42 CFR Part 510 — Comprehensive Care for Joint Replacement Model

PART 510—COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL Authority: 42 U.S.C. 1302, 1315a, and 1395hh. Source: 80 FR 73540, Nov. 24, 2015, unless otherwise noted. Subpart A—General Provisions § 510.1 Basis and scope. (a) Basis. (b) Scope. (1) The participants in the Comprehensive Care for Joint Replacement model. (2) The episodes being tested in the model. (3) The methodology for pricing and payment under the model. (4) Quality performance standards and quality reporting requirements. (5) Safeguards to ensure preservation of beneficiary choice and beneficiary notification. § 510.2 Definitions. For the purposes of this part, the following definitions are applicable unless otherwise stated: ACO ACO participant ACO provider/supplier Actual episode payment Age bracket risk adjustment factor Alignment payment Anchor hospitalization Anchor procedure Applicable discount factor Area BPCI BPCI Advanced CCN CEC CEHRT CJR beneficiary CJR collaborator (1) SNF. (2) HHA. (3) LTCH. (4) IRF. (5) Physician. (6) Nonphysician practitioner. (7) Therapist in private practice. (8) CORF. (9) Provider of outpatient therapy services. (10) Physician Group Practice (PGP). (11) Hospital. (12) CAH. (13) Non-Physician Provider Group Practice (NPPGP). (14) Therapy Group Practice (TGP). CJR-HCC condition count risk adjustment factor CJR reconciliation report Collaboration agent (1) A member of a PGP, NPPGP, or TGP that has entered into a distribution arrangement with the same PGP, NPPGP, or TGP in which he or she is an owner or employee, and where the PGP, NPPGP, or TGP is a CJR collaborator. (2) An ACO participant or ACO provider/supplier that has entered into a distribution arrangement with the same ACO in which it is participating, and where the ACO is a CJR collaborator. Composite quality score Core-based statistical area (CBSA) CORF COVID-19 Diagnosis Code (1) B97.29; (2) U07.1; or (3) Any other ICD-10-CM diagnosis code that is recommended by the Centers for Disease Control and Prevention for the coding of a confirmed case of COVID-19. Critical access hospital (CAH) Distribution arrangement Distribution payment DME Downstream collaboration agent Downstream distribution arrangement Downstream distribution payment Dual-eligibility risk adjustment factor EFT Episode benchmark price Episode of care (or Episode) (1) The date of discharge from the anchor hospitalization (with the day of discharge itself being counted as the first day of the 90-day post-discharge period); or (2) The date of service for the anchor procedure. ESRD . Gainsharing payment HCAHPS HCPCS HHA Historical episode payment Hospital ICD-CM Inpatient prospective payment systems (IPPS) Internal cost savings IPF IRF Low-volume hospital Lower-extremity joint replacement LTCH Mandatory MSA Medicare severity diagnosis-related group (MS-DRG) Medicare-dependent, small rural hospital (MDH) Member of the NPPGP NPPGP member Member of the PGP PGP member Member of the TGP TGP member Metropolitan Statistical Area (MSA) Net payment reconciliation amount (NPRA) Nonphysician practitioner (1) A physician assistant who satisfies the qualifications set forth at § 410.74(a)(2)(i) and (ii) of this chapter. (2) A nurse practitioner who satisfies the qualifications set forth at § 410.75(b) of this chapter. (3) A clinical nurse specialist who satisfies the qualifications set forth at § 410.76(b) of this chapter. (4) A certified registered nurse anesthetist (as defined at § 410.69(b)). (5) A clinical social worker (as defined at § 410.73(a)). (6) A registered dietician or nutrition professional (as defined at § 410.134). NPI NPPGP OIG OP THA/OP TKA OPPS PAC Participant hospital (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) Between February 1, 2018 and September 30, 2021 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. (3) Beginning October 1, 2021, a hospital that is not a rural hospital or a low-volume hospital as defined in § 510.2, as of July 4, 2021 (based on the date of the CMS notification letter and not the effective date of the rural reclassification, if applicable) with a CCN primary address located in a mandatory MSA. PBPM Performance year PGP Physician Post-episode spending amount Provider of outpatient therapy services (1) Outpatient physical therapy services as defined in § 410.60 of this chapter. (2) Outpatient occupational therapy services as defined in § 410.59 of this chapter. (3) Outpatient speech-language pathology services as defined in § 410.62 of this chapter. Quality-adjusted target price Quality improvement points Quality performance points Reconciliation payment Reconciliation target price Region Repayment amount Rural hospital (1) Is located in a rural area as defined under § 412.64 of this chapter. (2) Is located in a rural census tract defined under § 412.103(a)(1) of this chapter. (3) Has reclassified as a rural hospital under § 412.103 of this chapter. Rural referral center (RRC) Sharing arrangement SNF Sole community hospital (SCH) TGP Therapist (1) Physical therapist. (2) Occupational therapist. (3) Speech-language pathologist. Therapist in private practice (1) Complies with the special provisions for physical therapists in private practice in § 410.60(c) of this chapter; (2) Complies with the special provisions for occupational therapists in private practice in § 410.59(c) of this chapter; or (3) Complies with the special provisions for speech-language pathologists in private practice in § 410.62(c) of this chapter. TIN TKA/THA Voluntary MSA [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 610, 611, Jan. 3, 2017; 82 FR 57103, Dec. 1, 2017; 85 FR 19292, Apr. 6, 2020; 85 FR 71198, Nov. 6, 2020; 86 FR 23569, May 3, 2021] Subpart B—Comprehensive Care for Joint Replacement Program Participants § 510.100 Episodes being tested. (a) Initiation of an episode. (1) The participant hospital admits the beneficiary for an anchor hospitalization; or (2) On or after July 4, 2021, an anchor procedure is performed at the participant hospital. (b) Exclusions. (1) The hospital is an episode initiator for an LEJR episode in the risk-bearing period of Models 2 or 4 of BPCI. (2) The hospital is participating in Model 1 of BPCI. (3) These exclusions cease to apply as of the date that the hospital no longer meets any of the conditions specified in this paragraph. [80 FR 73540, Nov. 24, 2015, as amended at 86 FR 23570, May 3, 2021] § 510.105 Geographic areas. (a) General. (1) All counties within each of the selected MSAs are selected for inclusion in the CJR model. (2) Beginning with performance year 3, the selected MSAs are designated as either mandatory participation MSAs or voluntary participation MSAs. (3) Beginning with performance year 6, only the 34 MSAs designated as mandatory participation MSAs as of performance year 3. (b) Stratification criteria. (c) Exclusions. (1) Had fewer than 400 episodes between July 1, 2013 and June 30, 2014. (2) Had fewer than 400 non-Model 1, 2, or 4 BPCI episodes as of October 1, 2015. (3) Failed either or both of the following rules regarding participation in BPCI: (i) More than 50 percent of eligible episodes initiated in a BPCI Model 2 or 4 initiating hospital. (ii) More than 50 percent of eligible episodes that included SNF or HHA services, where the SNF or HHA services were furnished by a BPCI Model 3 initiating HHA or SNF. (4) For MSAs including both Maryland and non-Maryland counties, more than 50 percent of eligible episodes were initiated at a Maryland hospital. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 57103, Dec. 1, 2017; 86 FR 23570, May 3, 2021] § 510.110 Access to records and retention. Participant hospitals, CJR collaborators, collaboration agents, downstream collaboration agents, and any other individuals or entities performing CJR activities must do all of the following: (a) Allow the Government, including CMS, OIG, HHS and the Comptroller General or their designees, scheduled and unscheduled access to all books, contracts, records, documents and other evidence (including data related to utilization and payments, quality criteria, billings, lists of CJR collaborators, sharing arrangements, distribution arrangements, downstream distribution arrangements and the documentation required under §§ 510.500(d) and 510.525(c)) sufficient to enable the audit, evaluation, inspection or investigation of any of the following: (1) The individual's or entity's compliance with CJR model requirements. (2) The calculation, distribution, receipt, or recoupment of gainsharing payments, alignment payments, distribution payments, and downstream distribution payments. (3) The obligation to repay any reconciliation payments owed to CMS. (4) The quality of the services furnished to a CJR beneficiary during a CJR episode. (5) The sufficiency of CJR beneficiary notifications. (6) The accuracy of the CJR participant hospital's submissions under CEHRT use requirements. (b) Maintain all such books, contracts, records, documents, and other evidence for a period of 10 years from the last day of the participant hospital's participation in the CJR model or from the date of completion of any audit, evaluation, inspection, or investigation, whichever is later, unless— (1) CMS determines a particular record or group of records should be retained for a longer period and notifies the participant hospital at least 30 calendar days before the disposition date; or (2) There has been a dispute or allegation of fraud or similar fault against the participant hospital, CJR collaborator, collaboration agents, downstream collaboration agent, or any other individual or entity performing CJR activities in which case the records must be maintained for 6 years from the date of any resulting final resolution of the dispute or allegation of fraud or similar fault. [82 FR 612, Jan. 3, 2017] § 510.115 Voluntary participation election. (a) General. (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. (c) Voluntary participation election letter. (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). (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. [82 FR 57103, Dec. 1, 2017] § 510.120 CJR participant hospital CEHRT track requirements. (a) CJR CEHRT use. (1) CEHRT use. (2) No CEHRT use. (b) Clinician financial arrangements list. (1) CJR collaborators. (i) The name, TIN, and NPI of the CJR collaborator. (ii) The start date and, if applicable, end date, for the sharing arrangement between the CJR participant hospital and the CJR collaborator. (2) Collaboration agents. (i) The name and TIN of the CJR collaborator and the name, TIN, and NPI of the collaboration agent. (ii) The start date and, if applicable, end date, for the distribution arrangement between the CJR collaborator and the collaboration agent. (3) Downstream collaboration agents. (i) The name and TIN of the CJR collaborator and the name and TIN of the collaboration agent and the name, TIN, and NPI of the downstream collaboration agent. (ii) The start date and, if applicable, end date, for the downstream distribution arrangement between the collaboration agent and the downstream collaboration agent. (c) Clinician engagement list. (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) The CJR participant hospital must retain and provide access to the required documentation in accordance with § 510.110. (d) Attestation to no individuals. (e) Documentation requirements. (2) The participant hospital must retain and provide access to the required documentation in accordance with § 510.110. [82 FR 612, Jan. 3, 2017, as amended at 82 FR 57103, Dec. 1, 2017; 86 FR 23570, May 3, 2021] Subpart C—Scope of Episodes § 510.200 Time periods, included and excluded services, and attribution. (a) Time periods. (b) Included services. (1) Physicians' services. (2) Inpatient hospital services (including hospital readmissions). (3) IPF services. (4) LTCH services. (5) IRF services. (6) SNF services. (7) HHA services. (8) Hospital outpatient services. (9) Outpatient therapy services. (10) Clinical laboratory services. (11) DME. (12) Part B drugs and biologicals. (13) Hospice services. (14) PBPM payments under models tested under section 1115A of the Act. (15) The surgeon's Part B claim for the LEJR procedure dated within the 3 days prior to an inpatient admission, if the LEJR procedure was performed at the participant hospital on an outpatient basis but the patient was subsequently admitted as an inpatient, resulting in an anchor hospitalization. (c) Episode attribution. (d) Excluded services. (1) Hemophilia clotting factors provided