Act defines the emergency area as that area covered by both a Secretarial and a Presidential declaration; consequently, the scope of the emergency area is not entirely in the Secretary's control. /8/ For purposes of this policy, we stated that a narrower geographic scope, rather than the full emergency area, would ensure that the payment policy adjustment is focused on the specific areas that experienced the greatest adverse effects from the extreme and uncontrollable circumstance and is not applied to areas sustaining little or no adverse effects.
FOOTNOTE 8 See section 1135(g) of the Act for the definition of "emergency area; emergency period". END FOOTNOTE
Therefore, to narrow the scope of this policy to ensure it is applied to those providers most likely to have experienced the greatest adverse effects, we also required that the area be declared as a major disaster area under the Stafford Act. Once an area is declared as a major disaster area under the Stafford Act, the specific counties, municipalities, parishes, territories, and tribunals that are part of the major disaster area are identified and can be located on the
For this policy, only major disaster declarations under the Stafford Act in combination with issued section 1135 waivers are used to identify the specific counties, municipalities, parishes, territories, and tribunals where the extreme and uncontrollable circumstance took place. Using the major disaster declaration as a requirement for the extreme and uncontrollable event policy also ensures that the policy will apply only when the event is extreme, meriting the use of special authority, and targeting the specific area affected by the extreme and uncontrollable circumstance. As we noted in the interim final rule with comment period, we are not including emergency declarations under the Stafford Act or national emergency declarations under the National Emergencies Act in this policy, even if such a declaration serves as a basis for the Secretary's invoking the section 1135 waiver authority. This is because we believe it is appropriate for our extreme and uncontrollable circumstance policy to apply only in the narrow circumstance where the circumstance constitutes a major disaster, which are more catastrophic in nature and tend to have significant impacts to infrastructure, rather than the broader grounds for which an emergency could be declared.
In the policy we established to define extreme and uncontrollable circumstances for the CJR model, an area is identified as having experienced 'extreme and uncontrollable circumstances,' if it is within an "emergency area" and "emergency period" as defined in section 1135(g) of the Act, and also is within a county, parish,
As we stated in the interim final rule with comment period, we believe Hurricanes Harvey, Irma, and Nate and the
The counties, parishes, and tribal governments that met the criteria for the CJR policy on extreme and uncontrollable circumstances in performance year 2 are as follows: /9/
FOOTNOTE 9 The Secretary issued
* The following counties in
FOOTNOTE 10 https://www.fema.gov/disaster/4349/designated-areas. END FOOTNOTE
* The following counties in
FOOTNOTE 11 https://www.fema.gov/disaster/4344/designated-areas. END FOOTNOTE
* All 67 counties /12/ and
FOOTNOTE 12 https://www.fema.gov/disaster/4337/designated-areas. END FOOTNOTE
FOOTNOTE 13 https://www.fema.gov/disaster/4341/designated-areas. END FOOTNOTE
* All 159 counties in
FOOTNOTE 14 https://www.fema.gov/disaster/4338/designated-areas. END FOOTNOTE
* All 46 counties, and the
FOOTNOTE 15 https://www.fema.gov/disaster/4346/designated-areas. END FOOTNOTE
* The following counties in
FOOTNOTE 16 https://www.fema.gov/disaster/4332/designated-areas. END FOOTNOTE
* The following parishes in
FOOTNOTE 17 https://www.fema.gov/disaster/4345/designated-areas. END FOOTNOTE
Using these criteria, in the interim final rule with comment period, we stated that we were able to identify at least 101 CJR participant hospitals located in the areas affected by Hurricanes Harvey and Hurricane Irma, approximately 12 CJR participant hospitals in the areas affected by Hurricane Nate, and at least 22 CJR participant hospitals in areas impacted by the
Though the Hurricanes and
C. Provisions for Adjusting Episode Spending Due to Extreme and Uncontrollable Circumstances
In the interim final rule with comment period, we noted that without a policy to provide CJR participant hospitals some flexibility in extreme and uncontrollable circumstances, we might inadvertently create an incentive to place cost considerations above patient safety, especially in the later years of the CJR model when the downside risk percentage increases. In considering policy alternatives to help ensure beneficiary protections by mitigating participant hospitals' financial liability for costs resulting from extreme and uncontrollable circumstances, we considered and rejected a blanket cancellation of all episodes occurring during the relevant period. As we stated in the interim final rule with comment period, we do not believe that a blanket cancellation would be in either beneficiaries' or CJR participant hospitals' best interests, as it is possible that hospitals can manage costs and earn a reconciliation payment despite these extreme and uncontrollable circumstances.
Furthermore, we would not want CJR participant hospitals to limit case management services for beneficiaries in CJR episodes during extreme and uncontrollable circumstances, when prudent care management could potentially involve using significantly more expensive transport or care settings. Therefore, we determined that capping the actual episode spending at the target amounts for those episodes would be the best way to protect beneficiaries from potential care stinting and hospitals from escalating costs. As we stated in the interim final rule with comment period, this will also ensure that those hospitals are still able to earn reconciliation payments on those eligible episodes where the disaster did not have a noticeable impact on cost.
