1. Driving Transformation for Comprehensive Care for Joint Replacement (CJR) Understand • Redesign • Align
Insert customer name

2. THE RAPID transition to value-based care
January 28, 2015
Health Care Transformation Taskforce (group of nation’s largest health systems and insurers) announces goal of shifting 75% revenue tied to alternative payment models
October 2013 to October 2015
Bundled Payment for Care Improvement cohorts went live
January 26, 2015
U.S. Department of Health and Human Services (HHS) sets goals and timeline for Medicare reimbursement shift from volume to value
July 9, 2015
CJR Announced: Mandatory Total Joint episode-based bundled payment model for DRGs 469 & 470
2020
Health Care Transformation Taskforce (75% adherence): CMS setting a trend and entire market is shifting
2009
Acute Care Episode (ACE) demonstration to test the use of a bundled payment for both hospital and physician services for a select set of inpatient episodes of care for orthopedic and cardiovascular procedures
VOLUNTARY
MANDATORY
2016
30% OF MEDICARE PAYMENTS TIED TO ALTERNATIVE PAYMENT MODELS (ACOS/BP)
November 16, 2015
CJR Announced: Final rule posted
Within the past 2 years there has been significant releases of communication to signal to the health care professionals that value based care was on the horizon and no longer just a concept. In fact, the government began to carry a stronger tone in the transition with launching the bundled Payment for care initiative pilot in While this initiative took awhile to get some legs in 2015 it took off and the private sector followed shortly there after with their response fro the HealthCare Transformation taskforce this January. From January until today we have seen more specific details and definitive metrics and guidance around how value based care is set up to evolve in the upcoming years. Which brings us to where were we are today. On July 9th CMS release the Comprehensive Care Joint replacement model. Which announced the mandatory joint episode based BP model. What you must convey on this slide is that the shift towards alternative payment models such as BP for the future is coming rapidly and aggressively as early as They must start making changes to prepare for this.
2018
50% OF MEDICARE PAYMENTS TIED TO ALTERNATIVE PAYMENT MODELS (ACOS/BP)

3. CJR OVERVIEW The Comprehensive Care for Joint Replacement Model
Mandatory bundled payment model for Total Joint Replacement and reattachment of the lower extremities (DRGs 469 & 470)
Separate Target Pricing for elective and Hip Fracture patient population
67 metropolitan statistical areas (MSA) / 800+ hospitals
Begins April 1, 2016 (5-year duration)
CMS-defined, required quality metrics
Target price based on blended hospital and regional spending
Retrospective annual reconciliation
Excludes episodes covered under an existing Bundled Payments for Care Improvement contract
Acute Care Hospital Stay and Post-Acute Care 90 Days Post-Discharge

4. Final cjr Participating MSAs

5. Optimizing the Orthopedic Value chain
Total Cost*
The Total Joint episode of care represents a significant opportunity to improve quality through reduced variation, resulting in decreased cost.
IP PAC
QUALITY
SNF
HHA
Average DRG Day Episode Cost
Readmission
Outpatient
Physician
Inpatient
Here’s a simple illustration of what is being asked of you for CCJR. Optimize the orthopedic value chain. Here’s a look at the total episode of care. This slide literally shows each touch point of care and the cost associated in each. The proportions are accurate. Most folks tend to only focus on inpatients costs. Here you can highlight the importance of that post acute piece and the price tag associated with it. The point here is most hospitals have been focused on just inpatient cost and care. Under CCJR they will not be pushed/challenged to have to look at the rest of the episode and it’s going to put them outside of their comfort zone.
Addressing this segment of the episode is going to be a new focus under CJR and potentially a challenge for Hospitals to manage
PAST
FOCUS
CJR FOCUS
* Cost to Medicare

6. Sample Hospital CJR Opportunity
Hospital A
Hospital B
Hospital C
Hospital D
Hospital E
Hospital F
Region
Benchmark
Please ensure all titles for this slide are set to ARIAL and not Calbria.
Note - Data includes 9 months of 2013 from the CMS Claims Files. The graph shows all claims data for DRG 470 that is reported under a given CMS ID. Region mappings by state are from CMS ( The Marshall | Steele DCOSP Benchmark represents the weighted average episode cost of all the facilities within the best performing quartile with DCOSP that were launched prior to The Top Quartile M|S DCOSP Benchmark Index Admission cost is set is equal to the National Average Index Admission cost to normalize for wage index differences. Facility and regional costs reflect actual claims paid and are not adjusted to remove the impact of wage index. Comparisons between facility, region and benchmark reflect differences in wage indices. Final target price for CJR will be based on episodes initiated 1/1/ /31/2014 and will reflect a blend of facility and wage index normalized regional costs.