in accordance with § 412.115 of this chapter. (2) New technology add-on payments, as defined in part 412, subpart F of this chapter. (3) Transitional pass-through payments for medical devices as defined in § 419.66 of this chapter. (4) Items and services unrelated to the anchor hospitalization or the anchor procedure. Excluded services include, but are not limited, to the following: (i) Inpatient hospital admissions for MS-DRGs that group to the following categories of diagnoses: (A) Oncology. (B) Trauma medical. (C) Chronic disease surgical, such as prostatectomy. (D) Acute disease surgical, such as appendectomy. (ii) Medicare Part B services, as identified by the principal ICD-CM diagnosis code on the claim (based on the ICD-CM version in use during the performance year) that group to the following categories of diagnoses: (A) Acute disease diagnoses, such as severe head injury. (B) Certain chronic disease diagnoses, as specified by CMS on a diagnosis-by-diagnosis basis depending on whether the condition was likely to have been affected by the LEJR procedure and recovery period or whether substantial services were likely to be provided for the chronic condition during the episode. Such chronic disease diagnoses are posted on the CMS Web site and may be revised in accordance with paragraph (e) of this section. (iii) Certain PBPM payments under models tested under section 1115A of the Act. PBPM model payments that CMS determines to be primarily used for care coordination or care management services for clinical conditions in excluded categories of diagnoses, as described in this paragraph. (A) The list of excluded PBPM payments is posted on the CMS Web site and are revised in accordance with paragraph (e) of this section. (B) Notwithstanding the foregoing, all PBPM model payments funded from CMS' Innovation Center appropriation are excluded from the episode. (5) Certain incentive programs and add on payments under existing Medicare payment systems in accordance with § 510.300(b)(6) of this chapter. (6) For performance years 1 through 4 and for performance year subsets 5.1 and 5.2, payments for otherwise included items and services in excess of 2 standard deviations above the mean regional episode payment in accordance with § 510.300(b)(5). (7) For performance years 6 through 8 only, payments for otherwise included items and services in excess of the 99th percentile of regional spending, ranked within each region, for each of the four MS-DRG target price categories, as specified in § 510.300(a)(1) and (6), for performance years 6 through 8, in accordance with § 510.300(b)(5). (e) Updating the lists of excluded services. (2) For performance years 1 through 5 only, on an annual basis, or more frequently as needed, CMS updates the list of excluded services to reflect annual coding changes or other issues brought to CMS' attention. (3) For performance years 1 through 5 only, CMS applies the following standards when revising the list of excluded services for reasons other than to reflect annual coding changes: (i) Items or services that are directly related to the LEJR procedure or the quality or safety of LEJR care would be included in the episode. (ii) Items or services for chronic conditions that may be affected by the LEJR procedure or post-surgical care would be related and included in the episode. (iii) Items and services for chronic conditions that are generally not affected by the LEJR procedure or post-surgical care would be excluded from the episode. (iv) Items and services for acute clinical conditions not arising from existing, episode-related chronic clinical conditions or complications of LEJR surgery would be excluded from the episode. (v) PBPM payments under CMS models determined to be primarily used for care coordination or care management services for clinical conditions in excluded categories of diagnoses, as described in § 510.200(d), would be excluded from the episode. (4) For performance years 1 through 5 only, CMS posts the following to the CMS website: (i) Potential revisions to the exclusion to allow for public comment; and (ii) An updated exclusions list after consideration of public comment. (5) For performance years 6 through 8, the list of excluded services posted on the CMS website as it appears at the beginning of performance year 5 will apply and will not be updated. [80 FR 73540, Nov. 24, 2015, as amended at 85 FR 19292, Apr. 6, 2020; 85 FR 71199, Nov. 6, 2020; 86 FR 23570, May 3, 2021] § 510.205 Beneficiary inclusion criteria. (a) Episodes tested in the CJR model include only those in which care is furnished to beneficiaries who meet all of the following criteria upon admission to the anchor hospitalization: (1) Are enrolled in Medicare Parts A and Part B. (2) Eligibility for Medicare is not on the basis of end stage renal disease, as described in § 406.13 of this chapter. (3) Are not enrolled in any managed care plan (for example, Medicare Advantage, health care prepayment plans, or cost-based health maintenance organizations). (4) Are not covered under a United Mine Workers of America health care plan. (5) Have Medicare as their primary payer. (6) For episodes beginning on or after July 1, 2017, are not prospectively assigned to— (i) An ACO in the Next Generation ACO model; (ii) An ACO in a track of the Comprehensive ESRD Care Model incorporating downside risk for financial losses; or (iii) A Shared Savings Program ACO in the ENHANCED track (formerly Track 3). (b) If at any time during the episode a beneficiary no longer meets all of the criteria in this section, the episode is canceled in accordance with § 510.210(b). [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 613, Jan. 3, 2017; 86 FR 23571, May 3, 2021] § 510.210 Determination of the episode. (a) General. (2) On or after July 4, 2021, an episode— (i) Begins and ends in the manner specified in paragraph (a)(1) of this section; or (ii) Begins on the date of service of an anchor procedure furnished to a Medicare beneficiary described in § 510.205 and ends on the 90th day after the date of service of the anchor procedure. (b) Cancellation of an episode. (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, or, on or after July 4, 2021, receives an anchor procedure at any participant hospital. (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. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 57104, Dec. 1, 2017; 86 FR 23571, May 3, 2021] Subpart D—Pricing and Payment § 510.300 Determination of episode quality-adjusted target prices. (a) General. (1) MS-DRG and fracture status. (i)(A) MS-DRG 469 with hip fracture; or (B) For episodes beginning on or after October 1, 2020, MS-DRG 521; (ii) MS-DRG 469 without hip fracture; (iii)(A) MS-DRG 470 with hip fracture; or (B) For episodes beginning on or after October 1, 2020, MS-DRG 522; or (iv) MS-DRG 470 without hip fracture. (2) Applicable time period for performance year or performance year subset episode quality-adjusted target prices. (3) Episodes that straddle performance years, performance year subsets, or payment updates. (i) For episodes beginning on or after April 1, 2016 and ending on or before September 30, 2021, the date of admission for the anchor hospitalization. (ii) For episodes beginning on or after July 4, 2021 and ending on or after October 1, 2021, the date of the anchor procedure or the date of admission for the anchor hospitalization, as applicable. (4) Identifying episodes with hip fracture. (i) For performance years 1 through 5 only, on an annual basis, or more frequently as needed, CMS updates the list of ICD-CM hip fracture diagnosis codes to reflect coding changes or other issues brought to CMS' attention. (ii) For performance years 1 through 5 only, CMS applies the following standards when revising the list of ICD-CM hip fracture diagnosis codes. (A) The ICD-CM diagnosis code is sufficiently specific that it represents a bone fracture for which a physician could determine that a hip replacement procedure, either a Partial Hip Arthroplasty (PHA) or a THA, could be the primary surgical treatment. (B) The ICD-CM diagnosis code is the primary reason (that is, principal diagnosis code) for the anchor hospitalization. (iii) For performance years 1 through 5 only, CMS posts the following to the CMS website: (A) Potential ICD-CM hip fracture diagnosis codes for public comment; and (B) A final ICD-CM hip fracture diagnosis code list after consideration of public comment. (iv) For performance years 6 through 8, the hip fracture diagnosis code list posted at https://innovation.cms.gov/Files/worksheets/cjr-icd10hipfracturecodes.xlsx (5) Quality performance. (6) For episodes beginning on or after July 4, 2021 that are initiated by an anchor procedure, permitted OP TKAs and OP THAs are grouped with MS-DRG 470 or MS-DRG 522 episodes as follows: (i) Permitted OP THAs with hip fracture group with MS-DRG 522. (ii) Permitted OP THAs without hip fracture and permitted OP TKAs group with MS-DRG 470. (b) Episode quality-adjusted target price. (i) Episodes beginning in 2012 through 2014 for performance years 1 and 2. (ii) Episodes beginning in 2014 through 2016 for performance years 3 and 4. (iii) Episodes beginning in 2016 through 2018 for each of performance year subsets 5.1 and 5.2. (iv) Episodes beginning in 2019 for performance year 6. (v) Episodes beginning in 2021 for performance year 7. (vi) Episodes beginning in 2022 for performance year 8. (2) Specifically, the blend consists of the following: (i) Two-thirds of the participant hospital's own historical episode payments and one-third of the regional historical episode payments for performance years 1 and 2. (ii) One-third of the hospital's own historical episode payments and two-thirds of the regional historical episode payments for performance year 3. (iii) Regional historical episode payments for performance year 4, for each subset of performance year 5, and performance years 6 through 8. (3) Exception for low-volume hospitals. (4) Exception for recently merged or split hospitals. (5) Exception for high episode spending. (ii) For performance years 6 through 8, episode payments are capped at the 99th percentile of regional spending for each of the four MS-DRG categories, as specified in § 510.300(a)(1) and (6). (6) Exclusion of incentive programs and add-on payments under existing Medicare payment systems. (7) Communication of episode quality-adjusted target prices. (8) Inclusion of reconciliation payments and repayments. (c) Discount factor. (1) Discount factors affected by the quality incentive payments and the composite quality score. (2) Discount factor for reconciliation payments. (3) Discount factors for repayment amounts. (i) Not applicable in performance year 1, as the requirement for hospital repayment under the CJR model is waived in performance year 1; (ii) In performance years 2 and 3, 2.0 percent; and (iii) In performance years 4, each subset of performance year 5, and performance years 6 through 8, 3.0 percent. (d) Data sharing. (i) Determine appropriate ways to increase the coordination of care. (ii) Improve quality. (iii) Enhance efficiencies in the delivery of care. (iv) Otherwise achieve the goals of the CJR model described in this section. (2) Beneficiary-identifiable data. (ii) The minimum data necessary to achieve the goals of the CJR model, as determined by CMS, may be provided under this section for a participant hospital's baseline period and no less frequently than on a quarterly basis throughout the hospital's participation in the CJR model. [80 FR 73540, Nov. 24, 2015, as amended at 81 FR 11451, Mar. 4, 2016; 82 FR 613, Jan. 3, 2017; 82 FR 57104, Dec. 1, 2017; 85 FR 71199, Nov. 6, 2020; 86 FR 23571, May 3, 2021] § 510.301 Determination of reconciliation target prices. Beginning with performance year 6, the quality-adjusted target price computed under § 510.300 is further adjusted for risk and market trends as described in this section to arrive at the reconciliation target price amount, with the exception of episodes that are reconciled in performance year 6 but subject to a performance year subset 5.2 target price. Specifically: (a) Risk adjustment. (i) The CJR HCC count risk adjustment factor uses five variables, representing beneficiaries with zero, one, two, three, or four or more CMS-HCC conditions. (ii) The age bracket risk adjustment factor uses four variables, representing beneficiaries aged— (A) Less than 65 years; (B) 65 to 74 years; (C) 75 years to 84 years; or (D) 85 years or more. (iii) The dual-eligibility status factor uses two variables, representing