39310 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules 

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. 

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 onetime 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: CJR@cms.hhs.gov. 

For questions related to the EPMs: 

EPMRULE@cms.hhs.gov. 

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 DiagnosisRelated 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 

§ 510.2; adding § 510.110; amending 

§ 510.120; amending § 510.405; 

amending § 510.410; revising § 510.500; 

revising § 510.505; adding § 510.506; 

and amending § 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 inand 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/aceevaluationreport-final-5-2-14.pdf and 

BPCI evaluation at: https://

innovation.cms.gov/Files/reports/BPCIEvalRpt1.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 

§ 510.105 as discussed in the CJR model 

final rule (80 FR 73297 through 73299). 

In § 510.2, an MSA is defined as a corebased 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 


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MSAs with the highest average wageadjusted 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 wageadjusted 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 wageadjusted 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 § 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 

§ 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 lowvolume or rural (as defined in § 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 

§ 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 § 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 § 510.115 in order for the lowvolume hospital to continues its 

participation in the CJR model. We are 

proposing to define a low-volume 

hospital in § 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 lowvolume 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 


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

§ 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

MSA MSA name 

Wage-adjusted 

episode 

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-Anaheim, CA ................................................................................................................. 28,219 

31180 ............. Lubbock, TX ............................................................................................................................................................ 29,524 

32820 ............. Memphis, TN-MS-AR .............................................................................................................................................. 28,916 

33100 ............. Miami-Fort Lauderdale-West Palm Beach, FL ........................................................................................................ 33,072 

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, NY-NJ-PA ............................................................................................................. 31,076 

36420 ............. Oklahoma City, OK ................................................................................................................................................. 27,267 

36740 ............. Orlando-Kissimmee-Sanford, FL ............................................................................................................................. 29,259 

37860 ............. Pensacola-Ferry Pass-Brent, FL ............................................................................................................................. 29,485 

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-Clearwater, FL .................................................................................................................... 32,424 

45780 ............. Toledo, OH .............................................................................................................................................................. 28,658 

46220 ............. Tuscaloosa, AL ........................................................................................................................................................ 31,789 

46340 ............. Tyler, TX .................................................................................................................................................................. 30,955 

TABLE 2—CJR VOLUNTARY PARTICIPATION MSAS

MSA MSA name 

Wage-adjusted 

episode 

payments 

(in $) 

10740 ............. Albuquerque, NM .................................................................................................................................................... $25,892 

12020 ............. Athens-Clarke County, GA ...................................................................................................................................... 25,394 


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TABLE 2—CJR VOLUNTARY PARTICIPATION MSAS—Continued 

MSA MSA name 

Wage-adjusted 

episode 

payments 

(in $) 

13900 ............. Bismarck, ND .......................................................................................................................................................... 22,479 

14500 ............. Boulder, CO ............................................................................................................................................................. 24,115 

15380 ............. Buffalo-Cheektowaga-Niagara Falls, NY ................................................................................................................ 26,037 

16020 ............. Cape Girardeau, MO-IL ........................................................................................................................................... 24,564 

16180 ............. Carson City, NV ...................................................................................................................................................... 26,128 

16740 ............. Charlotte-Concord-Gastonia, NC-SC ...................................................................................................................... 26,736 

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-Anderson, IN .......................................................................................................................... 25,841 

28140 ............. Kansas City, MO-KS ............................................................................................................................................... 27,261 

30700 ............. Lincoln, NE .............................................................................................................................................................. 27,173 

31540 ............. Madison, WI ............................................................................................................................................................ 24,442 

33340 ............. Milwaukee-Waukesha-West Allis, WI ...................................................................................................................... 25,698 

33700 ............. Modesto, CA ............................................................................................................................................................ 24,819 

34940 ............. Naples-Immokalee-Marco Island, FL ...................................................................................................................... 27,120 

34980 ............. Nashville-Davidson-Murfreesboro-Franklin, TN ...................................................................................................... 26,880 

35980 ............. Norwich-New London, CT ....................................................................................................................................... 25,780 

36260 ............. Ogden-Clearfield, UT .............................................................................................................................................. 25,472 

38900 ............. Portland-Vancouver-Hillsboro, OR-WA ................................................................................................................... 22,604 

40980 ............. Saginaw, MI ............................................................................................................................................................. 25,488 

41180 ............. St. Louis, MO-IL ...................................................................................................................................................... 26,425 

41860 ............. San Francisco-Oakland-Hayward, CA .................................................................................................................... 23,716 

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 Hospital, Inc ......................................................... 33860 Montgomery, AL. 