7. The rising bar of CJR
HISTORICAL HOSPITAL PERFORMANCE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
HISTORICAL REGIONAL
PERFORMANCE
Risk Model
Upside potential
only
Upside only; Limited downside
Full upside and limited downside risk
Full upside and downside risk
Historical HOSPITAL Performance Weighting
66.6%
33.3% 0%
Historical REGIONAL Performance Weighting
100%
Range for Discount used for Repayment Amount Reconciliation; Determined by Composite Quality Score
N/A
0.5%–2%
1.5%–3%
Loss/Gain Cap
No loss
5% gain cap
5% loss cap
10% loss cap
10% gain cap
20% loss cap
20% gain cap
Here you will walk them through how the CCJR program is set up. Year one is all about comparing themselves to their won historical performance. However, there’s still an entrance to play in year one. They still must achieve the 30% quality metric threshold even if they beat their target price in year one to receive upside potential (readmissions/complications/HCAHPS). Years 2-5 you’ll point out that the risk begins to shift largest towards the performance of them vs. the Region. The bar will continue to rise for how they must improve.
Quality Composite score is based on Complications, HCAPS, and
PRO. If your quality is positive then you are able to gainshare. Your repayment will be less if you have high quality vs. low quality.
Enhanced limitation of downside risk in early years of program
CMS provides limited downside in the first two years— with no repayment requirement in year one
However, debt forgiveness in the first performance period covers approximately 6 months due to a shortened performance period (episodes that begin April 1 and end by December 31, 2016)

8. The rising bar of CJR
Hospitals will be pressured to improve their baseline episode performance to outpace the rest of their region
HISTORICAL HOSPITAL PERFORMANCE
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
HISTORICAL REGIONAL
PERFORMANCE
Regional markets will become increasingly competitive as bundled payment programs, including BPCI, continue to evolve and drive target prices down
Those who can’t compete we expect to see:
Joint programs marginalized
Consolidation
Unprofitability
This slide we are speaking heavily on who are they being compared to and what will happen to those who can’t make the improvements necessary to differentiate and compete.

9. CJR compliance Requirements
CMS may add 25% to a repayment amount on a participant hospital's reconciliation report if the participant hospital fails to timely comply with a corrective action plan or is noncompliant with the model's requirements.
General Program Compliance
Hospital compliance plan that includes CJR
Board level oversight of CJR
Written policies for selection of collaborators with established quality criteria
Hospital oversight of compliance with collaborators
Hospital Beneficiary Notification Compliance
Patient CJR education upon admission
Patient notification of PAC provider options
Collaborator Beneficiary Notification Requirements
1) CJR Physician:
Required to provide written notice of the structure of the CJR model and the existence of the sharing arrangement with the hospital at the time the decision for surgery is made
2) CJR PAC Provider/Supplier:
Required to provide written notice of the existence of the CJR sharing arrangement with the hospital at the time the beneficiary first receives services during the episode
Collaborator Compliance Plan
Collaborators must have their own compliance plan in place related to CJR
CMS may add 25 percent to a repayment amount on a participant hospital's reconciliation report if the participant hospital fails to timely comply with a corrective action plan or is noncompliant with the model's requirements.

10. CJR compliance Requirements
CMS may add 25% to a repayment amount on a participant hospital's reconciliation report if the participant hospital fails to timely comply with a corrective action plan or is noncompliant with the model's requirements.
General Program Compliance
Hospital Beneficiary Notification Compliance
Collaborator Beneficiary Notification Requirements
Collaborator Compliance Plan
CMS may add 25 percent to a repayment amount on a participant hospital's reconciliation report if the participant hospital fails to timely comply with a corrective action plan or is noncompliant with the model's requirements.
General Program Compliance
Hospital compliance plan that includes CJR
Board level oversight of CJR
Written policies for selection of collaborators with established quality criteria
Hospital oversight of compliance with collaborators
Hospital Beneficiary Notification Compliance
Patient CJR education upon admission
Patient notification of PAC provider options
Collaborator Beneficiary Notification Requirements
1) CJR Physician:
Required to provide written notice of the structure of the CJR model and the existence of the sharing arrangement with the hospital at the time the decision for surgery is made
2) CJR PAC Provider/Supplier:
Required to provide written notice of the existence of the CJR sharing arrangement with the hospital at the time the beneficiary first receives services during the episode
Collaborator Compliance Plan
Collaborators must have their own compliance plan in place related to CJR

