[Federal Register Volume 82, Number 158 (Thursday, August 17, 2017)]
[Proposed Rules]
[Pages 39310-39333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17446]



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Vol. 82

Thursday,

No. 158

August 17, 2017

Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 510 and 512





Medicare Program; Cancellation of Advancing Care Coordination Through 
Episode Payment and Cardiac Rehabilitation Incentive Payment Models; 
Changes to Comprehensive Care for Joint Replacement Payment Model (CMS-
5524-P); Proposed Rule

Federal Register / Vol. 82 , No. 158 / Thursday, August 17, 2017 / 
Proposed Rules

[[Page 39310]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 510 and 512

[CMS-5524-P]
RIN 0938-AT16


Medicare Program; Cancellation of Advancing Care Coordination 
Through Episode Payment and Cardiac Rehabilitation Incentive Payment 
Models; Changes to Comprehensive Care for Joint Replacement Payment 
Model (CMS-5524-P)

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule proposes to cancel the Episode Payment 
Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model 
and to rescind the regulations governing these models. It also proposes 
to revise certain aspects of the Comprehensive Care for Joint 
Replacement (CJR) model, including: Giving certain hospitals selected 
for participation in the CJR model a one-time option to choose whether 
to continue their participation in the model; technical refinements and 
clarifications for certain payment, reconciliation and quality 
provisions; and a change to increase the pool of eligible clinicians 
that qualify as affiliated practitioners under the Advanced Alternative 
Payment Model (APM) track.

DATES: Comment period: To be assured consideration, comments on this 
proposed rule must be received at one of the addresses provided in the 
ADDRESSES section no later than 5 p.m. EDT on October 16, 2017.

ADDRESSES: In commenting, please refer to file code CMS-5524-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-5524-P, P.O. Box 8013, 
Baltimore, MD 21244-1850.Please allow sufficient time for mailed 
comments to be received before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-5524-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850. If you intend to deliver your 
comments to the Baltimore address, call telephone number (410) 786-7195 
in advance to schedule your arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    For questions related to the CJR model: <a href="/cdn-cgi/l/email-protection#c88b829a88aba5bbe6a0a0bbe6afa7be"><span class="__cf_email__" data-cfemail="0241485042616f712c6a6a712c656d74">[email protected]</span></a>.
    For questions related to the EPMs: <a href="/cdn-cgi/l/email-protection#fabfaab7a8afb6bfba999789d4929289d49d958c"><span class="__cf_email__" data-cfemail="4603160b14130a0306252b35682e2e3568212930">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received prior to the submission deadline will also be 
available for public inspection as they are received, generally 
beginning approximately three weeks after publication of a document, at 
the headquarters of the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of 
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view 
public comments, phone 1-800-743-3951.

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through Federal Digital System (FDsys), a 
service of the U.S. Government Printing Office. This database can be 
accessed via the internet at http://www.gpo.gov/fdsys/.

Acronyms

ACE Acute Care Episode Demonstration
ACO Accountable Care Organization
AMI Acute Myocardial Infarction
APM Alternative Payment Model
BPCI Bundled Payments for Care Improvement
CABG Coronary Artery Bypass Graft
CCN CMS Certification Number
CCSQ Center for Clinical Standards and Quality
CEHRT Certified Electronic Health Record Technology
CEO Chief Executive Officer
CFO Chief Financial Officer
CJR Comprehensive Care for Joint Replacement
CMS Centers for Medicare & Medicaid Services
CR Cardiac rehabilitation
CY Calendar Year
E/M Evaluation and Management
EPM Episode payment model
FFS Fee-for-service
FR Federal Register
HACRP Hospital-Acquired Condition Reduction Program
HHS U.S. Department of Health and Human Services
HVBP Hospital Value-Based Purchasing Program
ICD-CM International Classification of Diseases, Clinical 
Modification
IFC Interim Final Rule with Comment Period
IPPS Inpatient Prospective Payment System
LEJR Lower-extremity joint replacement
MPFS Medicare Physician Fee Schedule
MP Malpractice
MSA Metropolitan Statistical Area
MS-DRG Medical Severity Diagnosis-Related Group
NPI National Provider Identifier
NPRA Net Payment Reconciliation Amount
NQF National Quality Forum
OMB Office of Management and Budget
PE Practice Expense
PGP Physician Group Practice

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PRO Patient-Reported Outcome
PY Performance year
QP Qualifying APM Participant
RFA Regulatory Flexibility Act
RSCR Risk-Standardized Complication Rate
RVU Relative Value Unit
SHFFT Surgical hip/femur fracture treatment
THA Total hip arthroplasty
TIN Taxpayer Identification Number
TKA Total knee arthroplasty
UMRA Unfunded Mandates Reform Act

I. Executive Summary

A. Purpose

    The purpose of this proposed rule is to propose to cancel the 
Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) 
incentive payment model, established by the Center for Medicare and 
Medicaid Innovation (Innovation Center) under the authority of section 
1115A of the Social Security Act (the Act), and to rescind the 
regulations at 42 CFR part 512. Additionally, this proposed rule 
proposes to prospectively make participation voluntary for all 
hospitals in approximately half of the geographic areas selected for 
participation in the Comprehensive Care for Joint Replacement (CJR) 
model (that is, in 33 of the 67 Metropolitan Statistical Areas (MSAs) 
selected; (see 80 FR 73299 Table 4)) and for low-volume and rural 
hospitals in all of the geographic areas selected for participation in 
the CJR model. We are also proposing several technical refinements and 
clarifications for certain CJR model payment, reconciliation, and 
quality provisions, and a change to the criteria for the Affiliated 
Practitioner List to broaden the CJR Advanced Alternative Payment Model 
(APM) track to additional eligible clinicians.
    We note that review and reevaluation of policies and programs, as 
well as revised rulemaking, are within an agency's discretion, and that 
discretion is often exercised after a change in administration occurs. 
The EPMs and the CR incentive models were designed as mandatory payment 
models and implemented via notice and comment rulemaking to test the 
effects of bundling cardiac and orthopedic care beginning in 2018 and 
further incentivizing higher value care. The CJR model was also 
designed as a mandatory payment model established via notice and 
comment rulemaking to test the effects of bundling on orthopedic 
episodes involving lower extremity joint replacements; we note that the 
CJR model began on April 1, 2016 and is currently in its second 
performance year.
    While we continue to believe that cardiac and orthopedic episode 
models offer opportunities to redesign care processes and improve 
quality and care coordination across the inpatient and post-acute care 
spectrum while lowering spending, after careful review, we have 
determined that it is appropriate to propose to rescind the regulations 
at 42 CFR part 512, which relate to the EPMs and CR incentive payment 
model, and reduce the geographic scope of the CJR model for the 
following reasons. First, we believe that requiring hospitals to 
participate in additional episode payment models at this time is not in 
the best interest of the agency or the affected providers. Many 
providers are currently engaged in voluntary initiatives with CMS, and 
we expect to continue to offer opportunities for providers to 
participate in voluntary initiatives, including episode-based payment 
models. We are concerned that engaging in large mandatory episode 
payment model efforts at this time may impede our ability to engage 
providers, such as hospitals, in future voluntary efforts. Similarly, 
we also believe that reducing the number of providers required to 
participate in the CJR model will allow us to continue to evaluate the 
effects of such a model while limiting the geographic reach of our 
current mandatory models. We considered altering the design of the EPMs 
and the CR incentive payment model to allow for voluntary participation 
and to take into account other feedback on the models, but as this 
would potentially involve restructuring the model design, payment 
methodologies, financial arrangement provisions and/or quality 
measures, we did not believe that such alterations would offer 
providers enough time to prepare for such changes, given the planned 
January 1, 2018 start date. In addition, if at a later date we decide 
to test these models, or similar models, on a voluntary basis, we would 
not expect to implement them through rulemaking, but rather would use 
methods of soliciting applications and securing participants' agreement 
to participate consistent with how we have implemented other voluntary 
models. Finally, we believe that canceling the EPMs and CR incentive 
payment model, as well as altering the scope of the CJR model, offers 
CMS greater flexibility to design and test other episode-based payment 
models, while still allowing us to test and evaluate the impact of the 
ongoing CJR model on enhancing the quality of care while reducing 
costs. Hospitals in the CJR model have been participating for more than 
a year and a half, and we have begun to give hospitals in the model 
financial and quality results from the first performance year. In many 
cases, CJR hospitals have made investments in care redesign, and we 
want to recognize such investments and commitments to improvement while 
reducing the overall number of hospitals that are required to 
participate.
    We seek public comment on the proposals contained in this proposed 
rule, and also on any alternatives considered.

B. Summary of Economic Effects

    We do not anticipate that our proposal to cancel the EPMs and CR 
incentive payment model prior to the start of those models will have 
any costs to providers. As shown in our impact analysis in section V. 
of this proposed rule, we estimate that the CJR model changes we are 
proposing will reduce the previously projected CJR model savings (82 FR 
603) by approximately $90 million. Therefore, we estimate that the 
total CJR model impact after the changes in this proposed rule will 
save the Medicare program $204 million, instead of $294 million, over 
the remaining 3-year performance period (2018 through 2020) of the CJR 
model. Our impact analysis has some degree of uncertainty and makes 
assumptions as discussed in section V. of this proposed rule. In 
addition to these estimated impacts, as with many of the Innovation 
Center models, the goals that participants are attempting to achieve 
include improving overall quality of care, enhancing participating 
provider infrastructure to support better care management and reducing 
costs. We anticipate there will continue to be a broader focus on care 
coordination and quality improvement through the CJR model among 
hospitals and other providers and suppliers within the Medicare program 
that may lead to better care management and improved quality of care 
for beneficiaries.

II. Statutory Authority and Background

    Under the authority of section 1115A of the Social Security Act 
(the Act), through notice-and-comment rulemaking, CMS' Center for 
Medicare and Medicaid Innovation (Innovation Center) established the 
Comprehensive Care for Joint Replacement model in a final rule titled 
``Medicare Program; Comprehensive Care for Joint Replacement Payment 
Model for Acute Care Hospitals Furnishing Lower Extremity Joint 
Replacement Services'' published in the November 24, 2015 Federal 
Register (80 FR 73274 through 73554) (referred to in this proposed rule 
as the ``CJR model final rule''). We established three new models for 
acute myocardial infarction, coronary artery

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bypass graft, and surgical hip/femur fracture treatment episodes of 
care, which are collectively called the Episode Payment Models (EPMs), 
created a Cardiac Rehabilitation incentive payment model (CR incentive 
payment model), and revised several existing provisions for the CJR 
model, in a final rule titled ``Advancing Care Coordination Through 
Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment 
Model; and Changes to the Comprehensive Care for Joint Replacement 
Model'' published in the January 3, 2017 Federal Register (82 FR 180) 
(referred to in this proposed rule as the ``EPM final rule'').
    The effective date for most of the provisions of the EPM final rule 
was February 18, 2017, and in the EPM final rule we specified an 
effective date of July 1, 2017 for certain CJR model regulatory changes 
intended to align with a July 1, 2017 applicability, or start, date for 
the EPMs and CR incentive payment model. On January 20, 2017, the 
Assistant to the President and Chief of Staff issued a memorandum 
titled ``Regulatory Freeze Pending Review'' that instructed Federal 
agencies to temporarily postpone the effective date for 60 days from 
the date of the memorandum for regulations that had been published in 
the Federal Register but had not taken effect, for purposes of 
reviewing the rules and considering potentially proposing further 
notice-and-comment rulemaking. Accordingly, on February 17, 2017, we 
issued a final rule in the Federal Register (82 FR 10961) to delay 
until March 21, 2017 the effective date of any provisions of the EPM 
final rule that were to become effective on February 18, 2017. We 
subsequently issued an interim final rule with comment (IFC) period in 
the Federal Register on March 21, 2017 (referred to in this proposed 
rule as the ``March 21, 2017 IFC'') (82 FR 14464). The March 21, 2017 
IFC further delayed the effective date of the provisions that were to 
take effect March 21, 2017 until May 20, 2017, further delayed the 
applicability date of the EPMs and CR incentive payment model 
provisions until October 1, 2017, and further delayed the effective 
date of the conforming CJR model changes until October 1, 2017. In the 
March 21, 2017 IFC, we also solicited public comment on further 
delaying the applicability date for the EPMs and CR incentive payment 
provisions, as well as the effective date for the conforming changes to 
the CJR model from October 1, 2017 until January 1, 2018 to allow for 
additional notice-and-comment rulemaking. Based on the public comments 
we received in response to the March 21, 2017 IFC, we published a final 
rule (referred to in this proposed rule as the ``May 19, 2017 final 
delay rule'') on May 19, 2017 (82 FR 22895) to finalize a January 1, 
2018 applicability date for the EPMs and CR incentive payment 
provisions, as well as to finalize a January 1, 2018 effective date for 
the conforming changes to the CJR model (specifically amending Sec.  
510.2; adding Sec.  510.110; amending Sec.  510.120; amending Sec.  
510.405; amending Sec.  510.410; revising Sec.  510.500; revising Sec.  
510.505; adding Sec.  510.506; and amending Sec.  510.515). Additional 
changes to the CJR model, in accordance with the March 21, 2017 IFC, 
took effect May 20, 2017.
    As we stated in the May 19, 2017 final delay rule (82 FR 22897), we 
received a number of comments on the models that did not relate to the 
start date change comment solicitation. These additional comments 
suggested that we reconsider or revise various model aspects, policies 
and design components; in particular, many of these comments suggested 
that we should make participation in the models voluntary instead of 
mandatory. We did not respond to these comments in the May 19, 2017 
final delay rule, as the comments were out of scope of that rulemaking, 
but we stated that we might take them into consideration in future 
rulemaking.
    Our specific proposals are discussed in the following sections of 
this proposed rule.