010062 ........... Wiregrass Medical Center ...................................................... 20020 Dothan, AL. 

010095 ........... Hale County Hospital .............................................................. 46220 Tuscaloosa, AL. 

010097 ........... Elmore Community Hospital ................................................... 33860 Montgomery, AL. 

010108 ........... Prattville Baptist Hospital ........................................................ 33860 Montgomery, AL. 

010109 ........... Pickens County Medical Center ............................................. 46220 Tuscaloosa, AL. 

010149 ........... Baptist Medical Center East ................................................... 33860 Montgomery, AL. 

040132 ........... Leo N. Levi National Arthritis Hospital .................................... 26300 Hot Springs, AR. 

050040 ........... LAC-Olive View-UCLA Medical Center .................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

050091 ........... Community Hospital of Huntington Park ................................ 31080 Los Angeles-Long Beach-Anaheim, CA.

050137 ........... Kaiser Foundation Hospital-Panorama City ........................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050138 ........... Kaiser Foundation Hospital-Los Angeles ............................... 31080 Los Angeles-Long Beach-Anaheim, CA.

050139 ........... Kaiser Foundation Hospital-Downey ...................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050158 ........... Encino Hospital Medical Center ............................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

050205 ........... Glendora Community Hospital ................................................ 31080 Los Angeles-Long Beach-Anaheim, CA. 

050373 ........... LAC+USC Medical Center ...................................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050378 ........... Pacifica Hospital of the Valley ................................................ 31080 Los Angeles-Long Beach-Anaheim, CA. 

050411 ........... Kaiser Foundation Hospital-South Bay ................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050468 ........... Memorial Hospital of Gardena ................................................ 31080 Los Angeles-Long Beach-Anaheim, CA. 

050543 ........... College Hospital Costa Mesa ................................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

050548 ........... Fairview Developmental Center .............................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

050552 ........... Motion Picture & Television Hospital ...................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050561 ........... Kaiser Foundation Hospital-West Los Angeles ...................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050609 ........... Kaiser Foundation Hospital-Orange County-Anaheim ........... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050641 ........... East Los Angeles Doctors Hospital ........................................ 31080 Los Angeles-Long Beach-Anaheim, CA. 

050677 ........... Kaiser Foundation Hospital-Woodland Hills ........................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050723 ........... Kaiser Foundation Hospital-Baldwin Park .............................. 31080 Los Angeles-Long Beach-Anaheim, CA.

050738 ........... Greater El Monte Community Hospital ................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050744 ........... Anaheim Global Medical Center ............................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

050747 ........... South Coast Global Medical Center ....................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050751 ........... Miracle Mile Medical Center ................................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 


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TABLE 3—LOW-VOLUME HOSPITALS LOCATED IN THE MANDATORY MSAS ELIGIBLE TO OPT-IN DURING VOLUNTARY

ELECTION PERIOD—Continued 

CCN Hospital name MSA MSA Title 

050771 ........... Coast Plaza Hospital .............................................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

050776 ........... College Medical Center .......................................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050779 ........... Martin Luther King Jr. Community Hospital ............................ 31080 Los Angeles-Long Beach-Anaheim, CA.

050780 ........... Foothill Medical Center ........................................................... 31080 Los Angeles-Long Beach-Anaheim, CA. 

050782 ........... Casa Colina Hospital .............................................................. 31080 Los Angeles-Long Beach-Anaheim, CA. 

070038 ........... Connecticut Hospice Inc ......................................................... 35300 New Haven-Milford, CT. 

070039 ........... Masonic Home and Hospital ................................................... 35300 New Haven-Milford, CT. 

100048 ........... Jay Hospital ............................................................................ 37860 Pensacola-Ferry Pass-Brent, FL. 

100130 ........... Lakeside Medical Center ........................................................ 33100 Miami-Fort Lauderdale-West Palm Beach, FL. 

100240 ........... Anne Bates Leach Eye Hospital ............................................. 33100 Miami-Fort Lauderdale-West Palm Beach, FL. 

100277 ........... Douglas Gardens Hospital ...................................................... 33100 Miami-Fort Lauderdale-West Palm Beach, FL. 

100320 ........... Poinciana Medical Center ....................................................... 36740 Orlando-Kissimmee-Sanford, FL. 

100326 ........... Promise Hospital of Miami ...................................................... 33100 Miami-Fort Lauderdale-West Palm Beach, FL. 

190005 ........... University Medical Center New Orleans ................................. 35380 New Orleans-Metairie, LA. 

190011 ........... University Health Conway ....................................................... 33740 Monroe, LA. 