11. CJR Critical success factors
Episode Data Collection and Analytics Understand where you are, where you need to focus and how your results are emerging
Understand Data
Care Redesign Implementation Episode-focused care redesign that improves quality care, reduces variation and decreases cost across the continuum
Provider Alignment Creating the right formal/informal agreements to drive provider alignment through impactful engagements that improve care and reduce cost under the bundle
TALK TRACK:
Success under CJR relies on 3 critical success factors: Understand, Redesign, and Align.
Understanding your Data ……..explain that, Redesign your care……explain that, and align your providers…….explain that.
What we find is that at any given time an organization is proficient at one or more of these but rarely are they able to coordinate success at all three simultaneously . To be successful you need a partner who can help you be successful at all of these.
Align Providers
Redesign Care

12. Your CJR success is what we were built to do:
Power of Partnership
Your CJR success is what we were built to do:
Performance Intelligence to help you understand, benchmark and make informed decisions
Implementation Programs to drive care redesign
Alignment Strategies
to align risk-based incentives
Understand Data
At SPS your success is what our business was built to do. Partnering with SPS will put you in a position to be successful at all 3 success factors. This offering isn’t a new offering for us. It hasn’t changed with the release of the new payment model by CCJR, it’s what our value proposition has always been. We deliver: PI, IP, AS. So let’s talk more about how we can help you do this.
Align Providers
Redesign Care

13. Comprehensive Episode management
PRE-HOSPITAL
INPATIENT
POST-ACUTE
Understand Data
CMS Claims Analysis
Patient-Reported Outcomes (PRO)
Hospital-Reported Outcomes (HRO)
Redesign Care
PRO
Coordinated System of Care
Align Providers
Medical Directorship
Gainsharing agreement
Co-management agreement
Clinically integrated network
Integration Models

14. CJR Critical success FACTORS: Understand YOUR data
Understand Data
We have the capability and expertise to...
Use your internal hospital data to measure historical, current and ongoing performance within your facility
Process your external CMS claims data to understand CJR program, opportunities, risks and impact
Capture patient reported outcomes (clinical and functional) and satisfaction to improve quality composite score
Validate your CMS data for accuracy and discrepancies
Analyze reconciliation data to inform gainsharing models
Let’s dig deeper into Understanding your data. Because we recognize most of you already have data. We have found collecting data has never been the issue. What we have the capability and expertise to do though is to…read bullet one and two. Then close with bottom sentence
Our Performance Intelligence solution is more than data collection, it’s your action plan for care transformation and provider alignment.

15. CJR Critical success FACTORS: Understand YOUR data
Understand Data
Internal Data Collection and Analytics Hospital Reported Outcomes
Dashboards that track and benchmark hospital performance
Patient clinical, functional and satisfaction outcomes
CJR composite quality score (complications and patient satisfaction)
Maximize key opportunities for CMS payments
Gainsharing metric reviews
Especially useful when gainsharing on internal cost savings, normally complicated and contentious calculations
Performance analyst quarterly data reviews
Review key metrics that impact internal costs and quality
Build/adjust care redesign program using expert data analysis
There are two key components to success with respect to your CCJR data. Understand your internal data and then also the external Claims data that will be coming to you from CMS. However, it’s more that just understanding our data, but rather using your data to drive changes within your current total episode or to build your care redesign plan for the future. Our hospital reported outcomes dashboards will all you to track/trend/benchmark your internal hospital performance.
Remember if you aren’t performing in year one on admissions/complications/ and satisfaction you will not get paid. So it’s imperatie that you are using HRO to understand where these opportunities lie.
You currently have internal data within HRO that should be being used to understand your opportunities today
CJR requires achievement of certain levels of performance in a composite quality score in order to receive any annual cost savings