III. Provisions of the Proposed Regulations

A. Proposed Cancellation of EPMs and Cardiac Rehabilitation Incentive 
Payment Model

    In the January 3, 2017 EPM final rule, we established three bundled 
payment models for acute myocardial infarction (AMI), coronary artery 
bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) 
episodes, and a Cardiac Rehabilitation (CR) incentive payment model. 
These models are similar to other Innovation Center models and focus on 
more complex cases where we believe improvements in care coordination 
and other care redesign efforts offer the potential for improved 
patient outcomes and more efficient use of resources. Many 
stakeholders, including commenters responding to the March 21, 2017 
IFC, have expressed concerns about the provider burden and challenges 
these new models present. As we noted in the May 19, 2017 final delay 
rule (82 FR 22896), which finalized a January 1, 2018 start date for 
the EPMs and the CR incentive payment model, we would engage in notice 
and comment rulemaking on these models if we believed it to be 
warranted. We also noted that we received 47 submissions in response to 
the March 21, 2017 IFC. These responses contained a mix of in- and out-
of-scope comments (82 FR 22899). In the May 19, 2017 final delay rule 
(82 FR 22897), we noted that in addition to commenting on the change to 
the effective date for the EPMs and CR incentive payment model and 
certain provisions of the CJR model, commenters highlighted concerns 
with the models' design, including but not limited to participation 
requirements, data, pricing, quality measures, episode length, CR and 
skilled nursing facility (SNF) waivers, beneficiary exclusions and 
notification requirements, repayment, coding, and model overlap issues. 
Specifically, many commenters were opposed to the mandatory 
participation requirements, arguing that the mandatory nature of these 
models would force many providers who lack familiarity, experience, or 
proper infrastructure to quickly support care redesign efforts for a 
new bundled payment system. Many commenters were concerned that the 
mandatory nature of these models might harm patients and providers 
before CMS knows how these models might affect access to care, quality 
or outcomes in various locations. Additionally, commenters were 
concerned that unrelated services would be incorporated into episode 
prices under the finalized price setting methodology, which bases 
prices on MS-DRGs and identifies excluded, unrelated services rather 
than included, related services based on clinical review. Commenters 
also expressed concern that this pricing approach would result in 
diagnosis codes that would be classified as included services, when in 
fact these services have no clinical relevance to the episode(s). 
Commenters were further concerned with the fact that CMS will 
progressively incorporate regional data into EPM target prices, where 
100 percent of the EPM target price would be based on regional data by 
performance year 4. Commenters also took issue with the quality 
measures established for the SHFFT model, stating that these measures 
are not clinically related to the target population and are 
inappropriate for use in assessing the care provided to beneficiaries 
in the SHFFT model. In addition, commenters requested revisions to the 
CABG EPM to allow participants the option to use a CABG

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composite score developed by the Society of Thoracic Surgeons (STS) 
rather than the all-cause mortality measure.
    Commenters also expressed concerns about the design of the CR 
incentive payment model waivers. Commenters stated that current direct 
supervision requirements would continue to contribute to a lack of 
access to cardiac rehabilitation services and would inhibit providers' 
ability to redesign care for the CR incentive payment model. Commenters 
suggested broadening the CR physician supervision waiver because the 
current waivers would not cover non-model beneficiaries who might be 
obtaining services concurrently with model participants and are 
therefore not sufficient. Other commenters were concerned with the 
precedence rules for model overlap with Models 2, 3 and 4 of the 
Innovation Center's Bundled Payments for Care Improvement (BPCI) 
initiative.
    In the May 19, 2017 final delay rule (82 FR 22895), we stated that 
we might consider these public comments in future rulemaking. Based on 
our additional review and consideration of this stakeholder feedback, 
we have concluded that certain aspects of the design of the EPMs and 
the CR incentive payment model should be improved and more fully 
developed prior to the start of the models, and that moving forward 
with the implementation of the EPMs and CR incentive payment model as 
put forth in the January 3, 2017 EPM final rule would not be in the 
best interest of beneficiaries or providers at this time. Based on our 
acknowledgment of the many concerns about the design of these models 
articulated by stakeholders, we are proposing to cancel the EPMs and CR 
incentive payment model before they begin. Accordingly, we propose to 
rescind 42 CFR part 512 in its entirety.
    We seek public comment on our proposal to cancel the EPMs and CR 
incentive payment model.
    We note that, if the proposal to cancel the EPMs and CR incentive 
payment model is finalized, providers interested in participating in 
bundled payment models may still have an opportunity to do so during 
calendar year (CY) 2018 via new voluntary bundled payment models. 
Building on the BPCI initiative, the Innovation Center expects to 
develop new voluntary bundled payment model(s) during CY 2018 that 
would be designed to meet the criteria to be an Advanced APM. We also 
note the strong evidence base and other positive stakeholder feedback 
that we have received regarding the CR incentive payment model. As we 
further develop the Innovation Center's portfolio of models, we may 
revisit this model and will consider stakeholder feedback for a 
potential new voluntary initiative.

B. Proposed Changes to the CJR Model Participation Requirements

1. Proposed Voluntary Participation Election (Opt-In) for Certain MSAs 
and Low-Volume and Rural Hospitals
    The CJR model began on April 1, 2016. The CJR model is currently in 
the second performance year, which includes episodes ending on or after 
January 1, 2017 and on or before December 31, 2017. The third 
performance year, which includes all CJR episodes ending on or after 
January 1, 2018 and on or before December 31, 2018, would necessarily 
incorporate episodes beginning before January 2018. The fifth, and 
last, performance year would end on December 31, 2020. Currently, with 
limited exceptions, hospitals located in the 67 geographic areas 
selected for participation in the CJR model must participate in the 
model through December 31, 2020; that is, their participation in the 
CJR model is mandatory unless the hospital is an episode initiator for 
a lower-extremity joint replacement (LEJR) episode in the risk-bearing 
period of Models 2 or 4 of the BPCI initiative. Hospitals with a CCN 
primary address in the 67 selected geographic areas that participated 
in Model 1 of the BPCI initiative, which ended on December 31, 2016, 
began participating in the CJR model when their participation in the 
BPCI initiative ended.
    Based on smaller, voluntary tests of episode-based payment models 
and demonstrations, such as the Acute Care Episode (ACE) demonstration 
and the BPCI initiative, that have indicated a potential to improve 
beneficiaries' care while reducing costs (see ACE evaluation at: 
https://downloads.cms.gov/files/cmmi/ace-evaluationreport-final-5-2-14.pdf and BPCI evaluation at: https://innovation.cms.gov/Files/reports/BPCI-EvalRpt1.pdf), we finalized the CJR model with mandatory 
participation in the 67 selected geographic areas so that we could 
further test delivery of better care at a lower cost across a wide 
range of hospitals, including some hospitals that may not otherwise 
participate, in many locations across the country. In the CJR model 
final rule (80 FR 73276), we stated that we believed that by requiring 
the participation of a large number of hospitals with diverse 
characteristics, the CJR model would result in a robust data set for 
evaluation of this bundled payment approach, and would stimulate the 
rapid development of new evidence-based knowledge. Testing the model in 
this manner would also allow us to learn more about patterns of 
inefficient utilization of health care services and how to incentivize 
the improvement of quality for common LEJR procedure episodes.
    After further consideration of stakeholder feedback, including 
responses we received on the March 21, 2017 IFC, we are proposing 
certain revisions to the mandatory participation requirements for the 
CJR model to allow us to continue to evaluate the effects of the model 
while limiting the geographic reach of our current mandatory models. 
Specifically, we are proposing that the CJR model would continue on a 
mandatory basis in approximately half of the selected geographic areas 
(that is, 34 of the 67 selected geographic areas), with an exception 
for low-volume and rural hospitals, and continue on a voluntary basis 
in the other areas (that is, 33 of the 67 selected geographic areas).
    The geographic areas for the CJR model are certain Metropolitan 
Statistical Areas (MSAs) that were selected following the requirements 
in Sec.  510.105 as discussed in the CJR model final rule (80 FR 73297 
through 73299). In Sec.  510.2, an MSA is defined as a core-based 
statistical area associated with at least one urbanized area that has a 
population of at least 50,000. In selecting the 67 MSAs for inclusion 
in the CJR model, the 196 eligible MSAs were stratified into 8 groups 
based on MSA average wage adjusted historic LEJR episode payments and 
MSA population size (80 FR 41207). Specifically, we classified MSAs 
according to their average LEJR episode payment into four categories 
based on the 25th, 50th and 75th percentiles of the distribution of the 
196 potentially selectable MSAs as determined in the exclusion rules as 
applied in the CJR model proposed rule (80 FR 41198). This approach 
ranked the MSAs relative to one another and created four equally sized 
groups of 49. The population distribution was divided at the median 
point for the MSAs eligible for potential selection, creating 8 groups. 
Of the 196 eligible MSAs, we chose 67 MSAs via a stratified random 
selection process as discussed in the CJR model final rule (80 FR 
73291). In reviewing our discussion of the MSA selection and the MSA 
volume needed to provide adequate statistical power to evaluate the 
impact of the model in the CJR model final rule (80 FR 73297), we have 
determined that reducing the mandatory MSA volume in half by selecting 
the 34

[[Page 39314]]

MSAs with the highest average wage-adjusted historic LEJR episode 
payments for continued mandatory participation could still allow us to 
evaluate the effects of the CJR model across a wide range of providers, 
including some that might not otherwise participate in the model. 
Higher payment areas are most likely to have significant room for 
improvement in creating efficiencies and greater variations in practice 
patterns. Thus, the selection of more expensive MSAs is the most 
appropriate approach to fulfilling the overall priorities of the CJR 
model to increase efficiencies and savings for LEJR episodes while 
maintaining or improving the overall quality of care.
    The original determination of the sample size need in the CJR model 
final rule was constructed to be able to observe a 2-percent reduction 
in wage-adjusted episode spending after 1 year. This amount was chosen 
based on the anticipated amount of the discount applied in the target 
price. In considering the degree of certainty that would be needed to 
generate reliable statistical estimates, we assumed a 20 percent chance 
of false positive and a 30 percent chance of a false negative. Using 
these parameters, we determined that the number of MSAs needed ranged 
from 50 to 150. In order to allow for some degree of flexibility, we 
selected 75 MSAs, which were narrowed to 67 due to final exclusion 
criteria.
    As we reviewed the CJR model for this proposed rule, we noted that, 
excluding quarterly reconciliation amounts, evaluation results from 
BPCI Model 2 have indicated possible reductions in fee-for-service 
spending of approximately 3 percent on orthopedic surgery episodes for 
hospitals participating in the LEJR episode bundle. (https://innovation.cms.gov/Files/reports/bpci-models2-4-yr2evalrpt.pdf). We 
examined the sample size needed to detect a 3-percent reduction in CJR 
model episode spending after 1 year using the same methodology as 
described in the CJR model final rule. We determined that we would be 
able to meet this standard with 34 MSAs from the higher cost groups. We 
expect that hospitals in the higher cost MSAs will be able to achieve 
similar 3 percent savings given their MSA's relatively high historic 
episode spending and thus greater opportunities for improvements, and 
their experience in optimizing clinical care pathways to produce 
greater efficacies over the first two performance years of the CJR 
model. We note that the proposed changes to the model, including the 
focus on higher cost MSAs and the reduced number of mandatory MSAs, 
will cause changes to the nature of the evaluation.
    To select the 34 MSAs that would continue to have mandatory 
participation (except for low-volume and rural hospitals), we took the 
distribution of average wage-adjusted historic LEJR episode payments 
for the 67 MSAs using the definition described in the CJR model final 
rule, ordered them sequentially by average wage-adjusted historic LEJR 
episode payments, and then selected the 34 MSAs with the highest 
average payments. Under this proposal to reduce the number of MSAs with 
mandatory participation, the remaining 33 MSAs would no longer be 
subject to the CJR model's mandatory participation requirements; that 
is, hospital participation would be voluntary in these 33 MSAs.
    After dividing the 67 MSAs into 34 mandatory and 33 voluntary MSAs 
as described previously, we examined selected MSA characteristics. In 
order to determine whether a good balance was maintained across MSA 
population size, we examined the number of MSAs below and above the 
median population point of the 196 MSAs eligible for potential 
selection. We observed that a good balance of MSA population size was 
maintained (17 out of 34 mandatory and 17 out of 33 voluntary MSAs had 
a population above the median population). While the 34 MSAs that would 
continue to have mandatory participation have higher spending on 
average, these MSAs all include providers with average cost episodes in 
addition to providers with high cost episodes. In general, we note that 
hospitals located in higher cost areas have a greater potential to 
demonstrate significant decreases in episode spending. However, within 
the higher cost MSAs, there is still significant variation in 
characteristics and experiences of the included hospitals. We 
anticipate the evaluation will be able to assess the generalizability 
of the findings of the CJR model by examining variations of performance 
within the participating hospitals who represent a wide range of 
hospital and market characteristics. Therefore, we are proposing that 
the CJR model would have 34 mandatory participation MSAs (identified in 
Table 1) and 33 voluntary participation MSAs (identified in Table 2) 
for performance years 3, 4, and 5.
    Specifically, we are proposing that, unless an exclusion in Sec.  
510.100(b) applies (that is, for certain hospitals that participate in 
the BPCI initiative), participant hospitals in the proposed 34 
mandatory participation MSAs that are not low-volume or rural (as 
defined in Sec.  510.2 and discussed in the following paragraphs) would 
continue to be required to participate in the CJR model. We are also 
proposing that hospitals in the proposed 33 voluntary participation 
MSAs and hospitals that are low-volume or rural (as defined in Sec.  
510.2 and discussed in the following paragraphs) would have a one-time 
opportunity to notify CMS, in the form and manner specified by CMS, of 
their election to continue their participation in the CJR model on a 
voluntary basis (opt-in) for performance years 3, 4, and 5. Hospitals 
that choose to participate in the CJR model and make a participation 
election that complies with proposed Sec.  510.115 would be subject to 
all model requirements. Hospitals in the proposed 33 voluntary 
participation MSAs and low-volume and rural hospitals (as defined in 
Sec.  510.2 and discussed in the following paragraphs) that do not make 
a participation election would be withdrawn from the CJR model as 
described later in this section of this proposed rule.
    We are proposing to exclude and automatically withdraw low-volume 
hospitals in the proposed 34 mandatory participation MSAs, as 
identified by CMS (see Table 3), from participation in the CJR model 
effective February 1, 2018. Since some low-volume hospitals may want to 
continue their participation in the CJR model, we are proposing to 
allow low-volume hospitals to make a one-time, voluntary participation 
election that complies with the proposed Sec.  510.115 in order for the 
low-volume hospital to continues its participation in the CJR model. We 
are proposing to define a low-volume hospital in Sec.  510.2 as a 
hospital identified by CMS as having fewer than 20 LEJR episodes in 
total across the 3 historical years of data used to calculate the 
performance year 1 CJR episode target prices. Note that under this 
definition, all hospitals listed in Table 3 would meet the definition 
of a low-volume hospital, but this list would not be inclusive of all 
hospitals that could be identified by CMS as a low-volume hospital. For 
example, a new hospital (with a new CCN) that opens in a mandatory MSA 
during the remaining years of the CJR model would not have any LEJR 
episodes during the historical years of data used to calculate the 
performance year 1 CJR episode target prices. Under our proposal, we 
intend that any hospital with a new CCN that comes into existence after 
the proposed voluntary participation election period would not be 
required and/or eligible to join the CJR model. Note that our proposed 
policy for new hospitals

[[Page 39315]]

would not be applicable in the case of a reorganization event where the 
remaining entity is a hospital with a CCN that was participating in the 
CJR model prior to the reorganization event; consistent with our 
current policy, such hospital would continue participation in the CJR 
model regardless of whether all predecessor hospitals were participant 
hospitals prior to the reorganization event.
    We are also proposing to exclude and automatically withdraw rural 
hospitals from participation in the CJR model effective February 1, 
2018. Since some rural hospitals may want to continue their 
participation in the CJR model, we are proposing to allow rural 
hospitals to make a one-time, voluntary participation election that 
complies with the proposed Sec.  510.115 in order for the rural 
hospital to continues its participation in the CJR model. Specifically, 
we are proposing that rural hospitals (as defined in Sec.  510.2) with 
a CCN primary address in the 34 mandatory participation MSAs would have 
a one-time opportunity to opt-in to continue its participation in the 
CJR model during the proposed voluntary participation election period. 
We are proposing that a hospital's change in rural status after the end 
of the voluntary participation election period would not change the 
hospital's CJR model participation requirements. Specifically, we are 
proposing that hospitals in the proposed 34 mandatory participation 
MSAs that are neither low-volume or rural hospitals during the proposed 
voluntary participation election period would be required to 
participate in the CJR model for performance years 3, 4, and 5, and 
that these hospitals would continue to be required to participate in 
the CJR model even if they subsequently become a rural hospital. 
Similarly, we are proposing that a rural hospital that makes a 
voluntary participation election during the one-time opportunity would 
be required to continue participating in the CJR model if that hospital 
no longer meets the definition of rural hospital in Sec.  510.2. We are 
proposing this approach so that CMS can identify the hospitals, by CCN, 
that would participate in the model for the remainder of performance 
year 3 and performance years 4 and 5 at the conclusion of the proposed 
voluntary participation election period and so that there would be less 
confusion about which hospitals are CJR model participants. We seek 
comment on this proposal.