190079 ........... St. Charles Parish Hospital ..................................................... 35380 New Orleans-Metairie, LA. 

190245 ........... Monroe Surgical Hospital ........................................................ 33740 Monroe, LA. 

190300 ........... St. Charles Surgical Hospital LLC .......................................... 35380 New Orleans-Metairie, LA. 

190302 ........... Omega Hospital LLC .............................................................. 35380 New Orleans-Metairie, LA. 

190308 ........... St. Bernard Parish Hospital .................................................... 35380 New Orleans-Metairie, LA.

190313 ........... New Orleans East Hospital ..................................................... 35380 New Orleans-Metairie, LA. 

250012 ........... Alliance Healthcare System .................................................... 32820 Memphis, TN-MS-AR. 

250126 ........... North Oak Regional Medical Center ....................................... 32820 Memphis, TN-MS-AR. 

250167 ........... Methodist Olive Branch Hospital ............................................ 32820 Memphis, TN-MS-AR. 

310058 ........... Bergen Regional Medical Center ............................................ 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330080 ........... Lincoln Medical & Mental Health Center ................................ 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330086 ........... Montefiore Mount Vernon Hospital ......................................... 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330100 ........... New York Eye and Ear Infirmary ............................................ 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330199 ........... Metropolitan Hospital Center .................................................. 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330231 ........... Queens Hospital Center ......................................................... 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330233 ........... Brookdale Hospital Medical Center ........................................ 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330240 ........... Harlem Hospital Center .......................................................... 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330385 ........... North Central Bronx Hospital .................................................. 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330396 ........... Woodhull Medical and Mental Health Center ......................... 35620 New York-Newark-Jersey City, NY-NJ-PA.

330397 ........... Interfaith Medical Center ......................................................... 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330399 ........... St. Barnabas Hospital ............................................................. 35620 New York-Newark-Jersey City, NY-NJ-PA. 

330405 ........... Helen Hayes Hospital ............................................................. 35620 New York-Newark-Jersey City, NY-NJ-PA. 

360241 ........... Edwin Shaw Rehab Institute ................................................... 10420 Akron, OH. 

370011 ........... Mercy Hospital El Reno Inc. ................................................... 36420 Oklahoma City, OK. 

370158 ........... Purcell Municipal Hospital ....................................................... 36420 Oklahoma City, OK. 

370199 ........... Lakeside Women’s Hospital A Member of INTEGRIS Health 36420 Oklahoma City, OK. 

370206 ........... Oklahoma Spine Hospital ....................................................... 36420 Oklahoma City, OK. 

370215 ........... Oklahoma Heart Hospital ........................................................ 36420 Oklahoma City, OK. 

370234 ........... Oklahoma Heart Hospital South ............................................. 36420 Oklahoma City, OK. 

390184 ........... Highlands Hospital .................................................................. 38300 Pittsburgh, PA. 

390217 ........... Excela Health Frick Hospital ................................................... 38300 Pittsburgh, PA. 

420057 ........... McLeod Medical Center-Darlington ........................................ 22500 Florence, SC. 

420066 ........... Lake City Community Hospital ............................................... 22500 Florence, SC. 

440131 ........... Baptist Memorial Hospital Tipton ............................................ 32820 Memphis, TN-MS-AR. 

450143 ........... Seton Smithville Regional Hospital ......................................... 12420 Austin-Round Rock, TX. 

450605 ........... Care Regional Medical Center ............................................... 18580 Corpus Christi, TX. 

450690 ........... University of Texas Health Science Center at Tyler .............. 46340 Tyler, TX. 

450865 ........... Seton Southwest Hospital ....................................................... 12420 Austin-Round Rock, TX. 

460043 ........... Orem Community Hospital ...................................................... 39340 Provo-Orem, UT. 

670087 ........... Baylor Scott & White Emergency Medical Center-Cedar 

Park.

12420 Austin-Round Rock, TX. 

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 


sradovich on DSK3GMQ082PROD with PROPOSALS2
39318 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules 

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: 

• Hospital Name. 

• Hospital Address. 

• Hospital CCN. 

• Hospital contact name, telephone 

number, and email address. 

• If selecting the Advanced APM 

track, attestation of CEHRT use as 

defined in § 414.1305. 