beneficiaries that are eligible for full Medicaid benefits or beneficiaries that are not eligible for full Medicaid benefits. (2) All three factors are computed prior to the start of performance years 6 and 8 via a linear regression analysis. The regression analysis is computed using 1 year of claims data as follows: (i) For performance year 6, CMS uses claims data with dates of service dated January 1, 2019 to December 31, 2019. (ii) For performance year 7, CMS uses the same regression analysis results and corresponding coefficients that were calculated for performance year 6. (iii) For performance year 8, CMS uses claims data with dates of service dated January 1, 2021 to December 31, 2021. (3)(i) The dependent variable in the annual regression that produces the risk adjustment coefficients is equal to the difference between the log transformed target price calculated under § 510.300 and the capped episode costs as described in § 510.300(b)(5)(ii). (ii) The independent variables are binary values assigned to each CJR HCC count variable, age bracket variable and dual-eligibility status variable. (iii) Using these variables, the annual regression produces exponentiated coefficients to determine the anticipated marginal effect of each risk adjustment factor on episode costs. CMS transforms, or exponentiate, these coefficients in order to “reverse” the previous logarithmic transformation, and the resulting coefficients are the CJR HCC count risk adjustment factor, the age bracket risk adjustment factor, and the dual-eligibility status factor that would be used during reconciliation for the subsequent performance year. (4)(i) At the time of reconciliation, the quality adjusted target prices computed under § 510.300 are risk adjusted at the beneficiary level by applying the applicable CJR HCC count risk adjustment factor, the age bracket risk adjustment factor, and the dual-eligibility risk adjustment factor specific to the beneficiary in the episode. (ii)(A) For the CJR HCC count risk adjustment factor, applicable means the coefficient that applies to the CMS-HCC condition count for the beneficiary in the episode; (B) For the age bracket risk adjustment factor, applicable means the coefficient for the age bracket into which the beneficiary falls on the first day of the episode; and (C) For the dual-eligibility risk adjustment factor, applicable means the coefficient for beneficiaries that are eligible for full Medicaid benefits on the first day of the episode. (5)(i) The risk-adjusted target prices are normalized at reconciliation to remove the overall impact of adjusting for age, CJR HCC count, and dual-eligibility status on the national average target price. (ii) The normalization factor is the national mean of the target price for all episode types divided by the national mean of the risk-adjusted target price. (iii) CMS applies the normalization factor to the previously calculated, beneficiary-level, risk-adjusted target prices specific to each episode region and MS-DRG combination (as specified in paragraph (a)(4) of this section). (iv) These normalized target prices are then further adjusted for market trends (as specified in paragraph (b) of this section) and quality performance (as specified at § 510.300) to become the reconciliation target prices, which are compared to actual episode costs at reconciliation, as specified in § 510.305(m)(1)(i). (b) Market trend adjustment factor. (2) This adjustment is accomplished by multiplying each risk-adjusted quality-adjusted target price computed under § 510.300 and paragraph (a) of this section by the applicable market trend adjustment factor. (3) The applicable market trend adjustment factor is calculated as the percent difference between the average regional MS-DRG episode costs computed using the performance year claims data and comparison average regional MS-DRG fracture episode costs computed using historical calendar year claims data used to calculate the regional target prices in effect for that performance year. [86 FR 23571, May 3, 2021] § 510.305 Determination of the NPRA and reconciliation process. (a) General. (b) Reconciliation. (2) For performance years 6 through 8, CMS conducts one reconciliation process, which CMS performs as described in paragraphs (l) and (m) of this section after the end of each performance year, to establish final payment amounts to participant hospitals for CJR model episodes for a given performance year. (3) Following the end of each performance year, for performance years 1 through 4 and for performance year 5, each subset thereof, CMS determines actual episode payments for each episode for the performance year (other than episodes that have been canceled in accordance with § 510.210(b)) and determines the amount of a reconciliation payment or repayment amount. (c) Data used. (d) Annual reconciliation for performance years 1 through 5. (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. (2) CMS— (i) Calculates the NPRA for each participant hospital in accordance with paragraph (e) of this section including the adjustments provided for in paragraph (e)(1)(iv) of this section; and (ii) Assesses whether hospitals meet specified quality requirements under § 510.315. (e) Calculation of the NPRA for performance years 1 through 5. (1) Initial calculation. (i) Determines actual episode payments for each episode included in the performance year or performance year subset (other than episodes that have been canceled in accordance with § 510.210(b)) using claims data that is available 2 months after the end of the performance year or performance year subset. Actual episode payments are capped, as applicable, at the amount determined in accordance with § 510.300(b)(5) for the performance year or performance year subset at the amount determined in paragraph (k) of this section for episodes affected by extreme and uncontrollable circumstances, or at the quality adjusted target price determined for that episode under § 510.300 for an episode with actual episode payments that include a claim with a COVID-19 diagnosis code and initiate after the earlier of March 31, 2021 or the last day of the emergency period described in paragraph (k)(4) of this section. (ii) Multiplies each episode quality-adjusted target price by the number of episodes included in the performance year or performance year subset (other than episodes that have been canceled in accordance with § 510.210(b)) to which that episode quality-adjusted target price applies. (iii) Aggregates the amounts computed in paragraph (e)(1)(ii) of this section for all episodes included in the performance year or performance year subset (other than episodes that have been canceled in accordance with § 510.210(b)). (iv) Subtracts the amount determined under paragraph (e)(1)(i) of this section from the amount determined under paragraph (e)(1)(iii) of this section. (v) Applies the following prior to determination of the reconciliation payment or repayment amount: (A) Limitation on loss. ( 1 ( 2 ( 3 ( 4 ( 5 (B) Limitation on gain. ( 1 ( 2 ( 3 ( 4 ( 5 (C) Financial loss limits for rural hospitals, SCHs, MDHs, and RRCs. (f) Determination of reconciliation or repayment amount Determination of the reconciliation or repayment amount. (ii) Subject to paragraph (f)(1)(iii) of this section, for performance years 2 through 4 and for each of performance year subsets 5.1 and 5.2, results from the subsequent reconciliation calculation for a prior year's reconciliation as described in paragraph (i) of this section and the post-episode spending and ACO overlap calculations as described in paragraph (j) of this section are added to the current year's NPRA in order to determine the reconciliation payment or repayment amount. (iii) The reconciliation or repayment amount may be adjusted as provided in § 510.410(b). (iv) Results from the performance year 6 reconciliation and post-episode spending calculations as described in paragraph (m) of this section are added together in order to determine the reconciliation payment or repayment amount for performance year 6. (v) Results from the performance year 7 reconciliation and post-episode spending calculations as described in paragraph (m) of this section are added together in order to determine the reconciliation payment or repayment amount for performance year 7. (vi) Results from the performance year 8 reconciliation and post-episode spending calculations as described in paragraph (m) of this section are added together in order to determine the reconciliation payment or repayment amount for performance year 8. (2) Reconciliation payment. (3) Repayment amount. (g) Determination of eligibility for reconciliation based on quality. (2) If the hospital's composite quality score described in § 510.315 is acceptable (defined as greater than or equal to 5.00 and less than 6.9), good (defined as greater than or equal to 6.9 and less than or equal to 15.0), or excellent (defined as greater than 15.0), and the hospital is determined to have a positive NPRA under § 510.305(e)), the hospital is eligible for a reconciliation payment. (3) If the hospital's composite quality score described in § 510.315 is below acceptable, defined as less than 4.00 for a performance year or performance year subset, the hospital is not eligible for a reconciliation payment. (4) If the hospital is found to be engaged in an inappropriate and systemic under delivery of care, the quality of the care provided must be considered to be seriously compromised and the hospital must be ineligible to receive or retain a reconciliation payment for any period in which such under delivery of care was found to occur. (h) Reconciliation report. (1) Information on the participant hospital's composite quality score described in § 510.315. (2) The total actual episode payments for the participant hospital. (3) The NPRA. (4) Whether the participant hospital is eligible for a reconciliation payment or must make a repayment to Medicare. (5) As applicable, the NPRA and subsequent reconciliation calculation amount for the previous performance year or performance year subset. (6) As applicable, the post-episode spending amount and ACO overlap calculation for the previous performance year or performance year subset. (7) The reconciliation payment or repayment amount. (i) Subsequent reconciliation calculation. (2) The subsequent calculation for each of performance years 1 through 4 and performance year subset 5.1 occurs concurrently with the first reconciliation process for the following performance year (or in the case of performance year subset 5.1, with the first reconciliation of performance year subset 5.2). If the result of the subsequent calculation is different than zero, CMS applies the stop-loss and stop-gain limits in paragraph (e) of this section to the aggregate calculation of the amounts described in paragraphs (e)(1)(iv) and (i)(1) of this section for that performance year or performance year subset (the initial reconciliation and the subsequent reconciliation calculation) to ensure such amount does not exceed the applicable stop-loss or stop-gain limits. The subsequent reconciliation calculation for performance year subset 5.2 will occur independently in 2023. (j) Additional adjustments to the reconciliation payment or repayment amount. (i) The Pioneer ACO model. (ii) The Medicare Shared Savings Program (excluding Track 3 for CJR episodes that initiate on or after July 1, 2017). (iii) The Comprehensive ESRD Care Initiative (excluding a track with downside risk for CJR episodes that initiate after July 1, 2017). (iv) The Next Generation ACO model (excluding CJR episodes that initiate on or after July 1, 2017). (2) If the average post-episode Medicare Parts A and B payments for a participant hospital in the prior performance year or performance year subset is greater than 3 standard deviations above the regional average post-episode payments for the same performance year or performance year subset, then the spending amount exceeding 3 standard deviations above the regional average post-episode payments for the same performance year or performance year subset is subtracted from the net reconciliation or added to the repayment amount for the subsequent performance year for years 1 through 4 and performance year subset 5.1, and assessed independently for performance year subset 5.2. (k) Extreme and uncontrollable circumstances adjustment. (i) Is located in an emergency area during an emergency period, as those terms are defined in section 1135(g) of the Act, for which the Secretary has issued a waiver