                Table 1--CJR Mandatory Participation MSAs
------------------------------------------------------------------------
                                                           Wage-adjusted
                                                              episode
            MSA                       MSA name             payments (in
                                                                $)
------------------------------------------------------------------------
10420.....................  Akron, OH...................         $28,081
11700.....................  Asheville, NC...............          27,617
12420.....................  Austin-Round Rock, TX.......          28,960
13140.....................  Beaumont-Port Arthur, TX....          32,544
17140.....................  Cincinnati, OH-KY-IN........          28,074
18580.....................  Corpus Christi, TX..........          30,700
20020.....................  Dothan, AL..................          30,710
22500.....................  Florence, SC................          27,901
23540.....................  Gainesville, FL.............          29,370
24780.....................  Greenville, NC..............          27,446
25420.....................  Harrisburg-Carlisle, PA.....          28,360
26300.....................  Hot Springs, AR.............          29,621
28660.....................  Killeen-Temple, TX..........          27,355
31080.....................  Los Angeles-Long Beach-               28,219
                             Anaheim, CA.
31180.....................  Lubbock, TX.................          29,524
32820.....................  Memphis, TN-MS-AR...........          28,916
33100.....................  Miami-Fort Lauderdale-West            33,072
                             Palm Beach, FL.
33740.....................  Monroe, LA..................          30,431
33860.....................  Montgomery, AL..............          30,817
35300.....................  New Haven-Milford, CT.......          27,529
35380.....................  New Orleans-Metairie, LA....          29,562
35620.....................  New York-Newark-Jersey City,          31,076
                             NY-NJ-PA.
36420.....................  Oklahoma City, OK...........          27,267
36740.....................  Orlando-Kissimmee-Sanford,            29,259
                             FL.
37860.....................  Pensacola-Ferry Pass-Brent,           29,485
                             FL.
38300.....................  Pittsburgh, PA..............          30,886
38940.....................  Port St. Lucie, FL..........          30,423
39340.....................  Provo-Orem, UT..............          28,852
39740.....................  Reading, PA.................          28,679
42680.....................  Sebastian-Vero Beach, FL....          28,015
45300.....................  Tampa-St. Petersburg-                 32,424
                             Clearwater, FL.
45780.....................  Toledo, OH..................          28,658
46220.....................  Tuscaloosa, AL..............          31,789
46340.....................  Tyler, TX...................          30,955
------------------------------------------------------------------------


                Table 2--CJR Voluntary Participation MSAs
------------------------------------------------------------------------
                                                           Wage-adjusted
                                                              episode
            MSA                       MSA name             payments (in
                                                                $)
------------------------------------------------------------------------
10740.....................  Albuquerque, NM.............         $25,892
12020.....................  Athens-Clarke County, GA....          25,394

[[Page 39316]]

 
13900.....................  Bismarck, ND................          22,479
14500.....................  Boulder, CO.................          24,115
15380.....................  Buffalo-Cheektowaga-Niagara           26,037
                             Falls, NY.
16020.....................  Cape Girardeau, MO-IL.......          24,564
16180.....................  Carson City, NV.............          26,128
16740.....................  Charlotte-Concord-Gastonia,           26,736
                             NC-SC.
17860.....................  Columbia, MO................          25,558
19500.....................  Decatur, IL.................          24,846
19740.....................  Denver-Aurora-Lakewood, CO..          26,119
20500.....................  Durham-Chapel Hill, NC......          25,151
22420.....................  Flint, MI...................          24,807
23580.....................  Gainesville, GA.............          23,009
26900.....................  Indianapolis-Carmel-                  25,841
                             Anderson, IN.
28140.....................  Kansas City, MO-KS..........          27,261
30700.....................  Lincoln, NE.................          27,173
31540.....................  Madison, WI.................          24,442
33340.....................  Milwaukee-Waukesha-West               25,698
                             Allis, WI.
33700.....................  Modesto, CA.................          24,819
34940.....................  Naples-Immokalee-Marco                27,120
                             Island, FL.
34980.....................  Nashville-Davidson-                   26,880
                             Murfreesboro-Franklin, TN.
35980.....................  Norwich-New London, CT......          25,780
36260.....................  Ogden-Clearfield, UT........          25,472
38900.....................  Portland-Vancouver-                   22,604
                             Hillsboro, OR-WA.
40980.....................  Saginaw, MI.................          25,488
41180.....................  St. Louis, MO-IL............          26,425
41860.....................  San Francisco-Oakland-                23,716
                             Hayward, CA.
42660.....................  Seattle-Tacoma-Bellevue, WA.          23,669
43780.....................  South Bend-Mishawaka, IN-MI.          23,143
44420.....................  Staunton-Waynesboro, VA.....          25,539
45820.....................  Topeka, KS..................          24,273
48620.....................  Wichita, KS.................          25,945
------------------------------------------------------------------------


 Table 3--Low-Volume Hospitals Located In the Mandatory MSAs Eligible To Opt-In During Voluntary Election Period
----------------------------------------------------------------------------------------------------------------
        CCN            Hospital name         MSA                               MSA Title
----------------------------------------------------------------------------------------------------------------
010034.............  Community                  33860  Montgomery, AL.
                      Hospital, Inc.
010062.............  Wiregrass                  20020  Dothan, AL.
                      Medical Center.
010095.............  Hale County                46220  Tuscaloosa, AL.
                      Hospital.
010097.............  Elmore Community           33860  Montgomery, AL.
                      Hospital.
010108.............  Prattville                 33860  Montgomery, AL.
                      Baptist
                      Hospital.
010109.............  Pickens County             46220  Tuscaloosa, AL.
                      Medical Center.
010149.............  Baptist Medical            33860  Montgomery, AL.
                      Center East.
040132.............  Leo N. Levi                26300  Hot Springs, AR.
                      National
                      Arthritis
                      Hospital.
050040.............  LAC-Olive View-            31080  Los Angeles-Long Beach-Anaheim, CA.
                      UCLA Medical
                      Center.
050091.............  Community                  31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital of
                      Huntington Park.
050137.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-
                      Panorama City.
050138.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-Los
                      Angeles.
050139.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-Downey.
050158.............  Encino Hospital            31080  Los Angeles-Long Beach-Anaheim, CA.
                      Medical Center.
050205.............  Glendora                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Community
                      Hospital.
050373.............  LAC+USC Medical            31080  Los Angeles-Long Beach-Anaheim, CA.
                      Center.
050378.............  Pacifica                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital of the
                      Valley.
050411.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-South
                      Bay.
050468.............  Memorial                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital of
                      Gardena.
050543.............  College Hospital           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Costa Mesa.
050548.............  Fairview                   31080  Los Angeles-Long Beach-Anaheim, CA.
                      Developmental
                      Center.
050552.............  Motion Picture &           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Television
                      Hospital.
050561.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-West
                      Los Angeles.
050609.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-Orange
                      County-Anaheim.
050641.............  East Los Angeles           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Doctors
                      Hospital.
050677.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-
                      Woodland Hills.
050723.............  Kaiser                     31080  Los Angeles-Long Beach-Anaheim, CA.
                      Foundation
                      Hospital-
                      Baldwin Park.
050738.............  Greater El Monte           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Community
                      Hospital.
050744.............  Anaheim Global             31080  Los Angeles-Long Beach-Anaheim, CA.
                      Medical Center.
050747.............  South Coast                31080  Los Angeles-Long Beach-Anaheim, CA.
                      Global Medical
                      Center.
050751.............  Miracle Mile               31080  Los Angeles-Long Beach-Anaheim, CA.
                      Medical Center.

[[Page 39317]]

 
050771.............  Coast Plaza                31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital.
050776.............  College Medical            31080  Los Angeles-Long Beach-Anaheim, CA.
                      Center.
050779.............  Martin Luther              31080  Los Angeles-Long Beach-Anaheim, CA.
                      King Jr.
                      Community
                      Hospital.
050780.............  Foothill Medical           31080  Los Angeles-Long Beach-Anaheim, CA.
                      Center.
050782.............  Casa Colina                31080  Los Angeles-Long Beach-Anaheim, CA.
                      Hospital.
070038.............  Connecticut                35300  New Haven-Milford, CT.
                      Hospice Inc.
070039.............  Masonic Home and           35300  New Haven-Milford, CT.
                      Hospital.
100048.............  Jay Hospital....           37860  Pensacola-Ferry Pass-Brent, FL.
100130.............  Lakeside Medical           33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      Center.
100240.............  Anne Bates Leach           33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      Eye Hospital.
100277.............  Douglas Gardens            33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      Hospital.
100320.............  Poinciana                  36740  Orlando-Kissimmee-Sanford, FL.
                      Medical Center.
100326.............  Promise Hospital           33100  Miami-Fort Lauderdale-West Palm Beach, FL.
                      of Miami.
190005.............  University                 35380  New Orleans-Metairie, LA.
                      Medical Center
                      New Orleans.
190011.............  University                 33740  Monroe, LA.
                      Health Conway.
190079.............  St. Charles                35380  New Orleans-Metairie, LA.
                      Parish Hospital.
190245.............  Monroe Surgical            33740  Monroe, LA.
                      Hospital.
190300.............  St. Charles                35380  New Orleans-Metairie, LA.
                      Surgical
                      Hospital LLC.
190302.............  Omega Hospital             35380  New Orleans-Metairie, LA.
                      LLC.
190308.............  St. Bernard                35380  New Orleans-Metairie, LA.
                      Parish Hospital.
190313.............  New Orleans East           35380  New Orleans-Metairie, LA.
                      Hospital.
250012.............  Alliance                   32820  Memphis, TN-MS-AR.
                      Healthcare
                      System.
250126.............  North Oak                  32820  Memphis, TN-MS-AR.
                      Regional
                      Medical Center.
250167.............  Methodist Olive            32820  Memphis, TN-MS-AR.
                      Branch Hospital.
310058.............  Bergen Regional            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Medical Center.
330080.............  Lincoln Medical            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      & Mental Health
                      Center.
330086.............  Montefiore Mount           35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Vernon Hospital.
330100.............  New York Eye and           35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Ear Infirmary.
330199.............  Metropolitan               35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital Center.
330231.............  Queens Hospital            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Center.
330233.............  Brookdale                  35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital
                      Medical Center.
330240.............  Harlem Hospital            35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Center.
330385.............  North Central              35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Bronx Hospital.
330396.............  Woodhull Medical           35620  New York-Newark-Jersey City, NY-NJ-PA.
                      and Mental
                      Health Center.
330397.............  Interfaith                 35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Medical Center.
330399.............  St. Barnabas               35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital.
330405.............  Helen Hayes                35620  New York-Newark-Jersey City, NY-NJ-PA.
                      Hospital.
360241.............  Edwin Shaw Rehab           10420  Akron, OH.
                      Institute.
370011.............  Mercy Hospital             36420  Oklahoma City, OK.
                      El Reno Inc..
370158.............  Purcell                    36420  Oklahoma City, OK.
                      Municipal
                      Hospital.
370199.............  Lakeside Women's           36420  Oklahoma City, OK.
                      Hospital A
                      Member of
                      INTEGRIS Health.
370206.............  Oklahoma Spine             36420  Oklahoma City, OK.
                      Hospital.
370215.............  Oklahoma Heart             36420  Oklahoma City, OK.
                      Hospital.
370234.............  Oklahoma Heart             36420  Oklahoma City, OK.
                      Hospital South.
390184.............  Highlands                  38300  Pittsburgh, PA.
                      Hospital.
390217.............  Excela Health              38300  Pittsburgh, PA.
                      Frick Hospital.
420057.............  McLeod Medical             22500  Florence, SC.
                      Center-
                      Darlington.
420066.............  Lake City                  22500  Florence, SC.
                      Community
                      Hospital.
440131.............  Baptist Memorial           32820  Memphis, TN-MS-AR.
                      Hospital Tipton.
450143.............  Seton Smithville           12420  Austin-Round Rock, TX.
                      Regional
                      Hospital.
450605.............  Care Regional              18580  Corpus Christi, TX.
                      Medical Center.
450690.............  University of              46340  Tyler, TX.
                      Texas Health
                      Science Center
                      at Tyler.
450865.............  Seton Southwest            12420  Austin-Round Rock, TX.
                      Hospital.
460043.............  Orem Community             39340  Provo-Orem, UT.
                      Hospital.
670087.............  Baylor Scott &             12420  Austin-Round Rock, TX.
                      White Emergency
                      Medical Center-
                      Cedar Park.
----------------------------------------------------------------------------------------------------------------