In determining the start date of episodes to which this extreme and uncontrollable circumstances policy will apply, we determined that a window of 30 days prior to and including the date that the emergency period (as defined in section 1135(g) of the Act) begins should reasonably capture those beneficiaries whose high CJR episode costs could be attributed to extreme and uncontrollable circumstances. As we stated in the interim final rule with comment period, we believe this 30-day window is particularly appropriate due to the 90-day CJR model episode length. Including all episodes that begin within 30 days before the date the emergency period begins should enable us to include the majority of beneficiaries still in institutional settings and who are still within the first third of their episodes when the extreme and uncontrollable circumstance arises. We note that the average length of stay for DRG 469 is between 5 and 6 days and the average length of stay for DRG 470 is between 2 and 3 days (see https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/FY2018-CMS-1677-FR-Table-5.zip).
Under SEC 510.300(a)(1), we differentiated fracture and non-fracture CJR episodes and pricing, noting that lower extremity joint replacement procedures performed as a result of a hip fracture are typically emergent procedures. Fracture episodes typically occur for beneficiaries with more complex health issues and can involve higher episode spending. As we stated in the interim final rule with comment period, we do not expect a high volume of CJR non-fracture episodes to be initiated once extreme and uncontrollable circumstances arise, given that it is not prudent to conduct non-fracture major joint replacement surgeries, which generally are elective and non-emergent, until conditions stabilize and infrastructure is reasonably restored. Therefore, for non-fracture episodes, the extreme and uncontrollable circumstances policy we established in the interim final rule with comment period only applies to dates of admission to anchor hospitalization that occur between 30 days before and up to the date on which the emergency period (as defined in section 1135(g) of the Act) begins. We believe this policy empowers hospitals to decide whether they can safely and appropriately perform non-fracture THA and TKA procedures after the commencement of the emergency period and whether or not performing these procedures will subject their organization to undue financial risk resulting from increased costs that are beyond the organization's control.
However, for CJR fracture episodes, the extreme and uncontrollable circumstances policy we established in the interim final rule with comment period applies to dates of admission to the anchor hospitalization that occur within 30 days before, on, or up to 30 days after the date the emergency period (as defined in section 1135(g) of the Act) begins. As we stated in the interim final rule with comment period, we recognize that fracture cases in CJR are often emergent and unplanned, and it may not be prudent to postpone major joint surgical procedures in many of those CJR fracture cases. Therefore, fracture episodes with a date of admission to the anchor hospitalization that is on or within 30 days before or after the date that the emergency period (as defined in section 1135(g) of the Act) begins are subject to this extreme and uncontrollable circumstances policy. As we stated in the interim final rule with comment period, we believe that this 30-day window before and after the emergency period should ensure that hospitals caring for CJR fracture patients during extreme and uncontrollable circumstances are adequately protected from episode costs beyond their control.
In the interim final rule with comment period, we established that, for performance years 2 through 5, for participant hospitals that are located in an emergency area during an emergency period, as those terms are defined in section 1135(g) of the Act, for which the Secretary has issued a waiver under section 1135 of the Act, and in a county, parish,
We codified this new extreme and uncontrollable circumstance policy at
Comment: All of the comments we received in response to our comment solicitation expressed support for an extreme and uncontrollable circumstances policy for the CJR model. All commenters supported the application of the policy to episodes with anchor stays beginning on or within 30 days before the date of the emergency period. A commenter supported the policy as established in the interim final rule with comment period and stated that it should apply to future performance years beyond performance year 2. Another commenter, who also supported the policy, noted that due to the substantial disruptions in the post-acute care market from significant infrastructure damage, the policy could be significantly improved if CMS capped payments for both fracture and non-fracture episodes with an anchor hospitalization within 30 days before or after the date that the emergency period begins. A different commenter, who also supported the policy, urged CMS to expand it to include more episodes by developing specific, recovery-focused criteria, such as the number of patients remaining displaced from their homes, the proportion of health care services remaining unavailable and distance to comparable services for rural areas to determine the end date for episodes. This commenter, who noted that extensive damage to infrastructure, housing and post-acute care services in
Response: We appreciate the support expressed by commenters for our extreme and uncontrollable circumstances policy and agree with commenters that it is appropriate for the policy to cover both fracture and non-fracture episodes with anchor stays occurring on or within 30 days before the date of the emergency period. In response to the commenter who stated that our extreme and uncontrollable circumstances policy should apply to future performance years, we can confirm that it does. While we note that recovery efforts from major disasters can take extensive time and resources, as we stated in the interim final rule with comment period, we continue to believe that it is not prudent to conduct non-fracture major joint replacement surgeries, which generally are elective and non-emergent, until conditions stabilize and infrastructure is reasonably restored. Although we acknowledge that joint replacements can have a substantial impact on quality of life for beneficiaries, we are not persuaded by commenters that it is appropriate to extend the extreme and uncontrollable events policy to non-fracture CJR episodes beginning on or within the 30 days after the onset of an emergency period. If lasting infrastructure damage has severely crippled post-acute care access and limited offerings in a community, we are not convinced that elective surgeries should resume, especially for beneficiaries likely to need institutional post-acute care, until there is some assurance that that care will be available.