under section 1135; and (ii) Is located in a county, parish, or tribal government designated in a major disaster declaration under the Stafford Act. (2)(i) For a non-fracture episode with a date of admission to the anchor hospitalization that is on or within 30 days before the date that the emergency period (as defined in section 1135(g) of the Act) begins, actual episode payments are capped at the target price determined for that episode under § 510.300. (ii) For a fracture episode with a date of admission to the anchor hospitalization that is on or within 30 days before or after the date that the emergency period (as defined in section 1135(g) of the Act) begins, actual episode payments are capped at the target price determined for that episode under § 510.300. (3) The following is an extreme and uncontrollable circumstances adjustment for 2019 Novel Coronavirus (previously referred to as 2019-nCoV, now as COVID-19): (i) The episode spending adjustments specified in paragraph (k)(4) of this section apply for a participant hospital that has a CCN primary address that is located in an emergency area during an emergency period, as those terms are defined in section 1135(g) of the Act, for which the Secretary issued a waiver or modification of requirements under section 1135 of the Act on March 13, 2020. (ii) [Reserved] (4) For a fracture or non-fracture episode with a date of admission to the anchor hospitalization that is on or within 30 days before the date that the emergency period (as defined in section 1135(g) of the Act) begins or that occurs on or before March 31, 2021 or the last day of such emergency period, whichever is earlier, actual episode payments are capped at the quality adjusted target price determined for that episode under § 510.300. (l) Annual reconciliation for performance years 6 through 8. (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 for each predecessor participant hospital for episodes where the anchor hospitalization admission or the anchor procedure occurred before the effective date of the reorganization event; and (B) Reconciliation calculations for each new or surviving participant hospital for episodes where the anchor hospitalization admission or anchor procedure occurred on or after the effective date of the reorganization event. (2) CMS— (i) Calculates the NPRA for each participant hospital in accordance with paragraph (m) of this section including the adjustments provided for in paragraph (m)(1)(vii) of this section; and (ii) Assesses whether participant hospitals meet specified quality requirements under § 510.315. (m) Calculation of the NPRA for performance years 6 through 8. (1) In calculating the NPRA for each participant hospital for each performance year, CMS does the following: (i) Determines actual episode payments for each episode included in the performance year (other than episodes that have been canceled in accordance with § 510.210(b)) using claims data that is available 6 months after the end of the performance year. Actual episode payments are capped at the amount determined in accordance with § 510.300(b)(5)(ii) for the performance year, the amount determined in paragraph (k) of this section for episodes affected by extreme and uncontrollable circumstances, or the target price determined for that episode under § 510.300 for episodes that contain a COVID-19 Diagnosis Code as defined in § 510.2. (ii) Multiplies each episode reconciliation target price by the number of episodes included in the performance year (other than episodes that have been canceled in accordance with § 510.210(b)) to which that episode reconciliation target price applies. (iii) Aggregates the amounts computed in paragraph (m)(1)(ii) of this section for all episodes included in the performance year (other than episodes that have been canceled in accordance with § 510.210(b)). (iv) Subtracts the amount determined under paragraph (m)(1)(i) of this section from the amount determined under paragraph (m)(1)(iii) of this section. (v) Performs an additional calculation using claims data available at that time, to account for any episode cancelations due to overlap between the CJR model and other CMS models and programs, or for other reasons as specified in § 510.210(b). (vi) Conducts a post-episode spending calculation as follows: If the average post-episode Medicare Parts A and B payments for a participant hospital in the performance year being reconciled is greater than 3 standard deviations above the regional average post-episode payments for that same performance year, then the spending amount exceeding 3 standard deviations above the regional average post-episode payments for the same performance year is subtracted from the net reconciliation or added to the repayment for that performance year. (vii) Applies the following prior to determination of the reconciliation payment or repayment amount: (A) Limitation on loss. (B) Limitation on gain. (C) Limitation on loss for certain providers. (2) [Reserved] [80 FR 73540, Nov. 24, 2015, as amended at 81 FR 11451, Mar. 4, 2016; 82 FR 613, Jan. 3, 2017; 82 FR 57104, Dec. 1, 2017; 85 FR 19292, Apr. 6, 2020; 85 FR 71199, Nov. 6, 2020; 86 FR 23572, May 3, 2021] Editorial Note: At 86 FR 23572, May 3, 2021, § 510.305 was amended in part by revising paragraph (i); however, the amendment could not be incorporated due to inaccurate amendatory instruction. § 510.310 Appeals process. (a) Notice of calculation error (first level of appeal). (1) Unless the participant hospital provides such notice, CMS deems final the CJR reconciliation report 45 calendar days after it is issued and proceeds with the payment or repayment processes as applicable. (2) If CMS receives a notice of a calculation error within 45 calendar days of the issuance of the reconciliation report, CMS responds in writing within 30 calendar days to either confirm that there was an error in the calculation or verify that the calculation is correct, although CMS reserves the right to an extension upon written notice to the participant hospital. (3) Only participant hospitals may use the dispute resolution process described in this part. (4) Only participant hospitals may use the notice of calculation error process described in this part. (b) Dispute resolution process (second level of appeal). (2) The reconsideration review request must provide a detailed explanation of the basis for the dispute and include supporting documentation for the participant hospital's assertion that CMS or its representatives did not accurately calculate the NPRA, the reconciliation payment, or the repayment amount in accordance with § 510.305. (3) If CMS does not receive a request for reconsideration from the participant hospital within 10 calendar days of the issue date of CMS's response to the participant hospital's notice of calculation error, then CMS's response to the calculation error is deemed final and CMS proceeds with reconciliation payment or repayment processes, as applicable, as described in § 510.305. (4) A CMS reconsideration official notifies the participant hospital in writing within 15 calendar days of receiving the participant hospital's review request of the following: (i) The issues in dispute. (ii) The review procedures. (iii) The procedures (including format and deadlines) for submission of briefs and evidence. (5) The provisions at § 425.804(b), (c), and (e) of this chapter are applicable to reviews conducted in accordance with the reconsideration review process for CJR. (6) The CMS reconsideration official makes all reasonable efforts to issue a written determination within 30 days of the deadline for submission of briefs and evidence. The determination is final and binding. (c) Exception to the process. (d) Notice of a participant hospital's termination from the CJR model. (e) Limitations on review. (1) The selection of models for testing or expansion under section 1115A of the Act. (2) The selection of organizations, sites, or participants to test those models selected. (3) The elements, parameters, scope, and duration of such models for testing or dissemination. (4) Determinations regarding budget neutrality under section 1115A(b)(3) of Act. (5) The termination or modification of the design and implementation of a model under section 1115A(b)(3)(B) of Act. (6) Decisions about expansion of the duration and scope of a model under section 1115A(c) of the Act, including the determination that a model is not expected to meet criteria described in section 1115A(c)(1) or (2) of the Act. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 615, Jan. 3, 2017; 86 FR 23573, May 3, 2021] § 510.315 Composite quality scores for determining reconciliation payment eligibility and quality incentive payments. (a) General. (b) Composite quality score. (1) The hospital's quality performance points for the hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty measure (NQF #1550) described in § 510.400(a)(1). This measure is weighted at 50 percent of the composite quality score. (2) The hospital's quality performance points for the Hospital Consumer Assessment of Healthcare Providers and Systems Survey measure (NQF #0166) described in § 510.400(a)(2). This measure is weighted at 40 percent of the composite quality score. (3) Any additional quality improvement points the hospital may earn as a result of demonstrating improvement on either or both of the quality measures in paragraphs (b)(1) and (2) of this section, as described in paragraph (d) of this section. (4) If applicable, 2 additional points for successful THA/TKA voluntary data submission of patient-reported outcomes and limited risk variable data, as described in § 510.400(b). Successful submission is weighted at 10 percent of the composite quality score. (c) Quality performance points. (1) For the hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty measure (NQF #1550) described in § 510.400(a)(1), CMS assigns the participant hospital measure value to a performance percentile and then quality performance points are assigned based on the following performance percentile scale: (i) 10.00 points for ≥90th. (ii) 9.25 points for ≥80th and <90th. (iii) 8.50 points for ≥70th and <80th; (iv) 7.75 points for ≥60th and <70th. (v) 7.00 points for ≥50th and <60th. (vi) 6.25 points for ≥40th and <50th. (vii) 5.50 points for ≥30th and <40th. (viii) 0.0 points for <30th. (2) For the Hospital Consumer Assessment of Healthcare Providers and Systems Survey measure (NQF #0166) described in § 510.400(a)(2), CMS assigns the participant hospital measure value to a performance percentile and quality performance points are assigned based on the following performance percentile scale: (i) 8.00 points for ≥90th. (ii) 7.40 points for ≥80th and <90th. (iii) 6.80 points for ≥70th and <80th. (iv) 6.20 points for ≥60th and <70th. (v) 5.60 points for ≥50th and <60th. (vi) 5.00 points for ≥40th and <50th. (vii) 4.40 points for ≥30th and <40th. (viii) 0.0 points for <30th. (d) Quality improvement points. (2) For each of performance years 2 through 4, each of performance year subsets 5.1 and 5.2, and each of performance years 6 through 8, if a participant hospital's quality performance percentile on an individual measure described in § 510.400(a) increases from the previous performance year or performance year subset by at least 2 deciles on the performance percentile scale, then the hospital is eligible to receive quality improvement points equal to 10 percent of the total available point for that individual measure up to a maximum composite quality score of 20 points. (e) Exception for hospitals without a measure value. (1) A participant hospital will not have a measure value for the— (i) Hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty measure (NQF #1550) described in § 510.400(a)(1) if the hospital does not meet the minimum 25 case count; or (ii) Hospital Consumer Assessment of Healthcare Providers and Systems Survey measure (NQF #0166) described in § 510.400(a)(2) if the hospital does not meet the minimum of 100 completed survey and does not have 4 consecutive quarters of HCAHPS data. (ii) For either of the measures described in paragraphs (e)(1) or (2) of this section, if CMS identifies an error in the data used to calculate the measure and suppresses the measure value. (f) Quality incentive payments. (1) Performance years 1 through 5. (i) A 1.0 percentage point reduction to the effective discount factor or applicable discount factor for participant hospitals with good quality performance, defined as composite quality scores that are greater than or equal to 6.9 and less than or equal to 15.0; or (ii) A 1.5 percentage point reduction to the effective discount factor or applicable discount factor for participant hospitals with excellent quality performance, defined as composite quality scores that are greater than 15.0. (2) Performance years 6 through 8. (i) A 1.5-percentage point reduction to the effective discount factor or applicable discount factor for participant hospitals with good quality performance, defined as composite quality scores that are greater than or equal to 6.9 and less than or equal to 15.0; or (ii) A 3-percentage point reduction to the effective discount factor or applicable discount factor for participant hospitals with excellent quality performance, defined as composite quality scores that are greater than 15.0. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 615, Jan. 3, 2017; 85 FR 71201, Nov. 6, 2020; 86 FR 23573, May 3, 2021] § 510.320 Treatment of incentive programs or add-on payments under existing Medicare payment systems. The CJR model does not replace any existing Medicare incentive programs or add-on payments. The target price and NPRA for a participant hospital are independent of, and do not affect, any incentive programs or add-on payments under existing Medicare payment systems. § 510.325 Allocation of payments for services that straddle the episode. (a) General. (b) Proration of services. (1) Non-IPPS inpatient services and other inpatient services. (2) Home health agency services. (3) IPPS services. (i) The first day of the IPPS stay is counted as 2 days. (ii) If the actual length of stay that occurred during the episode is equal to or greater than the MS-DRG geometric mean, the normal MS-DRG payment is fully allocated to the episode. (iii) If the actual length of stay that occurred during the episode is less than the geometric mean, the normal MS-DRG payment amount is allocated to the episode based on the number of inpatient days that fall within the episode. (iv) If the full amount is not allocated to the episode, any remainder amount is allocated to the post-episode spending calculation (defined in § 510.2). Subpart E—Quality Measures, Beneficiary Protections, and Compliance Enforcement § 510.400 Quality measures and reporting. (a) Reporting of quality measures. (1) Hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty. (2) Hospital Consumer Assessment of Healthcare Providers and Systems Survey. (b) Requirements for successful voluntary data submission of patient-reported outcomes and limited risk variable data. (1) For each eligible procedure all eleven risk variable data elements are required to be submitted. The eleven risk variables are as follows: (i) Date of birth. (ii) Race. (iii) Ethnicity. (iv) Date of admission to anchor hospitalization. (v) Date of eligible THA/TKA procedure. (vi) Medicare Health Insurance Claim Number. (vii) Body mass index. (viii) Use of chronic (≥90 day) narcotics. (ix) Total painful joint count. (x) Quantified spinal pain. (xi) Single Item Health Literacy Screening (SILS2) questionnaire. (2) Hospitals must also submit the amount of requested THA/TKA patient-reported outcomes data required for each performance year or performance year subset of the model in order to be considered successful in submitting voluntary data. (i) The amount of requested THA/TKA patient-reported outcomes data to submit, in order to be considered successful will increase each subsequent year of the model over the first 5 years of the model (with the exception of performance year subset 5.2, for which CMS will request the same amount of THA/TKA patient-reported outcomes data as performance year subset 5.1, updated to reflect the timeframe applicable to performance year subset 5.2). (ii) A phase-in approach that determines the amount of requested THA/TKA patient-reported outcomes data to submit over performance years 1 through 4 and performance year subset 5.1 (with the exception of performance year subset 5.2, for which CMS will request the same amount of THA/TKA patient-reported outcomes as performance year subset 5.1, updated to reflect the timeframe applicable to performance year subset 5.2) of the model will be applied so that in year 1 successful submission of data would mean CMS received all requested THA/TKA patient-reported outcomes and limited risk variable data on both of the following: (A) Greater than or equal to 50 percent of eligible procedures or greater than or equal to 50 eligible patients during the data collection period. (B) Submission of requested THA/TKA PRO and limited risk variable data is completed within 60 days of the most recent performance period. (3) For years 1 through 5 of the model an increasing amount of data is requested by CMS for each performance period as follows: (i) Year 1 (2016). Submit pre-operative data on primary elective THA/TKA procedures for ≥50% or ≥50 eligible procedures performed between July 1, 2016 and August 31, 2016, unless CMS requests a more limited data set, in which case, submit all requested data elements. (ii) Year 2 (2017). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥50% or ≥50 eligible procedures performed between July 1, 2016 through August 31, 2016; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥60% or ≥75 procedures performed between September 1, 2016 through June 30, 2017, unless CMS requests a more limited data set, in which case, submit all requested data elements. (iii) Year 3 (2018). Submit— (A) POST-operative data on primary elective THA/TKA procedures for ≥60% or ≥75 procedures performed between September 1, 2016 and June 30, 2017; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥70% or ≥100 procedures performed between July 1, 2017 and June 30, 2018, unless CMS requests a more limited data set, in which case, submit all requested data elements. (iv) Year 4 (2019). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥70% or ≥100 procedures performed between July 1, 2017 and June 30, 2018; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥80% or ≥200 procedures performed between July 1, 2018 and June 30, 2019, unless CMS requests a more limited data set, in which case, submit all requested data elements. (v) Year 5 (subset 5.1, January 1, 2020-December 31, 2020). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥80% or ≥200 procedures performed between July 1, 2018 and June 30, 2019 and (B) Pre-operative data on primary elective THA/TKA procedures for ≥80% or ≥200 procedures performed between July 1, 2019 and June 30, 2020, unless CMS requests a more limited data set, in which case, submit all requested data elements. (vi) Year 5 (subset 5.2, January 1, 2021-September 30, 2021). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥80% or ≥200 procedures performed between July 1, 2019 and June 30, 2020; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥80% or ≥200 procedures performed between July 1, 2020 and June 30, 2021, unless CMS requests a more limited data set, in which case, submit all requested data elements. (4) For years 6 through 8 of the model the following data are requested by CMS for each performance period as follows: (i) Year 6 (October 1, 2021 to December 31, 2022). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥80% or ≥200 procedures performed between July 1, 2019 and June 30, 2020; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥80% or ≥300 procedures performed between July 1, 2021 and June 30, 2022. (ii) Year 7 (2023). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥80% or ≥300 procedures performed between July 1, 2021 and June 30, 2022; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥85% or ≥400 procedures performed between July 1, 2022 and June 30, 2023. (iii) Year 8 (2024). Submit— (A) Post-operative data on primary elective THA/TKA procedures for ≥85% or ≥400 procedures performed between July 1, 2022 and June 30, 2023; and (B) Pre-operative data on primary elective THA/TKA procedures for ≥90% or ≥500 procedures performed between July 1, 2023 and June 30, 2024. (c) Public reporting. (1) Makes the quality measurement results calculated for the complication and patient survey quality measures described in paragraph (a) of this section for each participant hospital in each performance year publicly available on the CMS Web site in a form and manner as determined by CMS; (2) Shares each participant hospital's quality metrics with the hospital prior to display on the Web site; and (3) Does not publicly report the voluntary patient-reported outcomes and limited risk variable data during this model, but indicates whether a hospital has successfully submitted such data in accordance with § 510.400(b). [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 615, Jan. 3, 2017; 85 FR 71201, Nov. 6, 2020; 86 FR 23574, May 3, 2021; 86 FR 36229, July 9, 2021] § 510.405 Beneficiary choice and beneficiary notification. (a) Beneficiary choice. (1) As part of discharge planning and referral, participant hospitals must provide a complete list of HHAs, SNFs, IRFs, or LTCHs that are participating in the Medicare program, and that serve the geographic area (as defined by the HHA) in which the patient resides, or in the case of a SNF, IRF, or LTCH, in the geographic area requested by the patient. (i) This list must be presented to CJR beneficiaries for whom home health care, SNF, IRF, or LTCH services are medically necessary. (ii) Participant hospitals must specify on the list those post-acute care providers on the list with whom they have a sharing arrangement. (iii) Participant hospitals may recommend preferred providers and suppliers, consistent with applicable statutes and regulations. (iv) Participant hospitals may not limit beneficiary choice to any list of providers or suppliers in any manner other than that permitted under applicable statutes and regulations. (v) Participant hospitals must take into account patient and family preferences when they are expressed. (2) Participant hospitals may not charge any CJR collaborator a fee to be included on any list of preferred providers or suppliers, nor may the participant hospital accept such payments. (b) Required beneficiary notification Participant hospital beneficiary notification Notification to beneficiaries. (ii) Timing of notification. (iii) List of beneficaries receiving a notification. (iv) Content of notification. (A) A detailed explanation of the model and how it might be expected to affect the beneficiary's care. (B) Notification that the beneficiary retains freedom of choice to choose providers and services. (C) Explanation of how patients can access care records and claims data through an available patient portal, and how they can share access to their Blue Button® electronic health information with caregivers. (D) A statement that all existing Medicare beneficiary protections continue to be available to the beneficiary. These include the ability to report concerns of substandard care to Quality Improvement Organizations or the 1-800-MEDICARE helpline. (E) A list of the providers, suppliers, and ACOs with whom the CJR participant hospital has a sharing arrangement. This requirement may be fulfilled by the participant hospital including in the detailed notification a Web address where beneficiaries may access the list. (2) CJR collaborator notice. (i) With the exception of ACOs, PGPs, NPPGPs, and TGPs, a CJR participant hospital must require every CJR collaborator that furnishes an item or service to a CJR beneficiary during a CJR episode to provide written notice to the beneficiary of the structure of the model and the existence of the individual's or entity's sharing arrangement. The notice must be provided no later than the time at which the beneficiary first receives an item or service from the CJR collaborator during a CJR episode. In circumstances where, due to the patient's condition, it is not feasible to provide notification at such time, the notification must be provided to the beneficiary or his or her representative as soon as is reasonably practicable. The CJR collaborator must be able to generate a list of all beneficiaries who received such a notice, including the date on which the notice was provided to the beneficiary, to CMS upon request. (ii) A participant hospital must require every PGP, NPPGP, or TGP that is a CJR collaborator where a member of the PGP, member of the NPPGP, or member of the TGP furnishes an item or service to a CJR beneficiary during a CJR episode to provide written notice to the beneficiary of the structure of the model and the existence of the entity's sharing