    As stated previously in this section, we are proposing a one-time 
participation election period for hospitals with a CCN primary address 
located in the voluntary participation MSAs listed in Table 2, low-
volume hospitals specified in Table 3, and rural hospitals in the 
mandatory participation MSAs. Based on the anticipated timing for when 
the final rule implementing this proposal would be published, we 
propose that the voluntary participation election period would begin 
January 1, 2018, and would end January 31, 2018. We must receive the 
participation election letter no later than January 31, 2018. We are 
proposing that the hospital's participation election letter would serve 
as the model participant agreement. Voluntary participation would begin 
February 1, 2018, and continue through the end of the CJR model, unless 
sooner terminated. Thus, participant hospitals located in the voluntary 
participation MSAs listed in Table 2, the low-volume hospitals 
specified in Table 3, and the rural hospitals in the 34 mandatory 
participation MSAs that elect voluntary participation would continue in 
the CJR

[[Page 39318]]

model without any disruption to episodes attributed to performance year 
3, which begins January 1, 2018. Participant hospitals located in the 
voluntary participation MSAs listed in Table 2, the low-volume 
hospitals specified in Table 3, and the rural hospitals in the 34 
mandatory participation MSAs that do not elect voluntary participation 
would be withdrawn from the model effective February 1, 2018, and all 
of their performance year 3 episodes up to and including that date 
would be canceled, so that these hospitals would not be subject to a 
reconciliation payment or repayment amount for performance year 3. We 
are proposing to implement our proposed opt-in approach in this manner 
as a way to balance several goals, including establishing a uniform 
time period for hospitals to make a voluntary participation election, 
avoiding disruption of episodes for hospitals that elect to continue 
their participation in the CJR model, and preventing confusion about 
whether a hospital is participating in performance year 3 of the model. 
Specifically, we considered whether adopting a voluntary election 
period that ended prior to the start of performance year 3 would be 
less confusing and less administratively burdensome in terms of whether 
a hospital is participating in performance year 3. To implement this 
approach, the voluntary participation election period would have to 
close by December 31, 2017, such that each hospital would have made its 
determination regarding participation in performance year 3 before the 
start of performance year 3 (note that episodes attributed to 
performance year 3 would still be canceled under this alternative 
approach for eligible hospitals that do not make a participation 
election). Because the voluntary election period under this approach 
would conclude in advance of the relevant CJR model performance year, 
this approach could simplify our administration of performance year 3 
by establishing in advance of performance year 3 whether a hospital 
would be a participant hospital for the totality of performance year 3. 
However, given the timing of this proposed rulemaking, we were not 
confident that hospitals would have sufficient time to make a voluntary 
participation election by December 31, 2017. Thus, we are proposing 
that the voluntary participation election period would occur during the 
first month of performance year 3 (that is, throughout January 2018) 
and would apply prospectively beginning on February 1, 2018. We believe 
this approach will best ensure adequate time for hospitals to make a 
participation election while minimizing the time period during which 
participation in performance year 3 remains mandatory for all eligible 
hospitals in the 67 selected MSAs. We note that based on timing 
considerations, including potential changes to the anticipated date of 
publication of the final rule, we may modify the dates of the voluntary 
participation election period and make conforming changes to the dates 
for voluntary participation in performance year 3. We seek comment on 
the proposed voluntary participation election period, including whether 
we should instead require the participation election to be made by 
December 31, 2017 (that is, prior to the start of performance year 3) 
or if a different or later voluntary election period may be preferable.
    To specify their participation election, we are proposing that 
hospitals would submit a written participation election letter to CMS 
in a form and manner specified by CMS. We intend to provide templates 
that can easily be completed and submitted in order to limit the burden 
on hospitals seeking to opt-in. If a hospital with a CCN primary 
address located in the voluntary participation MSAs or a low-volume or 
rural hospital in the mandatory participation MSAs does not submit a 
written participation election letter by January 31, 2018, the 
hospital's participation in performance year 3 would end, all of its 
performance year 3 episodes would be canceled, and it would not be 
included in the CJR model for performance years 4 and 5.
    We are proposing a number of requirements for the participation 
election letter and that the hospital's participation election letter 
would serve as the model participant agreement. First, we are proposing 
that the participation election letter must include all of the 
following:
    <bullet> Hospital Name.
    <bullet> Hospital Address.
    <bullet> Hospital CCN.
    <bullet> Hospital contact name, telephone number, and email 
address.
    <bullet> If selecting the Advanced APM track, attestation of CEHRT 
use as defined in Sec.  414.1305.
    Second, we are proposing that the participation election letter 
must include a certification in a form and manner specific by CMS 
that--
    <bullet> The hospital will comply with all requirements of the CJR 
model (that is, 42 CFR 510) and all other laws and regulations that are 
applicable to its participation in the CJR model; and
    <bullet> Any data or information submitted to CMS will be accurate, 
complete and truthful, including, but not limited to, the participation 
election letter and any quality data or other information that CMS uses 
in reconciliation processes or payment calculations or both.
    We solicit feedback on this proposed certification requirement, 
including whether the certification should include different or 
additional attestations.
    Finally, we are proposing that the participation election letter be 
signed by the hospital administrator, chief financial officer (CFO) or 
chief executive officer (CEO).
    We are proposing that, if the hospital's participation election 
letter meets these criteria, we would accept the hospital's 
participation election. Once a participation election for the CJR model 
is made and is effective, the participant hospital would be required to 
participate in all activities related to the CJR model for the 
remainder of the CJR model unless the hospital's participation is 
terminated sooner.
    We note that episodes end 90 days after discharge for the CJR model 
and episodes that do not start and end in the same calendar year will 
be attributed to the following performance year. For example, episodes 
that start in October 2017 and do not end on or before December 31, 
2017 are attributed to performance year 3. Our methodology for 
attributing these episodes to the subsequent performance year would be 
problematic in cases where a hospital with a CCN primary address 
located in a voluntary participation MSA or a rural hospital or a low-
volume hospital, as specified by CMS, has not elected to voluntarily 
continue participating in the model. Therefore, for a hospital with a 
CCN primary address located in a voluntary participation MSA, or a 
rural hospital or a low-volume hospital, as specified by CMS, that does 
not elect voluntary participation during the one-time voluntary 
participation election period, we are proposing that all episodes 
attributed to performance year 3 for that hospital would be canceled 
and would not be included in payment reconciliation. Such hospitals 
would have their participation in the CJR model withdrawn effective 
February 1, 2018. We note that this proposal is consistent with our 
policy for treatment of episodes that have not ended by or on the last 
day of performance year 5 and cannot be included in performance year 5 
reconciliation due to the end of the model (see Table 8 of the CJR 
model final rule (80 FR 73326)).
    We are proposing to define a low-volume hospital, mandatory MSA, 
and voluntary MSA, to change the definition of participant hospital in 
Sec.  510.2, and to amend the specification of the

[[Page 39319]]

geographic areas in Sec.  510.105(a) to reflect the establishment of 
mandatory and voluntary participation MSAs. We are proposing to codify 
the opt-in proposal in new Sec.  510.115. In addition, we are proposing 
to post the list of mandatory participation MSAs, voluntary 
participation MSAs, and low-volume hospitals on the CJR model Web site.
    We believe our proposed opt-in approach to allow for voluntary 
participation in the CJR model by certain hospitals would be less 
burdensome on such hospitals than a potential alternative approach of 
requiring hospitals to opt-out of the model. In developing the proposal 
to allow eligible hospitals located in the proposed 33 voluntary 
participation MSAs and low-volume and rural hospitals located in the 34 
mandatory participation MSAs to elect voluntary participation, we 
considered whether to propose that hospitals would have to make an 
affirmative voluntary participation election (that is, an opt-in 
approach) or to propose that these hospitals would continue to be 
required to participate in the CJR model unless written notification 
was given to CMS to withdraw the hospital from the CJR model (that is, 
an opt-out approach). We believe an opt-in approach would be less 
burdensome on hospitals, because it would not require participation in 
the CJR model for hospitals located in the proposed 33 voluntary 
participation MSAs and for low-volume and rural hospitals located in 
the 34 mandatory participation MSAs unless the hospital affirmatively 
chose it. Further, we believe requiring an affirmative opt-in election 
would result in less ambiguity about a hospital's participation 
intentions as compared to an opt-out approach. Specifically, with an 
opt-in approach, a hospital's participation election would document 
each hospital's choice, whereas under an opt-out approach there could 
be instances where hospitals fail to timely notify CMS of their desire 
to withdraw from participation and are thus included in the model and 
subject to potential repayment amounts. For these reasons, we have 
proposed an opt-in approach. We seek comment on this proposal and the 
alternative considered.
    We also believe that our proposed approach to make the CJR model 
primarily concentrated in the higher cost MSAs where the opportunity 
for further efficiencies and care redesign may be more likely and allow 
voluntary participation in the lower cost MSAs and for low-volume and 
rural hospitals allows the Innovation Center to focus on areas where 
the opportunity for further efficiencies and care redesign may be more 
likely, while still allowing hospitals in the voluntary MSAs the 
opportunity to participate in the model. In developing this proposed 
rule, we considered that hospitals in the CJR model have been 
participating for over a year and a half as of the timing of this 
proposed rule, and we have begun to give hospitals in the model 
financial and quality results from the first performance year. In many 
cases, participant hospitals have made investments in care redesign, 
and we want to recognize such investments and commitments to 
improvement while reducing the overall number of hospitals that are 
required to participate. We also considered stakeholder feedback that 
suggested we make participation in the CJR model voluntary, and the 
model size necessary to detect at least a 3-percent reduction in LEJR 
episode spending. Taking these considerations into account, we 
considered whether revising the model to allow for voluntary 
participation in all, some, or none of the 67 selected MSAs would be 
feasible.
    As discussed in section V. of this proposed rule, the estimated 
impact of the changes to the CJR model proposed in this proposed rule 
reduces the overall estimated savings for performance years 3, 4, and 5 
by $90 million. If voluntary participation was allowed in all of the 67 
selected MSAs, the overall estimated model impact would no longer show 
savings, and would likely result in additional costs to the Medicare 
program. If participation was limited to the proposed 34 mandatory 
participation MSAs and voluntary participation was not allowed in any 
MSA, the impact to the overall estimated model savings over the last 
three years of the model would be closer to $30 million than the $90 
million estimate presented in section V. of this proposed rule, because 
our modeling, which does not include assumptions about behavioral 
changes that might lower fee-for-service spending, estimates that 60 to 
80 hospitals will choose voluntary participation. Since we estimate 
that these potential voluntary participants would be expected to earn 
only positive reconciliation payments under the model, these positive 
reconciliation payments would offset some of the savings garnered from 
mandatory participants. However, as many current hospital participants 
in all of the 67 MSAs are actively invested in the CJR model, we are 
proposing to allow voluntary participation in the 33 MSAs that were not 
selected for mandatory participation and for low-volume and rural 
hospitals. We seek comment on our proposed approach and the 
alternatives considered.
    A summary of the proposed changes to the CJR model participation 
requirements is shown in Table 4.

                   Table 4--Proposed Participation Requirements for Hospitals in the CJR Model
----------------------------------------------------------------------------------------------------------------
                                     Required to                                                       Election
                                  participate as of     May elect  voluntary       Participation      effective
                                  February 1, 2018          participation         election period        date
----------------------------------------------------------------------------------------------------------------
                                          Mandatory Participation MSAs
----------------------------------------------------------------------------------------------------------------
All IPPS participant           Yes...................  No....................                   n/a          n/a
 hospitals, except rural and
 low-volume *.
Rural hospitals *............  No....................  Yes...................    1/1/2018-1/31/2018     2/1/2018
Low-volume hospitals (see      No....................  Yes...................    1/1/2018-1/31/2018     2/1/2018
 Table 3).
----------------------------------------------------------------------------------------------------------------
                                          Voluntary Participation MSAs
----------------------------------------------------------------------------------------------------------------
All IPPS participant           No....................  Yes...................    1/1/2018-1/31/2018     2/1/2018
 hospitals.
----------------------------------------------------------------------------------------------------------------
* Note: Participation requirements are based on the CCN status of the hospital as of January 31, 2018. A change
  in rural status after the voluntary election period does not affect the participation requirements.


[[Page 39320]]

2. Proposed Codification of CJR Model-Related Evaluation Participation 
Requirements
    We note that for the CJR model evaluation, the data collection 
methods and key evaluation research questions under the proposed 
reformulated approach (that is, the proposal for voluntary opt-in 
elections discussed in section III.B.1 of this proposed rule) would 
remain similar to the approach presented in the CJR model final rule. 
The evaluation methodology for the CJR model would be consistent with 
the standard Innovation Center approaches we have taken in other 
voluntary models such as the Pioneer Accountable Care Organization 
(ACO) Model. Cooperation and participation in model-related activities 
by all hospitals that participate in the CJR model would continue to be 
extremely important to the evaluation. Therefore, with respect to 
model-related evaluation activities, we propose to add provisions in 
Sec.  510.410(b)(1)(i)(G) to specify that CMS may take remedial action 
if a participant hospital, or one of its collaborator, collaboration 
agent, or downstream collaboration agent fails to participate in model-
related evaluation activities conducted by CMS and/or its contractors 
for any performance year in which the hospital participates. We believe 
the addition of this provision would make participation and 
collaboration requirements for the CJR model evaluation clear to all 
participant hospitals and in particular to hospitals that are eligible 
to elect voluntary participation. We seek comment on our proposed 
regulatory change.
3. Comment Solicitation: Incentivizing Participation in the CJR Model
    In this proposed rule, we are proposing to make participation in 
the CJR model voluntary in 33 MSAs and for low-volume and rural 
hospitals in the remaining 34 MSAs via the proposed opt-in election 
policy discussed in section III.B.1 of this proposed rule. In order to 
keep hospitals in all MSAs selected for participation in the CJR model 
actively participating in the model, we are soliciting comment on ways 
to further incentivize eligible hospitals to elect to continue 
participating in the CJR model for the remaining years of the model and 
to further incentivize all participant hospitals to advance care 
improvements, innovation, and quality for beneficiaries throughout LEJR 
episodes.
    Additionally, we note that, under the CJR refinements established 
in the January 3, 2017 EPM final rule, the total amount of gainsharing 
payments for a performance year paid to physicians, non-physician 
practitioners, physician group practices (PGPs), and non-physician 
practitioner group practices (NPPGPs) must not exceed 50 percent of the 
total Medicare approved amounts under the Physician Fee Schedule for 
items and services that are furnished to beneficiaries during episodes 
that occurred during the same performance year for which the CJR 
participant hospital accrued the internal cost savings or earned the 
reconciliation payment that comprises the gainsharing payment being 
made (Sec.  510.500(c)(4)). Similarly, distribution arrangements are 
limited as specified in Sec.  510.505(b)(8), and downstream 
distribution arrangements are limited as specified in Sec.  
510.506(b)(8). These program integrity safeguards, which are consistent 
with the gainsharing caps in other Innovation Center models, were 
included to avoid setting an inappropriate financial incentive that may 
result in stinting, steering or denial of medically necessary care (80 
FR 73415 and 73416). While we are not proposing in this rule any 
changes to the gainsharing caps for these models, we have heard various 
opinions from stakeholders, including the Medicare Payment Advisory 
Commission (MedPAC), on the relative benefit of such limitations on 
gainsharing and in this proposed rule we are soliciting comment on this 
requirement and any alternative gainsharing caps that may be 
appropriate to apply to physicians, non-physician practitioners, PGPs, 
and NPPGPs.