Second, we are proposing that the 

participation election letter must 

include a certification in a form and 

manner specific by CMS that— 

• 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 

• 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 onetime 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 lowvolume hospital, mandatory MSA, and 

voluntary MSA, to change the definition 

of participant hospital in § 510.2, and to 

amend the specification of the 


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geographic areas in § 510.105(a) to 

reflect the establishment of mandatory 

and voluntary participation MSAs. We 

are proposing to codify the opt-in 

proposal in new § 510.115. In addition, 

we are proposing to post the list of 

mandatory participation MSAs, 

voluntary participation MSAs, and lowvolume 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 optout 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 

participate as of 

February 1, 2018 

May elect 

voluntary 

participation 

Participation 

election period 

Election 

effective 

date 

Mandatory Participation MSAs 

All IPPS participant hospitals, except rural and low-volume * ....... Yes ..................... No ....................... n/a n/a 

Rural hospitals * ............................................................................. No ....................... Yes ..................... 1/1/2018–1/31/2018 2/1/2018 

Low-volume hospitals (see Table 3) .............................................. No ....................... Yes ..................... 1/1/2018–1/31/2018 2/1/2018 

Voluntary Participation MSAs 

All IPPS participant hospitals ......................................................... No ....................... Yes ..................... 1/1/2018–1/31/2018 2/1/2018 

* 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. 


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2. Proposed Codification of CJR ModelRelated 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 modelrelated 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 

§ 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 nonphysician 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 (§ 510.500(c)(4)). 

Similarly, distribution arrangements are 

limited as specified in § 510.505(b)(8), 

and downstream distribution 

arrangements are limited as specified in 

§ 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, nonphysician 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 Hospitallevel 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-AssessmentInstruments/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-PatientAssessment-Instruments/Hospital

QualityInits/MeasureMethodology.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, 


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Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules 39321 

CMS updates the quality-adjusted 

episode target prices for the new or 

surviving participant hospital 

(§ 510.300(b)(4)). Following the end of a 

performance year, CMS performs annual 

reconciliation calculations in 

accordance with the provisions 

established in § 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 

(§ 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 qualityadjusted 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 

§ 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 Gcodes 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 

§ 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. 


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39322 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules 

TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF RESIDENCE

HCPCS 

Code No. Long descriptor Short descriptor 

Work and MP RVUs equal to 

those of the corresponding 

office/outpatient E/M visit 

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 management 

of a new patient for use only in the Medicare-approved 

Comprehensive Care for Joint Replacement model, 

which requires these 3 key components: 

• A problem focused history. 

• A problem focused examination. 

• Straightforward medical decision making, furnished 

in real time using interactive audio and video technology. 

Remote E/M new pt 10 mins ...... 99201 

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 management 

of a new patient for use only in the Medicare-approved 

Comprehensive Care for Joint Replacement model, 

which requires these 3 key components: 

• An expanded problem focused history. 

• An expanded problem focused examination. 

Remote E/M new pt 20 mins ...... 99202 

• 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 management 

of a new patient for use only in the Medicare-approved 

Comprehensive Care for Joint Replacement model, 

which requires these 3 key components: 

• A detailed history. 

• A detailed examination. 

Remote E/M new pt 30 mins ...... 99203 

• 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 management 

of a new patient for use only in the Medicare-approved 

Comprehensive Care for Joint Replacement model, 

which requires these 3 key components: 

• A comprehensive history. 

• A comprehensive examination. 

Remote E/M new pt 45 mins ...... 99204 


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Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules 39323 

TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF

RESIDENCE—Continued 

HCPCS 

Code No. Long descriptor Short descriptor 

Work and MP RVUs equal to 

those of the corresponding 

office/outpatient E/M visit 

CPT code for same calendar 

year under the PFS; PE 

RVUs equal to the facility 

values for each 

• 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 management 

of a new patient for use only in the Medicare-approved 

Comprehensive Care for Joint Replacement model, 

which requires these 3 key components: 

• A comprehensive history. 

• A comprehensive examination. 

Remote E/M new pt 60 mins ...... 99205 

• 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 management 

of an established patient for use only in the Medicareapproved Comprehensive Care for Joint Replacement 

model, which requires at least 2 of the following 3 key 

components: 

• A problem focused history. 

• A problem focused examination. 

Remote E/M est. pt 10 mins ....... 99212 

• 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 management 

of an established patient for use only in the Medicareapproved Comprehensive Care for Joint Replacement 

model, which requires at least 2 of the following 3 key 

components: 

• An expanded problem focused history. 

• An expanded problem focused examination. 