16. CJR Critical success FACTORS: Understand YOUR data
Understand Data
External Claims Data Bundled Payment Analytics
Detailed financial and actuarial analysis on CMS claims data
Manipulate, validate and interpret your data for variation and opportunity assessment
Reconcile your CMS claims data to ensure you’re maximizing payment
Validate your target prices
Benchmark your performance vs. your history, your region and best practice
CJR dashboard and reporting
Volume and episode cost analysis
Post-acute analysis
Readmissions
Preliminary estimated NPRA
Gainsharing structuring and calculations
Use CMS claims and quality data to help you structure and drive your program
. Next your external Claims data.
We have experience with working w/ CMS claims data. We’re currently working with Clients through the CMS bundled payment pilot and we can tell you first hand if you don’t have experience in interpreting CMS claims data you’re going to be at a loss. We are able to…
CJR requires achievement of certain levels of performance in a composite quality score in order to receive any annual cost savings

17. CJR Critical success FACTORS: Understand YOUR data
Understand Data
Composite Quality Scoring
Your financial outcomes will be directly impacted by your quality performance
Each quality measure is weighted to impact the overall composite score
Total composite score determines:
Eligibility to receive positive Net Payment Reconciliation Amounts (NPRA)
Target price discount rate for reconciliation payment and repayment
Metric that they will most be able to impact will be Complications/PRO. HCAHPS is hospital wide and will be difficult for them to completely control/dictate. Weight of PRO is very small vs. Complications so there really needs to be a focus on Complications.
PRO: only weighted 10% but it is difficult to capture and you’ll need a system to collect. But it could be the difference between pushing them over the threshold.
Quality Measure
Weight Contributed to Composite Score
THA/TKA Complications
50%
HCAHPS
40%
PRO
10%

18. CJR Critical success FACTORS: Understand YOUR data
Understand Data
Composite Quality Score: Payment and Repayment
Performance Year
Composite Quality Score
Quality Category
Eligible for Reconciliation Payment
Eligible for Quality Incentive Payment
Discount for Reconciliation Payment
Discount for Repayment Amount 1
<4.0
Below Acceptable No
3.00%
Not applicable
≥4.0 and <6.0
Acceptable
Yes
≥6.0 and ≤13.2
Good
2.00%
>13.2
Excellent
1.50%
2-3
1.00%
0.50%
4-5
Progression over time increases your downside risk.
Quality hurdle for reconciliation eligibility: participant must have a hospital composite score of 4 or greater to qualify and receive positive NPRA

19. voluntary Patient Reported Outcomes
CJR Critical success FACTORS: Understand YOUR data
voluntary Patient Reported Outcomes
Understand Data
Final PRO Elements
Date of birth
Race
Ethnicity
Date of admission
Date of procedure
HIC#
Body mass index
Total painful joint count
Chronic narcotic use
Quantified spinal pain
SILS2 questionnaire
VR-12 OR PROMIS-Global
KOOS
HOOS
The percent of eligible procedures to be reported ramps up by performance year from 50% in year 1 to 80% in year 5
Reporting of PRO adds to the overall composite score which reduces the discount on target prices
Timing of collection for post-op data elements is between days

20. CJR Critical success FACTORS: redesign your care
Redesign Care
We have a dedicated clinical implementation team committed to…
Leveraging your episode data to redesign care to drive success under CJR.
Building alignment between the hospital, providers and staff.
Standardizing clinical protocols and care pathways.
Reducing variation to improve quality and patient satisfaction.
Care coordination across the entire continuum.
Streamlining post-acute utilization and optimization.
Next let’s look at redesigning your care. Start with text box at the bottom on this one.
Care Redesign solutions are everywhere but only an Implementation Program is going to help reduce variation and drive transformation in care delivery across your entire Total Joint episode.

21. CJR Critical success FACTORS: redesign your care
Redesign Care
Redesign Your Total Joint Episode Destination Centers of Superior Performance®
Redesign care across the Total Joint episode to:
Deliver care to differentiate your hospital from those in your region
Standardize care delivery process/protocols
Align/engage administration, staff and providers
Reduce cost drivers and improve quality metrics and patient satisfaction through outcomes management
Focus on post-acute utilization/efficiency to control episode spend and readmissions
Maximize CJR composite quality score to ensure gainsharing goals and success
Many are going to think that if they simply lower device costs or just focus on the quality metrics by CJR they will succeed. We are here to tell you that, that is a short term solution. If you aren’t implementing a program that will differentiate your care from your competition you’ll begin to be at risk in years You need to redesign care across the total joint episode to…