C. Maintaining ICD-CM Codes for Quality Measures

    In the CJR model final rule (80 FR 73474), we discussed how 
specific International Classification of Diseases (ICD)--Clinical 
Modifications (CM) procedure codes define group of procedures included 
in the Hospital-level risk-standardized complication rate (RSCR) 
following elective primary total hip arthroplasty (THA) and/or total 
knee arthroplasty (TKA) (NQF #1550) (Hip/Knee Complications) measure. 
In discussing quality measures in general, the ICD-CM codes relative to 
defining a measure cohort are updated annually and are subject to 
change. For example, in the EPM final rule (82 FR 389), we itemized 
specific ICD-9-CM and ICD-10-CM codes for Hip/Knee Complications 
measure. As quality measures are refined and maintained, the ICD-CM 
code values used to identify the relevant diagnosis and/or procedures 
included in quality measures can be updated. For example, CMS' Center 
for Clinical Standards and Quality (CCSQ) has recently updated the list 
of ICD-10 codes used to identify procedures included in the Hip/Knee 
Complications measure. We did not intend for our preamble discussions 
of certain ICD-CM codes used, for example, to identify procedures 
included in the Hip/Knee Complications measures, and therefore the PRO 
cohorts for the CJR model, to set a policy that would define the 
relevant cohorts for the entirety of the CJR model. We should have also 
directed readers to look for the most current codes on the CMS quality 
Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html. 
To ensure that model participants are aware of periodic ICD-CM code 
updates to the Hip/Knee Complications measure, we are proposing to 
clarify that participants must use the applicable ICD-CM code set that 
is updated and released to the public each calendar year in April by 
CCSQ and posted on the Hospital Quality Initiative Measure Methodology 
Web site (https://www.cms.gov/medicare/Quality-Initiatives-Patient-
Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html) 
for purposes of reporting each of those measures. CMS relies on the 
National Quality Forum (NQF) measure maintenance update and review 
processes to update substantive aspects of measures every 3 years. 
Through NQF's measure maintenance process, NQF endorsed measures are 
sometimes updated to incorporate changes that we believe do not 
substantially change the nature of the measures. Examples of such 
changes include updated diagnosis or procedures codes, changes to 
patient population, definitions, or extension of the measure 
endorsement to apply to other settings. We believe these types of 
maintenance changes are distinct from more substantive changes and do 
not require the use of the agency's regulatory process used to update 
more detailed aspects of quality measures.

D. Clarification of CJR Reconciliation Following Hospital 
Reorganization Event

    In the CJR model final rule (80 FR 73348) rule, we discussed our 
method of setting target prices using all historical episodes that 
would represent our best estimate of historical volume and payments for 
participant hospitals when an acquisition, merger, divestiture, or 
other reorganization results in a hospital with a new CCN. When a 
reorganization event occurs during a performance year,

[[Page 39321]]

CMS updates the quality-adjusted episode target prices for the new or 
surviving participant hospital (Sec.  510.300(b)(4)). Following the end 
of a performance year, CMS performs annual reconciliation calculations 
in accordance with the provisions established in Sec.  510.305. The 
annual reconciliation calculations are specific to the episodes 
attributable to each participant hospital entity for that performance 
year. The applicable quality-adjusted episode target price for such 
episodes is the quality-adjusted episode target price that applies to 
the episode type as of the anchor hospitalization admission date (Sec.  
510.300(a)(3)). For example, if during a performance year, two 
participant hospitals (Hospital A and Hospital B) merge under the CCN 
of one of those two participant hospital's CCN (Hospital B's CCN), 
(assuming no other considerations apply) three initial (and three 
subsequent) annual reconciliation calculations for that performance 
year are performed: An initial (and subsequent) reconciliation for 
Hospital A for the episodes where the anchor hospitalization admission 
occurred prior to the merger (as determined by the CCN on the IPPS 
claim), using Hospital A's episode target price for that time period; 
an initial (and subsequent) reconciliation for Hospital B for the 
episodes where anchor hospitalization admission occurred before the 
merger (as determined by the CCN on the IPPS claim), using Hospital B's 
episode target price for that time period; and an initial (and 
subsequent) reconciliation for the post-merger entity (merged Hospitals 
A and B) for the episodes where anchor hospitalization admission 
occurred on or after the merger's effective date, using the episode 
target price that time period. Reorganization events that involve a CJR 
model participant hospital and a hospital that is not participating in 
the CJR model and result in the new organization operating under the 
CJR participant hospital's CCN, would not affect the reconciliation for 
the CJR participant hospital for episodes that initiate before the 
effective date of the reorganization event. Episodes that initiate 
after such reorganization event would be subject to an updated quality-
adjusted episode target price that is based on historical episodes for 
the CJR participant hospital which would include historical episode 
expenditures for all hospitals that are integrated under the surviving 
CCN. These policies have been in effect since the start of the CJR 
model on April 1, 2016. To further clarify this policy for the CJR 
model, we propose to add a provision specifying that separate 
reconciliation calculations are performed for episodes that occur 
before and after a reorganization that results in a hospital with a new 
CCN at Sec.  510.305(d)(1). We believe this clarification would 
increase transparency and understanding of the payment reconciliation 
processes for the CJR model. We seek comment on this proposal.

E. Proposed Adjustment to the Pricing Calculation for the CJR 
Telehealth HCPCS Codes To Include the Facility PE Values

    In the CJR model final rule (80 FR 73450), we established 9 HCPCS 
G-codes to report home telehealth evaluation and management (E/M) 
visits furnished under the CJR telehealth waiver as displayed in Table 
5. These codes have been payable for CJR model beneficiaries since the 
CJR model began on April 1, 2016. Pricing for these 9 codes is updated 
each calendar year to reflect the work and malpractice (MP) relative 
value units (RVUs) for the comparable office and other outpatient E/M 
visit codes on the Medicare Physician Fee Schedule (MPFS). As we stated 
in the CJR model final rule (80 FR 73450), in finalizing this pricing 
method for these codes, we did not include the practice expense (PE) 
RVUs of the comparable office and other outpatient E/M visit codes in 
the payment rate for these unique CJR model services, based on the 
belief that practice expenses incurred to furnish these services are 
marginal or are paid for through other MPFS services. However, since 
the publication of the CJR model final rule, stakeholders have 
expressed concern that the zero value assigned to the PE RVUs for these 
codes results in inaccurate pricing. Stakeholders assert that there are 
additional costs related to the delivery of telehealth services under 
the CJR model such as maintaining the telecommunications equipment, 
software and security and that, while these practice expense costs are 
not equivalent to in-person service delivery costs, they are greater 
than zero. In considering the pricing concerns voiced by stakeholders, 
we recognize that there are resource costs in practice expense for 
telehealth services furnished remotely, however, we do not believe the 
current PE methodology and data accurately account for these costs 
relative to the PE resource costs for other services. This belief 
previously led us to assign zero PE RVUs in valuing these services, but 
because we recognize that there are some costs that are not being 
accounted for by the current pricing for these CJR model codes, we 
believe an alternative to assigning zero PE RVUs would be to use the 
facility PE RVUs for the analogous in-person services. While we 
acknowledge that assigning the facility PE RVUs would not provide a 
perfect reflection of practice resource costs for remote telehealth 
services under the CJR model, in the absence of more specific 
information, we believe it is likely a better proxy for such PE costs 
than zero. Therefore, we are proposing to use the facility PE RVUs for 
the analogous services in pricing the 9 CJR HCPCS G codes shown in 
Table 5. Additionally, we are proposing to revise Sec.  510.605(c)(2) 
to reflect the addition of the RVUs for comparable codes for the 
facility PE to the work and MP RVUs we are currently using for the 
basis for payment of the CJR telehealth waiver G codes.

[[Page 39322]]



                          Table 5--HCPCS Codes for Telehealth Visits for CJR Model Beneficiaries in Home or Place of Residence
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Work and MP RVUs equal to
                                                                                                                              those of the corresponding
                                                                                                                             office/outpatient E/M visit
     HCPCS  Code No.                       Long descriptor                                  Short descriptor                  CPT code for same calendar
                                                                                                                             year under the PFS; PE RVUs
                                                                                                                                equal to the facility
                                                                                                                                   values for each
--------------------------------------------------------------------------------------------------------------------------------------------------------
G9481....................  Remote in-home visit for the evaluation and      Remote E/M new pt 10 mins......................                        99201
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                           <bullet> A problem focused history.............
                           <bullet> A problem focused examination.........
                           <bullet> Straightforward medical decision
                            making, furnished in real time using
                            interactive audio and video technology..
                           Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            self limited or minor. Typically, 10 minutes
                            are spent with the patient or family or both
                            via real time, audio and video
                            intercommunications technology.
G9482....................  Remote in-home visit for the evaluation and      Remote E/M new pt 20 mins......................                        99202
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                           <bullet> An expanded problem focused history...
                           <bullet> An expanded problem focused
                            examination..
                           <bullet> Straightforward medical decision
                            making, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of low to moderate severity. Typically, 20
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9483....................  Remote in-home visit for the evaluation and      Remote E/M new pt 30 mins......................                        99203
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                           <bullet> A detailed history....................
                           <bullet> A detailed examination................
                           <bullet> Medical decision making of low
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate severity. Typically, 30 minutes
                            are spent with the patient or family or both
                            via real time, audio and video
                            intercommunications technology.
G9484....................  Remote in-home visit for the evaluation and      Remote E/M new pt 45 mins......................                        99204
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                           <bullet> A comprehensive history...............
                           <bullet> A comprehensive examination...........

[[Page 39323]]

 
                           <bullet> Medical decision making of moderate
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 45
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9485....................  Remote in-home visit for the evaluation and      Remote E/M new pt 60 mins......................                        99205
                            management of a new patient for use only in
                            the Medicare-approved Comprehensive Care for
                            Joint Replacement model, which requires these
                            3 key components:
                           <bullet> A comprehensive history...............
                           <bullet> A comprehensive examination...........
                           <bullet> Medical decision making of high
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 60
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9486....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 10 mins.....................                        99212
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                           <bullet> A problem focused history.............
                           <bullet> A problem focused examination.........
                           <bullet> Straightforward medical decision
                            making, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            self limited or minor. Typically, 10 minutes
                            are spent with the patient or family or both
                            via real time, audio and video
                            intercommunications technology.
G9487....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 15 mins.....................                        99213
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                           <bullet> An expanded problem focused history...
                           <bullet> An expanded problem focused
                            examination..
                           <bullet> Medical decision making of low
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of low to moderate severity. Typically, 15
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.

[[Page 39324]]

 
G9488....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 25 mins.....................                        99214
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                           <bullet> A detailed history....................
                           <bullet> A detailed examination................
                           <bullet> Medical decision making of moderate
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 25
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
G9489....................  Remote in-home visit for the evaluation and      Remote E/M est. pt 40 mins.....................                        99215
                            management of an established patient for use
                            only in the Medicare-approved Comprehensive
                            Care for Joint Replacement model, which
                            requires at least 2 of the following 3 key
                            components:
                           <bullet> A comprehensive history...............
                           <bullet> A comprehensive examination...........
                           <bullet> Medical decision making of high
                            complexity, furnished in real time using
                            interactive audio and video technology.
                            Counseling and coordination of care with other
                            physicians, other qualified health care
                            professionals or agencies are provided
                            consistent with the nature of the problem(s)
                            and the needs of the patient or the family or
                            both. Usually, the presenting problem(s) are
                            of moderate to high severity. Typically, 40
                            minutes are spent with the patient or family
                            or both via real time, audio and video
                            intercommunications technology.
--------------------------------------------------------------------------------------------------------------------------------------------------------

F. Clinician Engagement Lists

1. Background for Submission of Clinician Engagement Lists
    Under the Quality Payment Program, the Advanced APM track of the 
CJR model does not include eligible clinicians on a Participation List; 
rather the CJR Advanced APM track currently includes eligible 
clinicians on an Affiliated Practitioner List as defined under Sec.  
414.1305 and described under Sec.  414.1425(a)(2) of the agency's 
Quality Payment Program regulations. As such, the Affiliated 
Practitioner List for the CJR model is the ``CMS-maintained list'' of 
eligible clinicians that have ``a contractual relationship with the 
Advanced APM Entity [for CJR, the participant hospital] for the 
purposes of supporting the Advanced APM Entity's quality or cost goals 
under the Advanced APM.'' As specified in our regulations at Sec.  
414.1425(a)(2), CMS will use this list to identify the eligible 
clinicians who will be assessed as Qualifying APM Participants (QPs) 
for the year. CMS will make QP determinations individually for these 
eligible clinicians as specified in Sec. Sec.  414.1425(b)(2), (c)(4), 
and 414.1435.
    In the EPM final rule, we stated that a list of physicians, 
nonphysician practitioners, or therapists in a sharing arrangement, 
distribution arrangement, or downstream distribution arrangement, as 
applicable, would be considered an Affiliated Practitioner List of 
eligible clinicians who are affiliated with and support the Advanced 
APM Entity in its participation in the Advanced APM for purposes of the 
Quality Payment Program. An in-depth discussion of how the clinician 
financial arrangement list is considered an Affiliated Practitioner 
List can be found in section V.O. of the EPM final rule (82 FR 558 
through 563). The clinician financial arrangements list (Sec.  
510.120(b)) will be used by CMS to identify eligible clinicians for 
whom we would make a QP determination based on services furnished 
through the Advanced APM track of the CJR model.
    Stakeholders have expressed a desire for model changes that would 
also include in the clinician financial arrangement list physicians, 
non-physician practitioners, and therapists without a financial 
arrangement under the CJR model, but who are affiliated with and 
support the Advanced APM Entity in its participation in the Advanced 
APM for purposes of the Quality Payment Program.
    We agree with stakeholders that these physicians, non-physician 
practitioners, and therapists should have their contributions to the 
Advanced APM Entity's participation in the Advanced APM recognized 
under the Quality Payment Program; however, since these

