How analytics helped Morristown Medical Center earn the 2nd highest CJR reconciliation payment in the U.S.

Inpatient joint replacement procedures can place a significant financial strain on health systems, so much so that Center for Medicare and Medicaid Services is in the process of piloting a mandatory payment program to cut costs.

In an April 19 webinar hosted by Becker's Hospital Review and sponsored by Change Healthcare, Steven Maser, MD, medical director of the orthopedic service line at Morristown, N.J.-based Atlantic Health System, discussed how four of Atlantic Health's six New Jersey hospitals implemented a comprehensive standardization and risk stratification system in response to CMS' mandated Comprehensive Care for Joint Replacement model. Dr. Maser detailed how this value-based care model benefited Atlantic Health at both the quality and financial levels.

The problem
Inpatient total knee and hip replacement are the most common surgeries for Medicare beneficiaries and often require lengthy recovery and rehabilitation periods, which can be costly for hospitals. In 2014, U.S. hospitals performed 400,000-plus procedures, resulting in more than $7 billion in hospitalization costs alone.

With this large volume of procedures, quality and cost can vary significantly between facilities. Where one hospital can have a low infection and implant failure rates, another could have rates three times higher and subsequently experience more readmissions. The average Medicare expenditure for surgery, hospitalization, and recovery varies from $16,500 to $33,000, according to CMS.

In April 2016, CMS initiated its mandatory Comprehensive Care for Joint Replacement model in 67 metropolitan areas. The payment model runs through 2020 and is designed to shift accountability to the hospital for the cost and quality of a joint replacement care episode. Under the model, CMS develops a composite quality score based upon complication rates related to the care episode, hospital-wide patient satisfaction survey scores and patient-reported outcomes. Facilities not meeting established quality benchmarks face penalties.

"All of the risk is on the hospital," Dr. Maser said. "All of the physicians get their regular fee-for-service through Medicare. The physical therapists get their fee-for-service, and the rehab facility gets their usual fee-for-service. All of the risk is on the hospital itself."

Atlantic Health's Morristown (N.J.) Medical Center, Overlook Medical Center in Summit, N.J., Chilton Medical Center in Pequannock, N.J. and Newton (N.J.) Medical Center were all located in service areas selected by CMS to participate in the pilot. Those facilities represented a combined 1,735 CJR annual cases performed by 84 CJR physicians.

"This program forces us to work throughout the hospital, and I'm really thrilled we were in the mandatory bundle because it gave us the kickstart we needed, and I don't know if we would've done it otherwise," Dr. Maser said.

The solution
In response to having four of its hospitals tapped for the CJR model, Atlantic Health did four things: established a steering committee, analyzed baseline quality data, modeled year-one goals and determined year-one initiatives.

The steering committee met every few weeks to determine strategies to maintain the high quality of care already present and to create further buy-in among its 84 CJR physicians — of which Atlantic Health employed only two. To increase buy-in, Atlantic Health turned to profit sharing, offering to share a portion of the reconciliation for meeting year-one goals with each physician based on performance. If the hospital succeeded, the physicians would benefit.

To increase its quality and financial performance, Atlantic created two goals: Increase the rate of direct home discharges and decrease the length of stay at post-acute care facilities. The system, to achieve these goals, created a series of initiatives based on standardizing order sets, care guidelines, and patient education. It also implemented a boosted care navigation and patient risk assessment.

After reviewing the performance data, Dr. Maser said the system needed actionable analytics. To create those, Atlantic Health partnered with Change Healthcare to implement Analytics Explorer, allowing data visualization from multiple systems, including CMS. Using this information Atlantic Health has created performance scorecards enabling the CJR surgeons to see how they compare to their peers and highlighting opportunities for improvement. Additionally, Atlantic Health’s new navigation and risk programs utilize Analytics Explorer visualizations to help physicians supervise their patient's overall care, improve outcomes and eliminate any unnecessary burden on the system's post-acute care resources.

The results
The results were telling. Three of Atlantic Health's four participating hospitals earned reconciliation payments from CMS, with Morristown Medical Center earning the second highest reconciliation payment of all 794 CJR hospitals nationwide. As for the fourth, Overlook Medical Center is progressing on its quality programs and has already realized cost savings.

Dr. Maser attributed the success to leadership and analytics.

"This is truly a team sport," Dr. Maser said. "You can't do this without senior leadership being fully on board, without finance being fully on board and without the analytics that give us that information to allow us to partner, with what's really most important here, our surgeons who drive patients to our facilities and allow us to take care of them."

To learn more about Change Healthcare, click here, to view the full webinar, click here or to view the webinar's slides, click here.

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