22. CJR Critical success FACTORS: redesign your care
Redesign Care
Comprehensive Episode Management What We Do:
. Added PRO
CJR beneficiary education
PAC education

23. CJR Critical success FACTORS: align your providers
Align Providers
We are able to help drive provider engagement that…
Fully complies with CJR compliance regulations
Fosters collaboration with select, proven-value providers (surgeons and post-acute providers)
Incentivizes providers to change practice patterns
Utilizes data and targets to drive fair and compliant gainsharing
Read blue box first and then go to bullets.
Care Coordination is critical, but designing an Alignment Strategy that incentivizes provider engagement will drive success under CJR.
NOTE: All gainsharing structures must be independently evaluated by the client and their legal counsel for compliance with legal and regulatory gainsharing requirements. Stryker Performance Solutions does not provide legal advice.

24. Collaborator Agreements
CJR Critical success FACTORS: align your providers
Align Providers
Collaborator Agreements
The content of the collaborator agreement outlined in the final rule resembles items that are required by CMS for BPCI in the form of an implementation protocol.
Likely elements include:
Information about planned care redesign and care coordination
A description of how success will be measured
Management and staffing information
Required to ensure that the collaborator is in good standing with Medicare and has a valid TIN or NPI
Collaborator must have a CJR compliance program
Methodology for accruing and calculating internal cost savings
Describe quality criteria for the collaborator
Note: Collaborator must meet hospital defined quality criteria in order to receive a gainsharing payment.

25. CJR Critical success FACTORS: align your providers
Align Providers
We help you design, implement and manage alignment structures through:
Strategic selection of provider partners
Gainsharing structures to maximize results for patients, providers, physicians and payors
Metrics and targets to incentivize episode-focused quality improvement and cost reduction
Internal cost saving calculations using Hospital Reported Outcomes
. The message is:
In our BPCI programs, we look for opportunities to align incentives so that physicians who meet their gainsharing metrics are driving meaningful change in episode quality and cost.
This is an example of 1 quarter of gainsharing results for two total joint surgeons at one of our live BPCI client hospitals.
The dark blue bar represents the amount of money that the physicians walked away with as for that quarter as a result of hitting their metrics; the light blue bar represents their gainsharing cap, or maximum amount of money they are legally allowed to receive under the BPCI program (150% of regular Medicare Part B fees)
As you can see these physicians maxed out their caps; Physician B walked about with almost $90K in one quarter of “free money” simply by participating in the program and meeting the quality metrics that our gainsharing structure had established. 
The surgeons are happy with this extra money to reward the work they do to drive episode savings and quality improvement, and the hospital is happy to pay them this money because the behavior changes that produced the savings drive even larger cost savings and quality improvement for them as the risk bearing entity under BPCI.
NOTE: All gainsharing structures must be independently evaluated by the client and their legal counsel for compliance with legal and regulatory gainsharing requirements. Stryker Performance Solutions does not provide legal advice in the development of a gainsharing structure. Data was taken from the Original Reconciliation of Quarter The results are for illustrative purposes only of what can be achieved. The results are not a guarantee of what will be realized. The physicians shown may have a different gainsharing arrangement than one being implemented. Physicians A and B met their capped limit.

26. Partnering with SPS empowers you to be successful in CJR
Power of Partnership
Partnering with SPS empowers you to be successful in CJR
Your CJR success is what we were built to do:
Performance Intelligence to help you understand, benchmark and make informed decisions
Implementation Programs to drive care redesign
Alignment Strategies
to align risk-based incentives
Understand Data
Let’s talk about the power of our partnership.
Align Providers
Redesign Care

27. Power of partnership: Bundled Payment episode cost reduction
Are you considering a partner who is…
Taking full downside risk in Bundled Payments for Care Improvement program exclusively for the Total Joint episode of care
Proven in Care Redesign solutions that help align providers and hospitals
Worked on over 30 bundles across 25 organizations, with a focus on Total Joint Bundles
Providing actionable dashboard information using internal data and also reconciling it with CMS claims data
Conducting CMS data audits and reporting discrepancy in results and corrections to NPRA reconciliations worth thousands of dollars
SPS Client Average DRG 470 Episode Cost Baseline vs. 2014
On average, our BP clients have reduced their episode cost by 10%*
The bar on the left shows the average total joint episode cost of our current live bpci clients prior to go-live (baseline data = , the timeframe upon which CMS bases their Target Price).
The bar on the right shows those same clients’ average total joint episode costs for 2014, after we had gotten them prepare for go-live. 
The delta of $2,577 is net new savings on their average episode which translates into positive NPRA under the BPCI program (money they get to keep and split with their surgeons).
Other interesting thing to note:
The majority of the savings between baseline and 2014 come out of Post-Acute utilization (the gray bars).
Baseline includes claims data from July 2009 through June includes the full year of claims data.
* In the first performance year