[[Page 39325]]

individuals do not have financial arrangements with the participant 
hospital, to also include them on the clinician financial arrangement 
list would be misleading, and could create confusion when CJR model 
participant hospitals submit lists to CMS.
2. Proposed Clinician Engagement List Requirements
    To increase opportunities for eligible clinicians supporting CJR 
model participant hospitals by performing CJR model activities and who 
are affiliated with participant hospitals to be considered QPs, we are 
proposing that each physician, nonphysician practitioner, or therapist 
who is not a CJR collaborator during the period of the CJR model 
performance year specified by CMS, but who does have a contractual 
relationship with the participant hospital based at least in part on 
supporting the participant hospital's quality or cost goals under the 
CJR model during the period of the performance year specified by CMS, 
would be added to a clinician engagement list.
    In addition to the clinician financial arrangement list that is 
considered an Affiliated Practitioner List for purposes of the Quality 
Payment Program, we propose the clinician engagement list would also be 
considered an Affiliated Practitioner List. The clinician engagement 
list and the clinician financial arrangement list would be considered 
together an Affiliated Practitioner List and would be used by CMS to 
identify eligible clinicians for whom we would make a QP determination 
based on services furnished through the Advanced APM track of the CJR 
model. As specified in Sec.  414.1425, as of our regulations, adopted 
in the Calendar Year (CY) 2017 Quality Payment Program final rule (81 
FR 77551) (hereinafter referred to as the 2017 QPP final rule), those 
physicians, nonphysician practitioners, or therapists who are included 
on the CJR model Affiliated Practitioner List as of March 31, June 30, 
or August 31 of a QP performance period would be assessed to determine 
their QP status for the year. As discussed in the 2017 QPP final rule 
(81 FR 77439 and 77440), for clinicians on an Affiliated Practitioner 
List, we determine whether clinicians meet the payment amount or 
patient count thresholds to be considered QPs (or Partial QPs) for a 
year by evaluating whether individual clinicians on an Affiliated 
Practitioner List have sufficient payments or patients flowing through 
the Advanced APM; we do not make any determination at the APM Entity 
level for Advanced APMs in which eligible clinicians are not identified 
on a Participation List, but are identified on an Affiliated 
Practitioner List. CMS makes the QP determination based on Part B 
claims data, so clinicians need not track or report payment amount or 
patient count information to CMS.
    This proposal would broaden the scope of eligible clinicians that 
are considered Affiliated Practitioners under the CJR model to include 
those without a financial arrangement under the CJR model but who are 
either directly employed by or contractually engaged with a participant 
hospital to perform clinical work for the participant hospital when 
that clinical work, at least in part, supports the cost and quality 
goals of the CJR model. We propose that the cost and quality goals of 
the additional affiliated practitioners who are identified on a 
clinician engagement list because they are contracted with a 
participant hospital must include activities related to CJR model 
activities, that is, activities related to promoting accountability for 
the quality, cost, and overall care for beneficiaries during LEJR 
episodes included in the CJR model, including managing and coordinating 
care; encouraging investment in infrastructure, enabling technologies, 
and redesigned care processes for high quality and efficient service 
delivery; the provision of items and services during a CJR episode in a 
manner that reduces costs and improves quality; or carrying out any 
other obligation or duty under the CJR model.
    Like the requirements of the clinician financial arrangement lists 
specified at Sec.  510.120(b), for CMS to make QP determinations for 
eligible clinicians based on services furnished through the CJR 
Advanced APM track, we would require that accurate information about 
each physician, nonphysician practitioner, or therapist who is not a 
CJR collaborator during the period of the CJR model performance year 
specified by CMS, but who is included on a clinician engagement list, 
be provided to CMS in a form and manner specified by CMS on a no more 
than quarterly basis. Thus, we propose that each participant hospital 
in the Advanced APM track of the CJR model submit to CMS a clinician 
engagement list in a form and manner specified by CMS on a no more than 
quarterly basis. We propose this list must include the following 
information on eligible clinicians for the period of the CJR model 
performance year specified by CMS:
    <bullet> For each physician, nonphysician practitioner, or 
therapist who is not a CJR collaborator during the period of the CJR 
model performance year specified by CMS but who does have a contractual 
relationship with a participant hospital based at least in part on 
supporting the participant hospital's quality or cost goals under the 
CJR model during the period of the CJR model performance year specified 
by CMS:
    ++ The name, TIN, and NPI of the individual.
    ++ The start date and, if applicable, the end date for the 
contractual relationship between the individual and participant 
hospital.
    Further, we propose that if there are no individuals that meet the 
requirements to be reported, as specified in any of Sec.  510.120 
(b)(1) through (3) of the EPM final rule or Sec.  510.120(c) as 
proposed here, the participant hospital must attest in a form and 
manner required by CMS that there are no individuals to report.
    Given that this proposal would require submission of a clinician 
engagement list, or an attestation that there are no eligible 
clinicians to be included on such a list, to reduce burden on 
participant hospitals, we would collect information for the clinician 
engagement list and clinician financial arrangement list at the same 
time.
    We seek comments on the proposal for submission of this 
information. We are especially interested in comments about approaches 
to information submission, including the periodicity and method of 
submission to CMS that would minimize the reporting burden on 
participant hospitals while providing CMS with sufficient information 
about eligible clinicians to facilitate QP determinations.
    For each participant hospital in the CJR Advanced APM track, we 
propose that the participant hospital must maintain copies of its 
clinician engagement lists and supporting documentation (that is, 
copies of employment letters or contracts) of its clinical engagement 
lists submitted to CMS. Because we would use these lists to develop 
Affiliated Practitioner Lists used for purposes of making QP 
determinations, these documents would be necessary to assess the 
completeness and accuracy of materials submitted by a participant 
hospital and to facilitate monitoring and audits. For the same reason, 
we further propose that the participant hospital must retain and 
provide access to the required documentation in accordance with Sec.  
510.110.

[[Page 39326]]

G. Clarification of Use of Amended Composite Quality Score Methodology 
During CJR Model Performance Year 1 Subsequent Reconciliation

    We conducted the initial reconciliation for performance year 1 of 
the CJR model in early 2017, and expect to make reconciliation payments 
to CJR participant hospitals by the end of September 2017 to 
accommodate the performance year 1 appeals process timelines. We will 
conduct the subsequent reconciliation calculation for performance year 
1 of the CJR model beginning in the first quarter of 2018, which may 
result in additional amounts to be paid to participant hospitals or a 
reduction to the amount that was paid for performance year 1. However, 
the results of the performance year 1 subsequent reconciliation 
calculations will be combined with the performance year 2 initial 
reconciliation results before reconciliation payment or repayment 
amounts are processed for payment or collection. Changes to the CJR 
model established in the EPM final rule impact this process.
    The improvements to the CJR model quality measures and composite 
quality score methodology, which were finalized in the EPM final rule 
(82 FR 524 through 526), were intended to be effective before the CJR 
model's performance year 1 initial reconciliation. However, as noted in 
section II. of this proposed rule, the effective date for certain EPM 
final rule provisions, including those amending Sec. Sec.  510.305 and 
510.315 to improve the quality measures and composite quality score 
methodology, were delayed until May 20, 2017. As a result, the CJR 
reconciliation reports issued in April 2017 were created in accordance 
with the provisions of Sec. Sec.  510.305 and 510.315 in effect as of 
April 2017; that is, the provisions finalized in the CJR model final 
rule. In early 2018, we would perform the performance year 1 subsequent 
reconciliation calculation in accordance with the provisions Sec. Sec.  
510.305 and 510.315 in effect as of early 2018, that is, established in 
the EPM final rule. Applying the provisions established in the EPM 
final rule to the performance year 1 subsequent reconciliation 
calculation may result in significant differences between the 
reconciliation payments calculated during the performance year 1 
initial reconciliation and the performance year 1 subsequent 
reconciliation. We anticipate that these differences will be greater 
than those that would be expected as a result of using more complete 
claims and programmatic data that will be available for the subsequent 
reconciliation (due to the additional 12 months of time that will occur 
between the initial and subsequent reconciliation calculations), more 
accurate identification of model overlap and exclusion of episodes, as 
well as factoring in adjustments to account for shared savings 
payments, and post-episode spending, as specified in Sec.  510.305(i). 
Specifically, the methodology used to determine the quality-adjusted 
target price for the performance year 1 subsequent reconciliation 
calculation will differ from the methodology used to determine the 
quality-adjusted target price for the performance year 1 initial 
reconciliation calculation as follows: The quality-adjusted target 
price would be recalculated to apply the amended reductions to the 
effective discount factors (Sec.  510.315(f)), which would be 
determined after recalculating the composite quality scores, including 
applying more generous criteria for earning quality improvement points 
(that is, a 2 decile improvement rather than 3 decile improvement as 
specified in amended Sec.  510.315(d)). Using the recalculated quality-
adjusted target price, the net payment reconciliation amount (NPRA) 
would be recalculated and will include application of post-episode 
spending reductions (Sec.  510.305(j)), as necessary, after determining 
the limitations on loss or gain. Thus, calculating performance year 1 
reconciliation payments using these two different provisions may result 
in a range of upward or downward adjustments to participant hospitals' 
performance year 1 payment amounts. We note that a downward adjustment 
to the performance year 1 payment amounts would require payment 
recoupment, if offset against a performance year 2 initial 
reconciliation payment amount is not feasible, which may be burdensome 
for participant hospitals.
    In developing this proposed rule, we also considered whether there 
might be benefit in further delaying the amendments to Sec. Sec.  
510.305 and 510.315 such that the same calculations would be used for 
both the performance year 1 initial reconciliation and the subsequent 
performance year 1 reconciliation, and the use of the amended 
calculations would begin with the performance year 2 initial 
reconciliation. We believe such an approach would impact future CJR 
model implementation and evaluation activities. Because determining the 
performance year 2 composite quality score considers the hospital's 
quality score improvement from its performance year 1 score, using 
different methodologies across performance years would require a 
mechanism to account for differences in the quality score methodology, 
for example we would have to develop a reliable crosswalk approach. If 
we were to develop and use a crosswalk approach, participants and other 
stakeholders would need to be informed about the crosswalk methodology 
in order to validate data analyses across performance years and that 
usage of the crosswalk would be ongoing throughout the model's duration 
for consistency across performance years. This methodology could add 
substantial complexity to this time-limited model. We also considered 
that the composite quality score for some participant hospitals may be 
higher under the revised scoring methodology. Delaying use of the 
revised scoring methodology may disadvantage these participants if 
their composite quality score would be higher and result in a more 
favorable discount percentage or allow the hospital to qualify for a 
reconciliation payment. Therefore, we believe the best approach is to 
apply the quality specifications as established in the EPM final rule 
(that is, the amendments to Sec. Sec.  510.305 and 510.315 that became 
effective May 20, 2017) to performance year 1 subsequent reconciliation 
calculations to ensure that reconciliation calculations for subsequent 
performance years will be calculated using the same methodology and to 
improve consistency across performance years for quality improvement 
measurement. Thus, for the reasons noted previously, we are not 
proposing to change the amendments to Sec. Sec.  510.305 and 510.315 
that became effective May 20, 2017. We seek comment on whether using an 
alternative approach, such as the quality composite score methodology 
from the CJR model final rule for the performance year 1 subsequent 
reconciliation, would ensure better consistency for analyses across CJR 
performance years.

H. Clarifying and Technical Changes Regarding the Use of the CMS Price 
(Payment) Standardization Detailed Methodology

    Based on questions we received from participant hospitals during 
the performance year 1 reconciliation process, we are proposing to make 
two technical changes to the CJR model regulations to clarify the use 
of the CMS Price (Payment) Standardization Detailed Methodology, posted 
on the QualityNet Web site at http://www.qualitynet.org/dcs/
ContentServer?c=Page&pagename=Qnet

[[Page 39327]]

Public%2FPage%2FQnetTier4&cid=1228772057350, in the calculation of 
target prices and actual episode spending. This pricing standardization 
approach is the same as that used for the Hospital Value-Based 
Purchasing Program's (HVBP) Medicare spending per beneficiary metric. 
In section III.C.3.a. of the CJR model final rule (80 FR 73331 through 
73333), we finalized how we would operationalize the exclusion of the 
various special payment provisions in calculating CJR model episode 
expenditures, both historical episode spending and performance year 
episode spending, by relying upon the CMS Price (Payment) 
Standardization Detailed Methodology with modifications. However, we 
did not clearly articulate this finalized policy in the regulations at 
42 CFR part 510. Thus, we are proposing the following technical changes 
to bring the regulatory text into conformity with our intended policy 
and to reduce potential stakeholder uncertainty about how the price 
(payment) standardization methodology is used. We are proposing to 
insert ``standardized'' into the definition of actual episode payment 
in Sec.  510.2, and insert ``with certain modifications'' into Sec.  
510.300(b)(6) to account for the modifications we must make to the 
standardization methodology to ensure all pricing calculations are 
consistent with our finalized policies.

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 proposed rule need not be 
reviewed by the Office of Management and Budget. However, we have, 
summarized the anticipated cost burden associated with the information 
collection requirements in the Regulatory Impact Analysis section of 
this proposed rule.

V. Regulatory Impact Analysis

A. Introduction

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    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 ($100 million or more in any 1 year). 
This proposed rule proposes to cancel the EPMs and the CR incentive 
payment model in advance of their start date and proposes several 
revisions to the design of the CJR model; these proposals impact a 
subset of hospitals under the IPPS. Therefore, it would have a 
relatively small economic impact; as a result, this proposed rule does 
not reach the $100 million threshold and thus is neither an 
``economically significant'' rule under E.O. 12866, nor a ``major 
rule'' under the Congressional Review Act.

B. Statement of Need

    As discussed previously, review and reevaluation of policies and 
programs, as well as revised rulemaking, are within an agency's 
discretion, especially after a change in administration occurs. After 
review and reevaluation of the CJR model final rule, the EPM final rule 
and the public comments we received in response to the March 21, 2017 
IFC, in addition to other considerations, we have determined that it is 
necessary to propose to rescind the regulations at 42 CFR part 512 and 
to reduce the geographic scope of the CJR model for the following 
reasons. First, we believe that requiring hospitals to participate in 
additional episode models at this time is not in the best interest of 
the agency or affected providers. We are concerned that engaging in 
large mandatory episode payment model efforts at this time may impede 
our ability to pursue and engage providers, such as hospitals, in 
future voluntary efforts. Similarly, we also believe that reducing the 
number of providers required to participate in the CJR model would 
allow us to continue to evaluate the effects of such a model while 
limiting the geographic reach of our current mandatory models. Finally, 
we believe that canceling the EPMs and CR incentive payment model, as 
well as altering the scope of the CJR model, offers CMS maximum 
flexibility to design alternative episode-based models and make 
potential improvements to these models as suggested by stakeholders, 
while still allowing us to test and evaluate the impact of the CJR 
model on the quality of care and expenditures.
    This proposed rule is also necessary to propose improvements to the 
CJR model for performance years 3, 4, and 5. We are proposing a few 
technical refinements and clarifications for certain payment, 
reconciliation and quality provisions, and a change to the criteria for 
the Affiliated Practitioner List to broaden the CJR Advanced APM track 
to additional eligible clinicians. We believe these proposed 
refinements would address operational issues identified since the start 
of the CJR model.