arrangement. The notice must be provided no later than the time at which the beneficiary first receives an item or service from any member of the PGP, member of the NPPGP, or member of the TGP, and the required PGP, NPPGP, or TGP notice may be provided by that member respectively. In circumstances where, due to the patient's condition, it is not feasible to provide notice at such times, the notice must be provided to the beneficiary or his or her representative as soon as is reasonably practicable. The PGP, NPPGP, or TGP must be able to generate a list of all beneficiaries who received such a notice, including the date on which the notice was provided to the beneficiary, to CMS upon request. (iii) A participant hospital must require every ACO that is a CJR collaborator where an ACO participant or ACO provider/supplier furnishes an item or service to a CJR beneficiary during a CJR episode to provide written notice to the beneficiary of the structure of the model and the existence of the entity's sharing arrangement. The notice must be provided no later than the time at which the beneficiary first receives an item or service from any ACO participant or ACO provider/supplier and the required ACO notice may be provided by that ACO participant or ACO provider/supplier respectively. In circumstances where, due to the patient's condition, it is not feasible to provide notice at such times, the notice must be provided to the beneficiary or his or her representative as soon as is reasonably practicable. The ACO must be able to generate a list of all beneficiaries who received such a notice, including the date on which the notice was provided to the beneficiary, to CMS upon request. (3) Discharge planning notice. (i) If the participant hospital knows or should have known that the beneficiary is considering or has decided to receive a non-covered post-acute care service or other non-covered associated service or supply, the participant hospital must notify the beneficiary that the service would not be covered by Medicare. (ii) If the participant hospital is discharging a beneficiary to a SNF prior to the occurrence of a 3-day hospital stay, and the beneficiary is being transferred to or is considering a SNF that would not qualify under the SNF 3-day waiver in § 510.610, the participant hospital must notify the beneficiary in accordance with paragraph (b)(3)(i) of this section that the beneficiary will be responsible for payment for the services furnished by the SNF during that stay, except those services that would be covered by Medicare Part B during a non-covered inpatient SNF stay. (4) Access to records and retention. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 616, Jan. 3, 2017; 86 FR 23574, May 3, 2021] § 510.410 Compliance enforcement. (a) General. (b) Failure to comply. (i) Fails to comply with any requirements of this part or is identified as noncompliant through monitoring by HHS (including CMS and OIG) of the CJR model, including but not limited to the following: (A) Avoiding potentially high cost patients. (B) Targeting potentially low cost patients. (C) Failing to provide medically appropriate services or systematically engaging in the over or under delivery of appropriate care. (D) Failing to provide beneficiaries with complete and accurate information, including required notices. (E) Failing to allow beneficiary choice of medically necessary options, including non-surgical options. (F) Failing to follow the requirements related to sharing arrangements. (G) Failing to participate in CJR model-related evaluation activities conducted by CMS or its contractors or both. (ii) Has signed a sharing arrangement, distribution arrangement, or downstream distribution arrangement that is noncompliant with the requirements of this part. (iii) Takes any action that threatens the health or safety of patients; (iv) Avoids at-risk Medicare beneficiaries, as this term is defined in § 425.20; (v) Avoids patients on the basis of payer status; (vi) Is subject to sanctions or final actions of an accrediting organization or federal, state, or local government agency that could lead to the inability to comply with the requirements and provisions of this part; (vii) Takes any action that CMS determines for program integrity reasons is not in the best interests of the CJR model, or fails to take any action that CMS determines for program integrity reasons should have been taken to further the best interests of the CJR model; (viii) Is subject to action by HHS (including OIG and CMS) or the Department of Justice to redress an allegation of fraud or significant misconduct, including intervening in a False Claims Act qui tam matter, issuing a pre-demand or demand letter under a civil sanction authority, or similar actions; or (ix) Is subject to action involving violations of the physician self-referral law, civil monetary penalties law, federal anti-kickback statute, antitrust laws, or any other applicable Medicare laws, rules, or regulations that are relevant to the CJR model. (2) Remedial actions include the following: (i) Issuing a warning letter to the participant hospital. (ii) Requiring the participant hospital to develop a corrective action plan, commonly referred to as a CAP. (iii) Reducing or eliminating a participant hospital's reconciliation payment. (iv) Requiring a participant hospital to terminate a sharing arrangement with a CJR collaborator and prohibiting further engagement in sharing arrangements with the participant hospital by that CJR collaborator. (v) Terminating the participant hospital's participation in the CJR model. Where a participant is terminated from the CJR model, the participant hospital will remain liable for all negative NPRA generated from episodes of care that ended prior to termination. (3) CMS may add a 25 percent penalty to a repayment amount on the participant hospital's reconciliation report if all of the following conditions are met: (i) CMS has required a corrective action plan from a participant hospital; (ii) The participant hospital owes a repayment amount to CMS; and (iii) The participant hospital fails to timely comply with the corrective action plan or is noncompliant with the CJR model's requirements. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 617, Jan. 3, 2017; 82 FR 57104, Dec. 1, 2017] Subpart F—Financial Arrangements and Beneficiary Incentives § 510.500 Sharing arrangements under the CJR model. (a) General. (2) A sharing arrangement must comply with the provisions of this section and all other applicable laws and regulations, including the applicable fraud and abuse laws and all applicable payment and coverage requirements. (3) Participant hospitals must develop, maintain, and use a set of written policies for selecting individuals and entities to be CJR collaborators. These policies must contain criteria related to, and inclusive of, the quality of care delivered by the potential CJR collaborator. The selection criteria cannot be based directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the participant hospital, any CJR collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a participant hospital, CJR collaborator, collaboration agent, or downstream collaboration agent. A selection criterion that considers whether a potential CJR collaborator has performed a reasonable minimum number of services that would qualify as CJR activities will be deemed not to violate the volume or value standard if the purpose of the criterion is to ensure the quality of care furnished to CJR beneficiaries. (4) If a participant hospital enters into a sharing arrangement, its compliance program must include oversight of sharing arrangements and compliance with the applicable requirements of the CJR model. (b) Requirements. (2) Participation in a sharing arrangement must be voluntary and without penalty for nonparticipation. (3) The sharing arrangement must require the CJR collaborator and its employees, contractors (including collaboration agents), and subcontractors (including downstream collaboration agents) to comply with all of the following: (i) The applicable provisions of this part (including requirements regarding beneficiary notifications, access to records, record retention, and participation in any evaluation, monitoring, compliance, and enforcement activities performed by CMS or its designees). (ii) All applicable Medicare provider enrollment requirements at § 424.500 of this chapter, including having a valid and active TIN or NPI, during the term of the sharing arrangement. (iii) All other applicable laws and regulations. (4) The sharing arrangement must require the CJR collaborator to have or be covered by a compliance program that includes oversight of the sharing arrangement and compliance with the requirements of the CJR model that apply to its role as a CJR collaborator, including any distribution arrangements. (5) The sharing arrangement must not pose a risk to beneficiary access, beneficiary freedom of choice, or quality of care. (6) The board or other governing body of the participant hospital must have responsibility for overseeing the participant hospital's participation in the CJR model, its arrangements with CJR collaborators, its payment of gainsharing payments, its receipt of alignment payments, and its use of beneficiary incentives in the CJR model. (7) The written agreement memorializing a sharing arrangement must specify the following: (i) The purpose and scope of the sharing arrangement. (ii) The obligations of the parties, including specified CJR activities and other services to be performed by the parties under the sharing arrangement. (iii) The date of the sharing arrangement. (iv) The financial or economic terms for payment, including the following: (A) Eligibility criteria for a gainsharing payment. (B) Eligibility criteria for an alignment payment. (C) Frequency of gainsharing or alignment payment. (D) Methodology and accounting formula for determining the amount of a gainsharing payment or alignment payment. (8) The sharing arrangement must not— (i) Induce the participant hospital, CJR collaborator, or any employees, contractors, or subcontractors of the participant hospital or CJR collaborator to reduce or limit medically necessary services to any Medicare beneficiary; or (ii) Restrict the ability of a CJR collaborator to make decisions in the best interests of its patients, including the selection of devices, supplies, and treatments. (c) Gainsharing payment, alignment payment, and internal cost savings conditions and restrictions. (i) Be derived solely from reconciliation payments, or internal cost savings, or both; (ii) Be distributed on an annual basis (not more than once per calendar year); (iii) Not be a loan, advance payment, or payment for referrals or other business; and (iv) Be clearly identified as a gainsharing payment at the time it is paid. (2)(i) To be eligible to receive a gainsharing payment, a CJR collaborator must meet quality of care criteria for the performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment. The quality of care criteria must be established by the participant hospital and directly related to the CJR episode. (ii) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a CJR collaborator other than ACO, PGP, NPPGP, or TGP must have directly furnished a billable item or service to a CJR beneficiary during a CJR episode that occurred in the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment or was assessed a repayment amount. (iii) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a CJR collaborator that is a PGP, NPPGP, or TGP must meet the following criteria: (A) The PGP, NPPGP, or TGP must have billed for an item or service that was rendered by one or more PGP member, NPPGP member, or TGP member respectively to a CJR beneficiary during a CJR episode that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment or was assessed a repayment amount. (B) The PGP, NPPGP, or TGP must have contributed to CJR activities and been clinically involved in the care of CJR beneficiaries 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 or was assessed a repayment amount. For example, a PGP, NPPGP, or TGP might have been clinically involved in the care of CJR beneficiaries by— ( 1 ( 2 ( 3 (iv) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a CJR collaborator that is an ACO must meet the following criteria: (A) The ACO must have had an ACO provider/supplier that directly furnished, or an ACO participant that billed for, an item or service that was rendered to a CJR beneficiary during a CJR episode