When we originally finalized the CJR target amounts in the
In considering the commenter's suggestion that we develop on-going specific, recovery-focused criteria, such as the number of patients remaining displaced from their homes, the proportion of health care services remaining unavailable and distance to comparable services for rural areas to determine the end date for episodes we note that it would be extremely difficult to establish general criteria that would apply broadly to all emergency periods that might trigger the extreme and uncontrollable circumstances policy; this type of criteria would likely need to be specific to each individual emergency period and would therefore be more subjective and less predictable for providers in the CJR model. We believe the time-based criteria we established for this policy are more straightforward and create clear guidelines for CJR participant hospitals that may need an advanced, predictable understanding of which episodes will be subject to the extreme and uncontrollable circumstances policy. We established this policy to limit financial liability under the CJR model for participant hospitals caring for CJR fracture patients during extreme and uncontrollable circumstances where costs can escalate beyond their control. While we acknowledge that disaster recovery efforts can be prolonged beyond 30-day periods, we believe that care management planning is even more essential when communities are recovering from major disasters. However, we do not believe that altering the post emergency window from 30 to 90 days, as suggested by a commenter, would be appropriate, as a longer post emergency window might incentivize providers to disengage from the care management the CJR model is focused on improving.
We note a technical correction to the preamble of the interim final rule with comment period. In several places we described our extreme and uncontrollable circumstances policy as applying when a major disaster declaration served as the condition precedent to an section 1135 waiver. However, this was incorrect, as in several of the events to which our policy applies, an emergency declaration under the Stafford Act was the condition precedent for the Secretary's exercise of the section 1135 waiver authority. For example, the section 1135 waiver for Hurricane Nate was based on an emergency declaration under the Stafford Act, but a major disaster declaration under the Stafford Act subsequently was made. The regulation text at 42 CFR 510.305(k), which we are finalizing without modification, accurately reflects the policy.
III. Provisions of the Final Regulations
This final rule incorporates the provisions of the interim final rule with comment period without changes. Therefore, this extreme and uncontrollable circumstances policy, as codified at 42 CFR 510.305(k) will apply to CJR participant hospitals that are both located in an emergency area during an emergency period (as those terms are defined in section 1135(g) of the Act) for which the Secretary has issued a waiver under section 1135; and that are also located in a county, parish, or tribal government designated in a major disaster declaration under the Stafford Act.
IV. Collection of Information Requirements
As stated in section 1115A(d)(3) of the Act, Chapter 35 of title 44, United States Code, shall not apply to the testing and evaluation of models under section 1115A of the Act. As a result, the information collection requirements contained in this final rule need not be reviewed by the
V. Regulatory Impact Statement
We have examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A Regulatory Impact Analysis (RIA) must be prepared for major rules with economically significant effects (
The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than
In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications. Since this regulation does not impose any costs on state or local governments, the requirements of Executive Order 13132 are not applicable.
Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs, was issued on
In the
For non-fracture episodes, we capped the actual episode payment at the target price determined for that episode if the date of admission to the anchor hospitalization was on or within 30 days before the date that the emergency period (as defined in section 1135(g) of the Act) begins. For fracture episodes, we capped the actual episode payment at the target price determined for that episode if the date of admission to the anchor hospitalization was on or within 30 days before or after the date that the emergency period (as defined in section 1135(g) of the Act) begins. Our analyses indicated that the impact of capping the actual episode payments at the episode target prices based on the 2017 extreme and uncontrollable circumstances policy could result in a decrease to the CJR model estimated savings ranging between
For purposes of assessing the impact of finalizing this policy for performance years 3 through 5, we note that we are unable to accurately or reasonably model an impact due to our inability to predict future disaster events. It is entirely possible future years could be completely free of major disasters and emergencies that might qualify as triggering events under the extreme and uncontrollable circumstances policy. Likewise, it is entirely possible that future years could have many more significant disaster events that might qualify as triggering events for the extreme and uncontrollable circumstances policy. In the absence of any future knowledge of potential disasters that might qualify as events that would invoke the extreme and uncontrollable circumstances policy, we are assuming that the performance year 2 extreme and uncontrollable circumstances
In accordance with the provisions of Executive Order 12866, this final rule was reviewed by the
List of Subjects in 42 CFR Part 510
Administrative practice and procedure, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the interim final rule published in the
Dated:
Administrator,
Dated:
Alex M. Azar II,
Secretary,
[FR Doc. 2018-12379 Filed 6-7-18;
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