C. Anticipated Effects

    In section III. of the preamble to this proposed rule, we discuss 
our proposals to amend the regulations governing the CJR model. We 
present the following estimated overall impact of these proposed 
changes to the CJR model. Table 6 summarizes the newly calculated 
estimated impact for the CJR model for the last 3 years of the model.
    The modeling methodology for provider performance and participation 
is consistent with the methodology used in modeling the CJR impacts in 
the EPM final rule (82 FR 596). However, we updated our analysis to 
include an opt-in option for hospitals in 33 of the 67 MSAs selected 
for participation in the CJR model (all but 4 of these MSAs are from 
the lower cost groups), while maintaining mandatory participation for 
the remaining 34 MSAs (all of which are from the higher cost groups), 
and allowing for the exclusion of low-volume and rural hospitals in 
these 34 MSAs from mandatory participation and allowing them to choose 
voluntary participation (opt-in). We would expect the number of 
mandatory participating hospitals from year 3 forward to decrease from 
approximately 700, which is approximately the number of current CJR 
participants, to approximately 393. We assumed that if a hospital would 
exceed its target pricing such that it would incur an obligation of 
repayment to CMS of 3 percent or more in a given year, that hospital 
would not elect voluntary participation in the model for the final 
three performance years. We assumed no low-volume providers would 
participate, noting that including them in impacts would not have any 
noticeable effects due to their low claims volume. For purposes of

[[Page 39328]]

identifying CJR rural hospitals for this impact, we used the 2017 IPPS 
Sec.  412.103 rural reclassification list. We found only one provider 
in the 34 mandatory MSAs with an active rural reclassification and this 
provider was also on the low-volume hospital list and was not included 
in the impacts. The likelihood of voluntary participation linearly 
increases based on an upper bound of 3 percent bonus, but the modeling 
assumes that 25 percent of hospitals in the voluntary MSAs would not 
consider participation so that the likelihood of participation for each 
hospital is capped at 75 percent; we expect 60 to 80 hospitals to elect 
voluntary participation in the model.
    We seek comment on our assumptions about the number of hospitals 
that would elect voluntary participation in the CJR model. Due to a 
lack of available data, we did not account for participant investment 
in the impact analysis model we used for this proposed rule. However, 
we would expect that those who choose to voluntarily participate would 
have made investments in the CJR model that enable them to perform well 
and that they would anticipate earning positive reconciliation 
payments. For those hospitals choosing not to voluntarily participate, 
we would expect that the cost of any investments they may have made 
based on their participation in performance years 1 and 2 of the CJR 
model would be outweighed by the reconciliation payment obligations 
they would expect to incur if they continued to participate. The 60 to 
80 participants we expect to continue participating in the model 
through the voluntary election process are not included in our previous 
estimate of 393 CJR participants in the mandatory MSAs. Thus, in total 
we expect approximately 450 to 470 participants in the CJR model for 
the final three performance years. The participation parameters were 
chosen to reflect both the anticipated risk aversion of providers, and 
an expectation that many participants do not remain in an optional 
model or demonstration when there is an expectation that the hospital 
would incur an obligation of repayment to CMS. These assumptions 
reflect the experience with other models and demonstrations. The value 
of 3 percent may be somewhat larger than the level of repayment at 
which providers would opt-in, but the value was chosen to allow for the 
uncertainty of expected claims. We note that the possibility of 
shifting episodes from CJR model participant hospitals to low-volume or 
other non-participating hospitals exists and that we did not include 
any assumptions of this potential behavior in our financial impact 
modeling. We seek comment on our model assumptions that shifting of 
episodes will not occur. The new calculations estimate that the CJR 
model would result in a net Medicare program savings of approximately 
$204 million over the 3 remaining performance years (2018 through 
2020). This represents a reduction in savings of approximately $90 
million from the estimated net financial impacts of the CJR model in 
the EPM final rule (82 FR 603).
    Our previous analyses of the CJR model did not explicitly model for 
utilization changes, such as improvements in the efficiency of service 
during episodes. However, these behavioral changes would have minimal 
effect on the Medicare financial impacts. If the actual costs for an 
episode are below the discounted bundled payment amount, then CMS 
distributes the difference between these two amounts to the participant 
hospital, up to a capped amount. Similarly, if actual costs for an 
episode are above the discounted bundled payment amount, then the 
participant hospital pays CMS the difference between these amounts, up 
to a capped amount. Due to the uncertainty of estimating the impacts of 
this model, actual results could be higher or lower than this estimate.

   Table 6--Comparison of Initial Estimate of the Impact on the Medicare Program of the CJR Model With Revised
                                                    Estimates
                         [Figures are in $ millions, negative values represent savings]
----------------------------------------------------------------------------------------------------------------
                      Year                             2018            2019            2020            Total
----------------------------------------------------------------------------------------------------------------
Initial CJR Estimate............................             -61            -109            -125            -294
Revised CJR Estimate............................             -38             -77             -88            -204
Change..........................................              22              32              36              90
----------------------------------------------------------------------------------------------------------------
Note: The initial estimate includes the changes to the CJR model finalized in the EPM final rule (82 FR 603).
  The 2016 and 2017 initial estimate is not impacted by the proposed changes to the CJR model in this proposed
  rule. The total column reflects 2018 through 2020. Totals do not necessarily equal the sums of rounded
  components.

    Our analysis presents the cost and transfer payment effects of this 
proposed rule to the best of our ability.

D. Effects on Beneficiaries

    We believe that the proposal to cancel the EPMs and CR incentive 
payment model would not affect beneficiaries' freedom of choice to 
obtain healthcare services from any individual or organization 
qualified to participate in the Medicare program, including providers 
that are making care improvements within their communities. Although 
these models seek to incentivize care redesign and collaboration 
throughout the inpatient and post-acute care spectrum, the models have 
not yet begun. As the current baseline assumes these models would 
become effective on January 1, 2018, and that these models would 
incentivize care improvements that would likely result in an increase 
in quality of care for beneficiaries, it is possible that the proposal 
to cancel these models could cause hospitals that potentially made 
improvements in care in anticipation of the start of these models to 
delay or cease these investments, which could result in a reversal of 
any recent quality improvements. However, we believe the concerns 
raised by stakeholders and the lack of time to consider design 
improvements for these models prior to the January 1, 2018 start date 
outweigh potential reversal of any recent improvements in care 
potentially made by some hospitals and warrant cancellation of these 
models at this time while we engage with stakeholders to identify 
future tests for bundled payments and incentivizing high value care.
    We believe that the proposed changes to the CJR model discussed in 
this proposed rule, specifically focusing the model on higher cost MSAs 
in which participation would continue to be mandatory and allowing low-
volume and rural hospitals and all participant hospitals in lower cost 
MSAs to choose voluntary participation, would maintain the potential 
benefits of the CJR model for beneficiaries in many areas while 
providing a substantial number of

[[Page 39329]]

hospitals with increased flexibility to better focus on priority needs 
of the beneficiaries they serve. Specifically, low-volume and rural 
hospitals as well as other hospitals in the 33 voluntary participation 
MSAs (which are relatively more efficient areas) could elect to 
participate in the CJR model if they believe that doing so best meets 
their organization's strategic priorities for serving the beneficiaries 
in their community. Alternatively, if these hospitals do not believe 
continued participation in the CJR model would benefit their 
organizational goals and local patient care priorities, they can elect 
not to opt-in for the remainder of the model. We believe that 
beneficiaries in the service areas of the hospitals that would be 
allowed to choose to participate in the CJR model under our proposal 
may have an ongoing benefit from the care redesign investments these 
hospitals have already made during the first 2 years of the CJR model. 
Overall, we believe the refinements to the CJR model proposed in this 
proposed rule do not materially alter the potential effects of the 
model on beneficiaries. However, we acknowledge the possibility that 
the improved quality of care that was likely to have occurred during 
performance years 1 and 2 of the CJR model may be curtailed for 
beneficiaries that receive care at hospitals that do not elect to 
continue participation in the CJR model.

E. Effects on Small Rural Hospitals

    The changes to the CJR model proposed in this proposed rule do not 
substantially alter our previous impacts of the impact on small, 
geographically rural hospitals specified in either the EPM final rule 
(82 FR 606) and the CJR model final rule (80 FR 73538) because we 
continue to believe that few geographically rural hospitals will be 
included in the CJR model. In addition, the proposal to allow all rural 
hospitals (as defined in Sec.  510.2) that are not otherwise excluded 
the opportunity to elect to opt-in to the CJR model instead of having a 
mandatory participation requirement may further reduce the likelihood 
that rural hospitals would be included in the model. We solicit public 
comment on our estimates and analysis of the impact of our proposals on 
small rural hospitals.

F. Effects on Small Entities

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. We estimate that most hospitals and most 
other providers and suppliers are small entities, either by virtue of 
their nonprofit status or by qualifying as small businesses under the 
Small Business Administration's size standards (revenues of less than 
$7.5 to $38.5 million in any 1 year; NAIC Sector--62 series). States 
and individuals are not included in the definition of a small entity. 
For details, see the Small Business Administration's Web site at http://www.sba.gov/content/smallbusiness-size-standards.
    For purposes of the RFA, we generally consider all hospitals and 
other providers and suppliers to be small entities. We believe that the 
provisions of this proposed rule relating to acute care hospitals would 
have some effects on a substantial number of other providers involved 
in these episodes of care including surgeons and other physicians, 
skilled nursing facilities, physical therapists, and other providers. 
Although we acknowledge that many of the affected entities are small 
entities, and the analysis discussed throughout this proposed rule 
discusses aspects of episode payment models that may or would affect 
them, we have no reason to assume that these effects would reach the 
threshold level of 3 percent of revenues used by HHS to identify what 
are likely to be ``significant'' impacts. We assume that all or almost 
all of these entities would continue to serve these patients, and to 
receive payments commensurate with their cost of care. Hospitals 
currently experience frequent changes to payment (for example, as both 
hospital affiliations and preferred provider networks change) that may 
impact revenue, and we have no reason to assume that this would change 
significantly under the changes proposed in this rule.
    Accordingly, we have determined that this proposed rule will not 
have a significant impact on a substantial number of small entities. We 
solicit public comments on our estimates and analysis of the impact of 
our proposals on those small entities.

G. Effects of Information Collection

    The changes proposed in this proposed rule would have a minimal 
additional burden of information collection for CJR model participant 
hospitals. The two areas which this proposed rule may increase 
participant burden include providing clinician engagement lists and 
submitting opt-in documentation (for eligible hospitals who choose to 
opt-in to the CJR model).
    Clinician engagement list submission for the CJR model would 
require that participants submit on a no more than quarterly basis a 
list of physicians, nonphysician practitioners, or therapists who are 
not a CJR model collaborator during the period of the CJR model 
performance year specified by CMS but who do have a contractual 
relationship with a CJR model participant hospital based at least in 
part on supporting the participant hospital's quality or cost goals 
under the CJR model during the period of the performance year specified 
by CMS.
    For hospitals eligible to opt-in to the CJR model that elect to 
participate in the model, CMS intends to provide a template that can be 
completed and submitted prior to the proposed January 31, 2018 
submission deadline. As stated previously, we estimate that the number 
of hospitals that will elect voluntary participation in CJR is 60 to 
80. As stated previously, this template would be designed to minimize 
burden on participants, particularly since all necessary information 
required to effectively opt-in will be included within the template. 
Using wage information from the Bureau of Labor Statistics for medical 
and health service managers (Code 11-9111), we assumed a rate of 
$105.16 per hour, including overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm) and estimated that the time to 
complete the opt-in template would be, on average, approximately 30 
minutes per hospital. Thus, total costs associated with completing opt-
in templates for all 60 to 80 hospitals projected to elect voluntary 
participation is expected to range between $3,150 (60 hospitals) and 
$4,200 (80 hospitals).
    We seek comment on our assumptions and information on any costs 
associated with this work.

H. Regulatory Review Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on the EPM proposed rule will be the number of reviewers of 
this proposed rule. We acknowledge that this assumption may understate 
or overstate the costs of reviewing this rule. It is possible that not 
all commenters reviewed the precedent rule in detail, and it is also 
possible that some reviewers chose not to comment on the proposed rule. 
For these reasons we thought that the number of past commenters on the 
EPM proposed rule

[[Page 39330]]

would be a fair estimate of the number of reviewers of this rule. We 
welcome any comments on the approach in estimating the number of 
entities that would review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
however for the purposes of our estimate we assume that each reviewer 
reads approximately 100 percent of the rule. We seek comments on this 
assumption.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $105.16 per hour, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average 
reading speed, we estimate that it would take approximately 1.6 hours 
for the staff to review this proposed rule. For each entity that 
reviews the rule, the estimated cost is $168.26 (1.6 hours x $105.16). 
Therefore, we estimate that the total cost of reviewing this regulation 
is $29,445 ($105.16 x 175 reviewers).

I. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2017, that 
is approximately $148 million. This proposed rule does not include any 
mandate that would result in spending by state, local or tribal 
governments, in the aggregate, or by the private sector in the amount 
of $148 million in any 1 year.

J. Federalism

    We do not believe that there is anything in this proposed rule that 
either explicitly or implicitly preempts any state law, and furthermore 
we do not believe that this proposed rule would have a substantial 
direct effect on state or local governments, preempt state law, or 
otherwise have a federalism implication.

K. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs (82 FR 9339), was issued on January 30, 2017. This 
proposed rule, if finalized as proposed, is not expected to be subject 
to the requirements of E.O. 13771 because it is estimated to result in 
no more than de minimis costs.