that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment or was assessed a repayment amount; and (B) The ACO must have contributed to CJR activities and been clinically involved in the care of CJR beneficiaries during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment or was assessed the repayment amount. For example, an ACO might be have been clinically involved in the care of CJR beneficiaries by— ( 1 ( 2 ( 3 (3)(i) The methodology for accruing, calculating and verifying internal cost savings must be transparent, measurable, and verifiable in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book). (ii) The methodology used to calculate internal cost savings must reflect the actual, internal cost savings achieved by the participant hospital through the documented implementation of CJR activities identified by the participant hospital and must exclude— (A) Any savings realized by any individual or entity that is not the participant hospital; and (B) “Paper” savings from accounting conventions or past investment in fixed costs. (4) The total amount of a gainsharing payment for a performance year paid to a CJR collaborator must not exceed the following: (i) For episodes beginning on or after April 1, 2016 and ending on or before September 30, 2021, in the case of a CJR collaborator who is a physician or non-physician practitioner, 50 percent of the Medicare-approved amounts under the PFS for items and services furnished by that physician or non-physician practitioner to the participant hospital's CJR beneficiaries during CJR model episodes that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment being made. (ii) For episodes beginning on or after April 1, 2016 and ending on or before September 30, 2021, in the case of a CJR collaborator that is a PGP or NPPGP, 50 percent of the Medicare-approved amounts under the PFS for items and services billed by that PGP or NPPGP and furnished to the participant hospital's CJR beneficiaries by the PGP members or NPPGP members respectively during CJR model episodes that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment being made. (5) The amount of any gainsharing payments must be determined in accordance with a methodology that is substantially based on quality of care and the provision of CJR activities. The methodology may take into account the amount of such CJR activities provided by a CJR collaborator relative to other CJR collaborators. (6) For a performance year, the aggregate amount of all gainsharing payments that are derived from a reconciliation payment the CJR participant hospital receives from CMS must not exceed the amount of that reconciliation payment. (7) No entity or individual, whether a party to a sharing arrangement or not, may condition the opportunity to make or receive gainsharing payments or to make or receive alignment payments directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the participant hospital, any CJR collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a participant hospital, CJR collaborator, collaboration agent, or downstream collaboration agent. (8) A participant hospital must not make a gainsharing payment to a CJR collaborator if CMS has notified the participant hospital that such collaborator is subject to any action for noncompliance with this part or the fraud and abuse laws, or for the provision of substandard care to CJR beneficiaries or other integrity problems. (9) The sharing arrangement must require the participant hospital to recoup any gainsharing payment that contained funds derived from a CMS overpayment on a reconciliation report or was based on the submission of false or fraudulent data. (10) Alignment payments from a CJR collaborator to a participant hospital may be made at any interval that is agreed upon by both parties, and must not be— (i) Issued, distributed, or paid prior to the calculation by CMS of a repayment amount reflected in a reconciliation report; (ii) Loans, advance payments, or payments for referrals or other business; or (iii) Assessed by a participant hospital if it does not owe a repayment amount. (11) The participant hospital must not receive any amounts under a sharing arrangement from a CJR collaborator that are not alignment payments. (12) For a performance year, the aggregate amount of all alignment payments received by the participant hospital must not exceed 50 percent of the participant hospital's repayment amount. (13) The aggregate amount of all alignment payments from a CJR collaborator to the participant hospital may not be greater than— (i) With respect to a CJR collaborator other than an ACO, 25 percent of the participant hospital's repayment amount. (ii) With respect to a CJR collaborator that is an ACO, 50 percent of the participant hospital's repayment amount. (14) The amount of any alignment payments must be determined in accordance with a methodology that does not directly account for the volume or value of past or anticipated referrals or business otherwise generated by, between or among the participant hospital, any CJR collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a participant hospital, CJR collaborator, collaboration agent, or downstream collaboration agent. (15) All gainsharing payments and any alignment payments must be administered by the participant hospital in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book). (16) All gainsharing payments and alignment payments must be made by check, electronic funds transfer, or another traceable cash transaction. (d) Documentation requirements. (ii) Publicly post (and update on at least a quarterly basis) on a Web page on the CJR participant hospital's Web site— (A) Accurate current and historical lists of all CJR collaborators, including CJR collaborator names and addresses. (B) Written policies for selecting individuals and entities to be CJR collaborators required by § 510.500(a)(3). (iii) Maintain and require each CJR collaborator to maintain contemporaneous documentation with respect to the payment or receipt of any gainsharing payment or alignment payment that includes at a minimum: (A) Nature of the payment (gainsharing payment or alignment payment); (B) Identity of the parties making and receiving the payment; (C) Date of the payment; (D) Amount of the payment; (E) Date and amount of any recoupment of all or a portion of a CJR collaborator's gainsharing payment. (F) Explanation for each recoupment, such as whether the CJR collaborator received a gainsharing payment that contained funds derived from a CMS overpayment on a reconciliation report, or was based on the submission of false or fraudulent data. (2) The participant hospital must keep records of all of the following: (i) Its process for determining and verifying its potential and current CJR collaborators' eligibility to participate in Medicare. (ii) Its plan to track internal cost savings. (iii) Information on the accounting systems used to track internal cost savings. (iv) A description of current health information technology, including systems to track reconciliation payments and internal cost savings. (v) Its plan to track gainsharing payments and alignment payments. (3) The participant hospital must retain and provide access to, and must require each CJR collaborator to retain and provide access to, the required documentation in accordance with § 510.110. [82 FR 617, Jan. 3, 2017, as amended at 86 FR 23575, May 3, 2021] § 510.505 Distribution arrangements. (a) General. (2) All distribution arrangements must comply with the provisions of this section and all other applicable laws and regulations, including the fraud and abuse laws. (b) Requirements. (2) Participation in a distribution arrangement must be voluntary and without penalty for nonparticipation. (3) The distribution arrangement must require the collaboration agent to comply with all applicable laws and regulations. (4) The opportunity to make or receive a distribution payment must not be conditioned directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the participant hospital, any CJR collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a participant hospital, CJR collaborator, collaboration agent, or downstream collaboration agent. (5) The amount of any distribution payments from an ACO, from an NPPGP to an NPPGP member, or from a TGP to a TGP member must be determined in accordance with a methodology that is substantially based on quality of care and the provision of CJR activities and that may take into account the amount of such CJR activities provided by a collaboration agent relative to other collaboration agents. (6) The amount of any distribution payments from a PGP must be determined either in a manner that complies with § 411.352(g) of this chapter or in accordance with a methodology that is substantially based on quality of care and the provision of CJR activities and that may take into account the amount of such CJR activities provided by a collaboration agent relative to other collaboration agents. (7) Except for a distribution payment from a PGP to a PGP member that complies with § 411.352(g) of this chapter, a collaboration agent is eligible to receive a distribution payment only if the collaboration agent furnished or billed for an item or service rendered to a CJR beneficiary during a CJR episode that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment being distributed. (8) Except for a distribution payment from a PGP to a PGP member that complies with § 411.352(g) of this chapter, the total amount of distribution payments for a performance year paid to a collaboration agent must not exceed the following: (i) For episodes beginning on or after April 1, 2016 and ending on or before September 30, 2021, in the case of a collaboration agent that is a physician or non-physician practitioner, 50 percent of the total Medicare-approved amounts under the PFS for items and services furnished by the collaboration agent to the participant hospital's CJR beneficiaries during CJR model episodes that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment being distributed. (ii) For episodes beginning on or after April 1, 2016 and ending on or before September 30, 2021, in the case of a collaboration agent that is a PGP or NPPGP, 50 percent of the total Medicare-approved amounts under the PFS for items and services billed by that PGP or NPPGP for items and services furnished by PGP members or NPPGP member respectively to the participant hospital's CJR beneficiaries during CJR model episodes that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment being distributed. (9) With respect to the distribution of any gainsharing payment received by an ACO, PGP, NPPGP, or TGP, the total amount of all distribution payments must not exceed the amount of the gainsharing payment received by the CJR collaborator from the participant hospital. (10) All distribution payments must be made by check, electronic funds transfer, or another traceable cash transaction. (11) The collaboration agent must retain the ability to make decisions in the best interests of the patient, including the selection of devices, supplies, and treatments. (12) The distribution arrangement must not— (i) Induce the collaboration agent to reduce or limit medically necessary items and services to any Medicare beneficiary; or (ii) Reward the provision of items and services that are medically unnecessary. (13) The CJR collaborator must maintain contemporaneous documentation regarding distribution arrangements in accordance with § 510.110, including the following: (i) The relevant written agreements; (ii) The date and amount of any distribution payment(s); (iii) The identity of each collaboration agent that received a distribution payment; and (iv) A description of the methodology and accounting formula for determining the amount of any distribution payment. (14) The CJR collaborator may not enter into a distribution arrangement with any individual or entity that has a sharing arrangement with the same participant hospital. (15) The CJR collaborator must retain and provide access to, and must require collaboration agents to retain and provide access to, the required documentation in accordance with § 510.110. [82 FR 620, Jan. 3, 2017, as amended at 86 FR 23575, May 3, 2021] § 510.506 Downstream distribution arrangements. (a) General. (2) All downstream distribution arrangements must comply with the provisions of this section and all applicable laws and regulations, including the fraud and abuse laws. (b) Requirements. (2) Participation in a downstream distribution