CJR Quickly Steered Patients Toward Home Health, Reduced Medicare Spending

To achieve cost savings, hospitals participating in the Comprehensive Care for Joint Replacement (CJR) program started discharging more patients to home health agencies instead of institutional post-acute care settings in the first year of the bundled payment model, a new report confirms.

CJR encourages hospitals, physicians and post-acute care providers to work together in order to strengthen quality and coordination of care from the time of hospitalization through the ongoing recovery process. The CJR model holds participating hospitals financially accountable for the cost and quality of an episode of care, with CMS assessing whether the hospitals met quality and financial targets at the end of each model performance year.

In general, bundled payment participants reap savings if they can provide care under a certain spending target while maintaining quality.


Implemented in April 2016, the CJR model, in particular, is a key part of the CMS strategy to use alternative payment models to slow Medicare spending growth by prioritizing value over volume. Findings about the role home health agencies play in the model were highlighted in the first annual report on the initiative prepared by the Lewin Group.

Among its highlights, the Lewin Group report found that 2016 reductions in total episode payments were driven by reductions in the use of more intensive post-acute care settings. For CJR patients with elective episodes, for example, there was a relative decrease in the proportion with inpatient rehabilitation facilities as their first post-acute care setting and a relative increase in the proportion with home health agencies as their first post-acute care setting.

For lower extremity joint replacement episodes, average total payments fell by $910 for CJR episodes compared to control group episodes. Payment reductions persisted throughout different kinds of episodes as well.


Home health saw an estimated relative increase in standardized allowed amounts of $86 for all lower extremity joint replacement patient episodes, according to the report. Home health saw estimated relative increase in standardized allowed amount of $85 and $43 for elective and fracture episode types, respectively.

Stakeholders interviewed as part of the report cited taking actions with the goals of discharging patients to home health instead of institutional post-acute care settings and reducing post-acute care length of stay. This aligns with expectations; after CJR was unveiled, home health providers began preparing to work more closely with hospitals to care for orthopedic patients in the hopes of winning a greater share of referrals.

The early evaluation results drew from the initial stages of CJR model’s implementation, using episodes initiated in the first performance year, when all CJR hospitals in the 67 metropolitan statistical areas participated.

That timeframe includes episodes initiated on or after April 1, 2016 through Dec. 31 of that same year.

Results from the early stages of the CJR bundled payment model come shortly after a CMS announcement highlighting that the Next Generation Accountable Care Organization Model saved $62 million by cutting spending in skilled nursing facilities.

The report also echoes findings published in Health Affairs last month indicating that hospitals participating in lower joint replacement episodes in either CJR or the Bundled Payments for Care Improvement (BPCI) program were steering patients home as a dominant strategy.

Once mandatory in the first 67 geographic areas, CMS rolled back compulsory participation in the CJR program to 34 areas last fall.

Written by Maggie Flynn and Robert Holly