L. Alternatives Considered

    Throughout this proposed rule, we have identified our proposed 
policies and alternatives that we have considered, and provided 
information as to the effects of these alternatives and the rationale 
for each of the proposed policies. We considered but did not propose to 
allow voluntary participation in all of the 67 selected MSAs in the CJR 
model because the overall estimated CJR model impact would no longer 
show savings, and would likely result in costs. An entirely voluntary 
CJR model would likely result in costs due to the assumption that, in 
aggregate, hospitals that expect to receive a positive reconciliation 
payment from Medicare would elect to opt-in to the model while 
hospitals that expect to owe Medicare a reconciliation amount would not 
likely elect to participate in the model. We also considered but did 
not propose limiting participation to the proposed 34 mandatory 
participation MSAs and not allowing voluntary participation in any of 
the 67 selected MSAs. If participation was limited to the proposed 34 
mandatory participation MSAs and voluntary participation was not 
allowed in any MSA, the impact to the overall estimated model savings 
over the last three years of the model would be closer to $30 million 
than the $90 million estimate presented in section V. of this proposed 
rule, because our modeling does not include assumptions about 
behavioral changes that might lower fee-for-service spending. Since our 
impact model estimates that 60 to 80 hospitals would choose voluntary 
participation and that these potential voluntary participants would be 
expected to earn only positive reconciliation payments under the model, 
these positive payments to the voluntary participants would offset some 
of the savings garnered from mandatory participants. However, we are 
proposing to allow voluntary participation in the proposed 33 voluntary 
participation MSAs and for low-volume and rural hospitals to permit 
hospitals that have made investments in care redesign and commitments 
to improvement to continue to participate in the model for the 
remaining 3 years. We believe our proposal would benefit a greater 
number of beneficiaries because a greater number of hospitals would be 
included in the CJR model.
    Instead of proposing to cancel the EPMs and CR incentive payment 
model, we considered altering the design of these models to allow for 
voluntary participation but as this would potentially involve 
restructuring the model design, payment methodologies, financial 
arrangement provisions and/or quality measures, we did not believe that 
such alterations would offer providers enough time to prepare for such 
changes, given the planned January 1, 2018 start date. In addition, if 
at a later date we decide to offer these models, or similar models, on 
a voluntary basis, we would not expect to implement them through 
rulemaking, but rather would establish them consistent with the manner 
in which we have implemented other voluntary models.
    We solicit and welcome comments on our proposals, on the 
alternatives we have identified, and on other alternatives that we 
should consider, as well as on the costs, benefits, or other effects of 
these.

M. Accounting Statement and Table

    As required by OMB Circular A-4 under Executive Order 12866 
(available at http://www.whitehouse.gov/omb/circulars_a004_a-4) in 
Table 7, we have prepared an accounting statement showing the 
classification of transfers associated with the provisions in this 
proposed rule. The accounting statement is based on estimates provided 
in this regulatory impact analysis. As described in Table 6, we 
estimate the proposed changes to the CJR model would continue to result 
in savings to the federal government of approximately $204 million over 
the 3 remaining performance years of the model from 2018 to 2020, 
noting these changes do reduce the original CJR estimated savings by 
approximately $90 million. In Table 7, the overall annualized change in 
payments (for all provisions in this proposed rule relative to the CJR 
model as originally finalized) based on a 7-percent and 3-percent 
discount rate, results in net federal monetary transfer from the 
federal government to participant IPPS hospitals of $73.2 million and 
$82.4 million in 2017 dollars, respectively, over the period of 2018 to 
2020.

[[Page 39331]]



  Table 7--Accounting Statement Changes to Comprehensive Care for Joint Replacement Model for Performance Years
                                                  2018 to 2020
----------------------------------------------------------------------------------------------------------------
                                                                               Units
                                                 ---------------------------------------------------------------
            Category                 Estimates                     Discount rate
                                                    Year dollar         (%)               Period covered
----------------------------------------------------------------------------------------------------------------
Costs: *
    Upfront cost of regulation              0.03            2017               7  2018 upfront cost.
     ($million).                            0.03            2017               3  2018 upfront cost.
----------------------------------------------------------------------------------------------------------------
        From Whom to Whom                   Incurred by IPPS Hospitals as a result of this regulation.
----------------------------------------------------------------------------------------------------------------
Transfers:
    Annualized/Monetized                   27.90            2017               7  2018-2020.
     ($million/year).                      29.14            2017               3  2018-2020.
----------------------------------------------------------------------------------------------------------------
        From Whom To Whom                  From the Federal Government to Participating IPPS Hospitals.
----------------------------------------------------------------------------------------------------------------
* The cost includes the regulatory familiarization and completing opt-in templates for up to 80 hospitals to
  join the CJR model.

M. Conclusion

    This analysis, together with the remainder of this preamble, 
provides the Regulatory Impact Analysis of a rule. As a result of this 
proposed rule, we estimate that the financial impact of the changes to 
the CJR model proposed here would result in a reduction to previously 
estimated savings by $90 million over the 3 remaining performance years 
(2018 through 2020) although we note that the CJR model would still be 
estimated to save the Medicare program approximately $204 million over 
the remaining three performance years.
    In accordance with the provisions of Executive Order 12866, this 
rule was reviewed by the Office of Management and Budget.

VI. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

List of Subjects

42 CFR Part 510

    Administrative Practice and Procedure, Health facilities, Health 
professions, Medicare, and Reporting and recordkeeping requirements.

42 CFR Part 512

    Administrative Practice and Procedure, Health facilities, Health 
professions, Medicare, and Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, under the authority at 
section 1115A of the Social Security Act, the Centers for Medicare & 
Medicaid Services proposes to amend 42 CFR Chapter IV, as follows:

PART 510--COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL

0
1. The authority citation for part 510 continues to read as follows:

    Authority: Secs. 1102, 1115A, and 1871 of the Social Security 
Act (42 U.S.C. 1302, 1315(a), and 1395hh).

0
2. Section 510.2 is amended by--
0
a. Revising the definition of ``Actual episode payment'';
0
b. Adding, in alphabetical order, definitions of ``Low-volume 
hospital'' and ``mandatory MSA''.
0
c. Revising the definition of ``participant hospital''; and
0
d. Adding the definition of ``voluntary MSA''.
    The revisions and additions read as follows:


Sec.  510.2  Definitions.

* * * * *
    Actual episode payment means the sum of standardized Medicare 
claims payments for the items and services that are included in the 
episode in accordance with Sec.  510.200(b), excluding the items and 
services described in Sec.  510.200(d).
* * * * *
    Low-volume hospital means a hospital identified by CMS as having 
fewer than 20 LEJR episodes in total across the 3 historical years of 
data used to calculate the performance year 1 CJR episode target 
prices.
* * * * *
    Mandatory MSA means an MSA designated by CMS as a mandatory 
participation MSA in accordance with Sec.  510.105(a).
* * * * *
    Participant hospital means one of the following:
    (1) During performance years 1 and 2 of the CJR model and the 
period from January 1, 2018 to January 31, 2018 of performance year 3, 
a hospital (other than a hospital excepted under Sec.  510.100(b)) with 
a CCN primary address located in one of the geographic areas selected 
for participation in the CJR model in accordance with Sec.  510.105.
    (2) Beginning February 1, 2018, a hospital (other than a hospital 
excepted under Sec.  510.100(b)) that is one of the following:
    (i) A hospital with a CCN primary address located in a mandatory 
MSA as of February 1, 2018 that is not a rural hospital or a low-volume 
hospital on that date.
    (ii) A hospital that is a rural hospital or low-volume hospital 
with a CCN primary address located in a mandatory MSA that makes an 
election to participate in the CJR model in accordance with Sec.  
510.115.
    (iii) A hospital with a CCN primary address located in a voluntary 
MSA that makes an election to participate in the CJR model in 
accordance with Sec.  510.115.
* * * * *
    Voluntary MSA means an MSA designated by CMS as a voluntary 
participation MSA in accordance with Sec.  510.105(a).
0
 3. Section 510.105 is amended by revising paragraph (a) to read as 
follows:


Sec.  510.105   Geographic areas.

    (a) General. The geographic areas for inclusion in the CJR model 
are obtained based on a stratified random sampling of certain MSAs in 
the United States.
    (1) All counties within each of the selected MSAs are selected for 
inclusion in the CJR model.

[[Page 39332]]

    (2) Beginning with performance year 3, the selected MSAs are 
designated as either mandatory participation MSAs or voluntary 
participation MSAs.
* * * * *
0
 4. Section 510.115 is added to read as follows:


Sec.  510.115   Voluntary participation election.

    (a) General. To continue participation in performance year 3 and 
participate in performance year 4 and performance year 5, the following 
hospitals must submit a written participation election letter as 
described in paragraph (c) of this section during the voluntary 
participation election period specified in paragraph (b) of this 
section:
    (1) Hospitals (other than those excluded under Sec.  510.100(b)) 
with a CCN primary address in a voluntary MSA.
    (2) Low-volume hospitals with a CCN primary address in a mandatory 
MSA.
    (3) Rural hospitals with a CCN primary address in a mandatory MSA.
    (b) Voluntary participation election period. The voluntary 
participation election period begins on January 1, 2018 and ends on 
January 31, 2018.
    (c) Voluntary participation election letter. The voluntary 
participation election letter serves as the model participation 
agreement. CMS accepts the voluntary participation election letter if 
the letter meets all of the following criteria:
    (1) Includes the following:
    (i) Hospital name.
    (ii) Hospital address.
    (iii) Hospital CCN.
    (iv) Hospital contact name, telephone number, and email address.
    (v) Model name (that is, CJR model).
    (vi) Attestation of CEHRT use as specified in Sec.  510.120(a)(1) 
(if the hospital is choosing to participate in the Advanced APM track).
    (2) Includes a certification that the hospital will--
    (i) Comply with all applicable requirements of this part and all 
other laws and regulations applicable to its participation in the CJR 
model; and
    (ii) Submit data or information to CMS that is accurate, complete 
and truthful, including, but not limited to, the participation election 
letter and any quality data or other information that CMS uses in its 
reconciliation processes.
    (3) Is signed by the hospital administrator, CFO or CEO.
    (4) Is submitted in the form and manner specified by CMS.
0
5. Section 510.120, as added January 3, 2017 (82 FR 180), delayed until 
October 1, 2017, on March 21, 2017 (82 FR 14464), further delayed until 
January 1, 2018, on May 19, 2017 (82 FR 22895), is amended by removing 
paragraph (b)(4), revising paragraph (c), and adding paragraphs (d) and 
(e).
    The revision and additions read as follows:


Sec.  510.120   CJR participant hospital CEHRT track requirements.

* * * * *
    (c) Clinician engagement list. Each participant hospital that 
chooses CEHRT use as provided in paragraph (a)(1) of this section must 
submit to CMS a clinician engagement list in a form and manner 
specified by CMS on a no more than quarterly basis. This list must 
include the following information on individuals for the period of the 
performance year specified by CMS:
    (1) For each physician, nonphysician practitioner, or therapist who 
is not a CJR collaborator during the period of the CJR model 
performance year specified by CMS but who does have a contractual 
relationship with the participant hospital based at least in part on 
supporting the participant hospital's quality or cost goals under the 
CJR model during the period of the performance year specified by CMS:
    (i) The name, TIN, and NPI of the individual.
    (ii) The start date and, if applicable, the end date for the 
contractual relationship between the individual and participant 
hospital.
    (2) [Reserved]
    (d) Attestation to no individuals. If there are no individuals that 
meet the requirements to be reported, as specified in paragraphs (b)(1) 
through (3) or paragraph (c) of this section, the participant hospital 
must attest in a form and manner required by CMS that there are no 
individuals to report.
    (e) Documentation requirements. (1) Each participant hospital that 
chooses CEHRT use as provided in paragraph (a)(1) of this section must 
maintain documentation of their attestation to CEHRT use, clinician 
financial arrangements lists, and clinician engagement lists.
    (2) The participant hospital must retain and provide access to the 
required documentation in accordance with Sec.  510.110.
0
6. Section 510.210 is amended by revising paragraph (b) to read as 
follows:


Sec.  510.210   Determination of the episode.

* * * * *
    (b) Cancellation of an episode. The episode is canceled and is not 
included in the determination of NPRA as specified in Sec.  510.305 if 
any of the following occur:
    (1) The beneficiary does any of the following during the episode:
    (i) Ceases to meet any criterion listed in Sec.  510.205.
    (ii) Is readmitted to any participant hospital for another anchor 
hospitalization.
    (iii) Initiates an LEJR episode under BPCI.
    (iv) Dies.
    (2) For performance year 3, the participant hospital did not submit 
a participation election letter that was accepted by CMS to continue 
participation in the model.
0
7. Section 510.300 is amended by revising paragraph (b)(6) to read as 
follows:


Sec.  510.300  Determination of quality-adjusted episode target prices.

* * * * *
    (b) * * *
    (6) Exclusion of incentive programs and add-on payments under 
existing Medicare payment systems. Certain incentive programs and add-
on payments are excluded from historical episode payments by using, 
with certain modifications, the CMS Price (Payment) Standardization 
Detailed Methodology used for the Medicare spending per beneficiary 
measure in the Hospital Value-Based Purchasing Program.
* * * * *
0
8. Section 510.305 is amended by revising paragraph (d)(1) to read as 
follows:


Sec.  510.305   Determination of the NPRA and reconciliation process.

* * * * *
    (d) * * *
    (1) Beginning 2 months after the end of each performance year, CMS 
does all of the following:
    (i) Performs a reconciliation calculation to establish an NPRA for 
each participant hospital.
    (ii) For participant hospitals that experience a reorganization 
event in which one or more hospitals reorganize under the CCN of a 
participant hospital performs--
    (A) Separate reconciliation calculations (during both initial and 
subsequent reconciliations for a performance year) for each predecessor 
participant hospital for episodes where anchor hospitalization 
admission occurred before the effective date of the reorganization 
event; and
    (B) Reconciliation calculations (during both initial and subsequent 
reconciliations for a performance year) for each new or surviving 
participant hospital for episodes where the anchor hospitalization 
admission occurred on or after the effective date of the reorganization 
event.
* * * * *

[[Page 39333]]

0
9. Section 510.410 is amended by adding paragraph (b)(1)(i)(G) to read 
as follows:


Sec.  510.410  Compliance enforcement.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (G) Failing to participate in CJR model-related evaluation 
activities conducted by CMS or its contractors or both.
* * * * *
0
10. Section 510.605 is amended by revising paragraph (c)(2) to read as 
follows:


Sec.  510.65  Waiver of certain telehealth requirements.

* * * * *
    (c) * * *
    (2) CMS waives the payment requirements under section 1834(m)(2)(B) 
of the Act to allow the distant site payment for telehealth home visit 
HCPCS codes unique to this model.
* * * * *

PART 512--[REMOVED AND RESERVED]

0
11. Part 512, as added January 3, 2017 (82 FR 180), delayed until 
October 1, 2017, on March 21, 2017 (82 FR 14464), further delayed until 
January 1, 2018, on May 19, 2017 (82 FR 22895), is removed and 
reserved.

    Dated: August 10, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: August 11, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-17446 Filed 8-15-17; 4:15 pm]
BILLING CODE 4120-01-P


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