Remote E/M est. pt 15 mins ....... 99213 

• 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. 


sradovich on DSK3GMQ082PROD with PROPOSALS2
39324 Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Proposed Rules 

TABLE 5—HCPCS CODES FOR TELEHEALTH VISITS FOR CJR MODEL BENEFICIARIES IN HOME OR PLACE OF

RESIDENCE—Continued 

HCPCS 

Code No. Long descriptor Short descriptor 

Work and MP RVUs equal to 

those of the corresponding 

office/outpatient E/M visit 

CPT code for same calendar 

year under the PFS; PE 

RVUs equal to the facility 

values for each 

G9488 ............. Remote in-home visit for the evaluation and management 

of an established patient for use only in the Medicareapproved Comprehensive Care for Joint Replacement 

model, which requires at least 2 of the following 3 key 

components: 

• A detailed history. 

• A detailed examination. 

Remote E/M est. pt 25 mins ....... 99214 

• 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 management 

of an established patient for use only in the Medicareapproved Comprehensive Care for Joint Replacement 

model, which requires at least 2 of the following 3 key 

components: 

• A comprehensive history. 

• A comprehensive examination. 

Remote E/M est. pt 40 mins ....... 99215 

• 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 § 414.1305 and described under 

§ 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 § 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 

§§ 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 

(§ 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, nonphysician 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 


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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 

§ 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 

§ 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: 

• 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 § 510.120 (b)(1) through (3) of 

the EPM final rule or § 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 

§ 510.110. 


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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 

§§ 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 §§ 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 

§§ 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 postepisode spending, as specified in 

§ 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 (§ 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 § 510.315(d)). Using the 

recalculated quality-adjusted target 

price, the net payment reconciliation 

amount (NPRA) would be recalculated 

and will include application of postepisode spending reductions 

(§ 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 §§ 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 

§§ 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 

§§ 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/Content

Server?c=Page&pagename=Qnet


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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 

§ 510.2, and insert ‘‘with certain 

modifications’’ into § 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 optin 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 lowvolume 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 


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identifying CJR rural hospitals for this 

impact, we used the 2017 IPPS 

§ 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 


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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 § 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 


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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 × $105.16). Therefore, we estimate 

that the total cost of reviewing this 

regulation is $29,445 ($105.16 × 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. 


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TABLE 7—ACCOUNTING STATEMENT CHANGES TO COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL FOR

PERFORMANCE YEARS 2018 TO 2020 

Category Estimates 

Units 

Year dollar Discount rate 

(%) Period covered 

Costs: * 

Upfront cost of regulation ($million) ............................................. 0.03 

0.03 

2017 

2017 

7 

3 

2018 upfront cost. 

2018 upfront cost. 

From Whom to Whom Incurred by IPPS Hospitals as a result of this regulation. 

Transfers: 

Annualized/Monetized ($million/year) ........................................... 27.90 

29.14 

2017 

2017 

7 

3 

2018–2020. 

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 

■ 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). 

■ 2. Section 510.2 is amended by— 

■ a. Revising the definition of ‘‘Actual 

episode payment’’; 

■ b. Adding, in alphabetical order, 

definitions of ‘‘Low-volume hospital’’ 

and ‘‘mandatory MSA’’. 

■ c. Revising the definition of 

‘‘participant hospital’’; and 

■ d. Adding the definition of ‘‘voluntary 

MSA’’. 

The revisions and additions read as 

follows: 

§ 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 § 510.200(b), excluding 

the items and services described in 

§ 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 

§ 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 

§ 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 

§ 510.105. 

(2) Beginning February 1, 2018, a 

hospital (other than a hospital excepted 

under § 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 § 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 

§ 510.115. 

* * * * * 

Voluntary MSA means an MSA 

designated by CMS as a voluntary 

participation MSA in accordance with 

§ 510.105(a). 

■ 3. Section 510.105 is amended by 

revising paragraph (a) to read as follows: 

§ 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. 


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(2) Beginning with performance year 

3, the selected MSAs are designated as 

either mandatory participation MSAs or 

voluntary participation MSAs. 

* * * * * 

■ 4. Section 510.115 is added to read as 

follows: 

§ 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 § 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 § 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. 

■ 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: 

§ 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 § 510.110. 

■ 6. Section 510.210 is amended by 

revising paragraph (b) to read as follows: 

§ 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 § 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 § 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. 

■ 7. Section 510.300 is amended by 

revising paragraph (b)(6) to read as 

follows: 

§ 510.300 Determination of qualityadjusted 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. 

* * * * * 

■ 8. Section 510.305 is amended by 

revising paragraph (d)(1) to read as 

follows: 

§ 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. 

* * * * * 


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■ 9. Section 510.410 is amended by 

adding paragraph (b)(1)(i)(G) to read as 

follows: 

§ 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. 

* * * * * 

■ 10. Section 510.605 is amended by 

revising paragraph (c)(2) to read as 

follows: 

§ 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] 

■ 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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