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www.ohca.com
Spring/Summer 2016
The Oregon Caregiver
21
LEGAL & REGULATORY
In performance year one of the CJR
model, hospitals will not be at-risk
of reduced pricing for LEJR episodes
and will be eligible for reconciliation
payments. The phased-in repayment
responsibility will start in performance
year two, when hospitals begin
accountability for any excess spending
within the episode. CMS believes
downside risk, or the financial risk,
will incentivize better coordination of
care among entities producing higher
quality of care but will allow a full
performance year to help providers
prepare for the risk-based phase of the
model. Hospitals will then be able to
gain or lose financially based upon their
actual episode payments relative to pre-
determined target prices. All hospitals
will be able to earn up to five percent
of their target price in performance
years one and two (though will not have
downside risk in year one), ten percent in
performance year three, and 20 percent
in performance years four and five.
CJR hospitals will create agreements
and form partnerships with physicians,
home health, skilled nursing facilities
(SNFs), and other PAC providers. The
rule addresses alignment payments,
collaborator agreements, distribution
arrangements, distribution payments,
gainsharing payments, and sharing
agreements as methods for aligning
incentives between providers. On
November 16, 2016, CMS and OIG
released a joint notice regarding the
waiver of certain fraud and abuse laws
(including the Federal anti-kickback
statute) for the purpose of testing these
types of agreements.
The new CJR model has the potential to
drastically change the PAC landscape,
in how PACs treat patients, as well
as enhance their relationships with
hospitals. CJR could have an effect of
creating winners and losers among PAC
providers, if PACs do not proactively
strategize and adjust course in how they
manage care for this program. PACs will
likely seek opportunity to work more
closely with CJR hospitals to develop
appropriate networks, care pathways, and
delivery patterns and will be expected
to draw distinction between those
patients who belong to the CJR program
and those who receive care under FFS,
managing their care jointly on the
former.
Joseph M. Greenman, J.D., is a shareholder at Lane Powell PC
in Portland.