arrangement must be voluntary and without penalty for nonparticipation. (3) The downstream distribution arrangement must require the downstream collaboration agent to comply with all applicable laws and regulations. (4) The opportunity to make or receive a downstream distribution payment must not be conditioned directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the participant hospital, any CJR collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a participant hospital, CJR collaborator, collaboration agent, or downstream collaboration agent. (5) The amount of any downstream distribution payments from an NPPGP to an NPPGP member or from a TGP to a TGP member must be determined in accordance with a methodology that is substantially based on quality of care and the provision CJR activities and that may take into account the amount of such CJR activities provided by a downstream collaboration agent relative to other downstream collaboration agents. (6) The amount of any downstream distribution payments from a PGP must be determined either in a manner that complies with § 411.352(g) of this chapter or in accordance with a methodology that is substantially based on quality of care and the provision CJR activities and that may take into account the amount of such CJR activities provided by a downstream collaboration agent relative to other downstream collaboration agents. (7) Except for a downstream distribution payment from a PGP to a PGP member that complies with § 411.352(g) of this chapter, a downstream collaboration agent is eligible to receive a downstream distribution payment only if the downstream collaboration agent furnished an item or service by the downstream collaboration agent to a CJR beneficiary during a CJR episode that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment from which the ACO made the distribution payment to the PGP, NPPGP, or TGP that is an ACO participant. (8) Except for a downstream distribution payment from a PGP to a PGP member that complies with § 411.352(g) of this chapter, for episodes beginning on or after April 1, 2016 and ending on or before September 30, 2021 the total amount of downstream distribution payments for a performance year paid to a downstream collaboration agent who is a physician or non-physician practitioner and is either a member of a PGP or a member of an NPPGP must not exceed 50 percent of the total Medicare-approved amounts under the PFS for items and services furnished by the downstream collaboration agent to the participant hospital's CJR beneficiaries during a CJR model episode that occurred during the same performance year for which the participant hospital accrued the internal cost savings or earned the reconciliation payment that comprises the distribution payment being distributed. (9) The total amount of all downstream distribution payments made to downstream collaboration agents must not exceed the amount of the distribution payment received by the PGP, NPPGP, or TGP from the ACO. (10) All downstream distribution payments must be made by check, electronic funds transfer, or another traceable cash transaction. (11) The downstream collaboration agent must retain his or her ability to make decisions in the best interests of the patient, including the selection of devices, supplies, and treatments. (12) The downstream distribution arrangement must not— (i) Induce the downstream collaboration agent to reduce or limit medically necessary services to any Medicare beneficiary; or (ii) Reward the provision of items and services that are medically unnecessary. (13) The PGP, NPPGP, or TGP must maintain contemporaneous documentation regarding downstream distribution arrangements in accordance with § 510.110, including the following: (i) The relevant written agreements. (ii) The date and amount of any downstream distribution payment. (iii) The identity of each downstream collaboration agent that received a downstream distribution payment. (iv) A description of the methodology and accounting formula for determining the amount of any downstream distribution payment. (14) The PGP, NPPGP, or TGP may not enter into a downstream distribution arrangement with any PGP member, NPPGP member, or TGP member who has— (i) A sharing arrangement with a participant hospital. (ii) A distribution arrangement with the ACO that the PGP, NPPGP, or TGP is a participant in. (15) The PGP, NPPGP, or TGP must retain and provide access to, and must require downstream collaboration agents to retain and provide access to, the required documentation in accordance with § 510.110. [82 FR 621, Jan. 3, 2017, as amended at 86 FR 23575, May 3, 2021] § 510.510 Enforcement authority. (a) OIG authority. (b) Other authorities. § 510.515 Beneficiary incentives under the CJR model. (a) General. (1) The incentive must be provided directly by the participant hospital or by an agent of the hospital under the hospital's direction and control to the beneficiary during a CJR episode of care. (2) The item or service provided must be reasonably connected to medical care provided to a beneficiary during a CJR episode of care. (3) The item or service must be a preventive care item or service or an item or service that advances a clinical goal, as listed in paragraph (c) of this section, for a beneficiary in a CJR episode by engaging the beneficiary in better managing his or her own health. (4) The item or service must not be tied to the receipt of items or services outside the CJR episode of care. (5) The item or service must not be tied to the receipt of items or services from a particular provider or supplier. (6) The availability of the items or services must not be advertised or promoted except that a beneficiary may be made aware of the availability of the items or services at the time the beneficiary could reasonably benefit from them. (7) The cost of the items or services must not be shifted to another federal health care program, as defined at section 1128B(f) of the Act. (b) Technology provided to a CJR beneficiary. (1) Items or services involving technology provided to a beneficiary may not exceed $1,000 in retail value for any one beneficiary in any one CJR episode. (2) Items or services involving technology provided to a beneficiary must be the minimum necessary to advance a clinical goal, as listed in paragraph (c) of this section, for a beneficiary in a CJR episode. (3) Items of technology exceeding $100 in retail value must— (i) Remain the property of the CJR participant; and (ii) Be retrieved from the beneficiary at the end of the CJR episode. The participant hospital must document all retrieval attempts, including the ultimate date of retrieval. Documented, diligent, good faith attempts to retrieve items of technology will be deemed to meet the retrieval requirement. (c) Clinical goals of the CJR model. (1) Beneficiary adherence to drug regimens. (2) Beneficiary adherence to a care plan. (3) Reduction of readmissions and complications resulting from LEJR procedures. (4) Management of chronic diseases and conditions that may be affected by the LEJR procedure. (d) Documentation of beneficiary incentives. (2) The documentation must be established contemporaneously with the provision of the items and services and must include at least the following: (i) The date the incentive is provided. (ii) The identity of the beneficiary to whom the item or service was provided. (3) The documentation regarding items of technology exceeding $100 in retail value must also include contemporaneous documentation of any attempt to retrieve technology at the end of a CJR episode as described in paragraph (b)(3) of this section. (4) The CJR participant hospital must retain and provide access to the required documentation in accordance with § 510.110. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 621, Jan. 3, 2017] Subpart G—Waivers § 510.600 Waiver of direct supervision requirement for certain post-discharge home visits. (a) General. (b) General supervision of qualified personnel. (1) The home visit is furnished during the episode to a beneficiary who has been discharged from an anchor hospitalization or anchor procedure. (2) The home visit is furnished at the beneficiary's home or place of residence. (3) The beneficiary does not qualify for home health services under sections 1835(a) and 1814(a) of the Act at the time of any such home visit. (4) The visit is furnished by clinical staff under the general supervision of a physician or non-physician practitioner. Clinical staff are individuals who work under the supervision of a physician or other qualified health care professional, and who are allowed by law, regulation, and facility policy to perform or assist in the performance of a specific professional service, but do not individually report that professional service. (5) No more than 9 visits are furnished to the beneficiary during the episode. (c) Payment. (d) Other requirements. [80 FR 73540, Nov. 24, 2015, as amended at 86 FR 23575, May 3, 2021] § 510.605 Waiver of certain telehealth requirements. (a) Waiver of the geographic site requirements. (1) May be furnished via telehealth under existing requirements; and (2) Are included in the episode in accordance with § 510.200(b). (b) Waiver of the originating site requirements. (1) May be furnished via telehealth under existing requirements; and (2) Are included in the CJR episode in accordance with § 510.200(b). (c) Waiver of selected payment provisions. (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. (d) Other requirements. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 57104, Dec. 1, 2017] § 510.610 Waiver of SNF 3-day rule. (a) Waiver of the SNF 3-day rule Performance year Performance years 2 through 5. (ii) Performance years 6 through 8. (B) For episodes being tested in performance years 6 through 8 of the CJR model, CMS waives the SNF 3-day rule for coverage of a SNF stay within 30 days of the date of service of the anchor procedure for a beneficiary who is a CJR beneficiary on the date of service of the anchor procedure, but only if the SNF is identified on the applicable calendar quarter list of qualified SNFs at the time of the CJR beneficiary's admission to the SNF. (2) Determination of qualified SNFs. (3) Posting of qualified SNFs. (b) Financial liability for non-covered SNF services. (1) CMS makes no payment to a SNF for SNF services if the SNF admits a CJR beneficiary who has not had a qualifying inpatient stay or anchor procedure. (2) In the event that CMS makes no payment for SNF services furnished by a SNF as a result of paragraph (b)(1) of this section, the beneficiary protections specified in paragraph (b)(3) of this section apply, unless the participant hospital has provided the beneficiary with a discharge planning notice in accordance with § 510.405(b)(3). (3) If the participant hospital does not provide the beneficiary with a discharge planning notice in accordance with § 510.405(b)(3)— (i) The SNF must not charge the beneficiary for the expenses incurred for such services; (ii) The SNF must return to the beneficiary any monies collected for such services; and (iii) The participant hospital is financially liable for the expenses incurred for such services. (4) If the participant hospital provided a discharge planning notice to the beneficiary in accordance with § 510.405(b)(3), then normal SNF coverage requirements apply and the beneficiary may be financially liable for non-covered SNF services. (c) Other requirements. [82 FR 622, Jan. 3, 2017, as amended at 86 FR 23575, May 3, 2021] § 510.615 Waiver of certain post-operative billing restrictions. (a) Waiver to permit certain services to be billed separately during the 90-day post-operative global surgical period. (b) Services to which the waiver applies. (c) Other requirements. § 510.620 Waiver of deductible and coinsurance that otherwise apply to reconciliation payments or repayments. (a) Waiver of deductible and coinsurance. (b) Reconciliation payments or repayments. [80 FR 73540, Nov. 24, 2015, as amended at 82 FR 622, Jan. 3, 2017] Subparts H-J [Reserved] Subpart K—Model Termination § 510.900 Termination of the CJR model. CMS may terminate the CJR model for reasons including but not limited to the following: (a) CMS determines that it no longer has the funds to support the CJR model. (b) CMS terminates the model in accordance with section 1115A(b)(3)(B) of the Act. As provided by section 1115A(d)(2) of the Act, termination of the model is not subject to administrative or judicial review.

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