28. We’ve helped over 250 clients transform and redesign care
Power of Partnership
We’ve helped over 250 clients transform and redesign care
1 Year Post Launch
Joint Replacement
Before Launch
SPS 50th Percentile
SPS 75th Percentile
SPS 90th Percentile
Metric
Average
Result
Annual Impact
Annual Volume (First Year)
395
435 40
480 85
581
186
Reimbursement
$5.0 M
$8.2 M
$750,000
$9 M
$1.6 M
$10.9 M
$3.5 M
Length of Stay
3.25
2.95
$65,250
2.67
$139,200
2.47
$226,590
Discharge Home
67%
79%
$339,300
85%
$561,600
89%
$830,830
Complications
2.4%
1.6%
-0.8%
0.6%
-1.8%
0.5%
-1.9%
Readmissions
2.7%
-0.3%
1.7%
-1.0%
1.2%
-1.5%
Blood Transfusion
20%
13%
$26,970 8%
$56,640 4%
$90,636
Patient Satisfaction
N/A
97%
98%
100%
Denotes CJR quality composite score metrics: complications and patient satisfaction
Example provided for illustration purposes only and should not be construed as a guarantee of future results

29. Our database contains over 400K patient records from over 250 clients
Power of Partnership
Our database contains over 400K patient records from over 250 clients
Denotes CJR quality metrics: complications, readmissions and patient satisfaction

30. Why sps? Specialist, not Generalist
Comprehensive approach with Data Analytics, Care Redesign and Provider Alignment
Proven Care Redesign solutions, since 2005 (250+ implemented programs nationwide)
Experience with all CMS Bundled Payment programs
Experts in risk-based payment programs with proven results
Our orthopedic registry includes 250+ hospitals with 500,000 patient records and 1,500 surgeons
We have helped our clients reduce their episode cost by 10% on average
CMS claims data analytics, reconciliation, and discrepancy reporting
A dedicated team assigned to you that includes:
CJR Project Manager
Data Performance Analyst
Care Redesign Program Manager (RN/PT)
Shared Risk agreements plan options
Experienced implementation team of Orthopedic Surgeons, Administrators, Actuaries, Financial/Data Analysts, Clinical Managers, Lawyers

31. the Rapid transition toward value-based care
CURRENT STATE (VOLUME-BASED)
FUTURE STATE (VALUE-BASED)
You have an opportunity
Understand Data
Redesign Care
Align Providers
Stryker Performance Solutions is the CJR partner to help you succeed
Implementation Programs
Performance Intelligence
Alignment Strategies

32. This is what you need to do: Understand Redesign Align
Power of partnership
This is what you need to do:
Understand Redesign Align
This is what we are built to do:
Understand Data
Redesign Care
Align Providers
Performance Intelligence to help you understand, benchmark and make informed decisions
Implementation Programs to drive care redesign
Alignment Strategies
to align risk-based incentives
Alternative Ending Slide

33. Questions? The Power of Partnership
Your cjr partner

34. Save the date 9th Annual Orthopedic and Spine Summit:
Optimizing Patient Care throughout the Continuum
Reducing Variation within the Joint Replacement Episode to Drive Care Transformation (Including Outpatient Joint Care)
Developing a Standardized Process for Geriatric Fracture Care
Navigating the Care Pathway for the Spine Patient
Achieving Operational Excellence through Surgical Service Optimization
Using Data to Understand, Build and Maintain Care Pathways
Keeping Physicians & Practice Models Relevant, Profitable and Efficient
Physician and Hospital Executive Leadership Course
Preparing for Fundamental Payment Reform
Improving Quality and Cost through Value Based Contracts
Medicare’s Comprehensive Care for Joint Replacement (CJR) Is it in Everyone’s Future?
Engaging Physicians to Drive Patient Centric Change Under CJR and Bundled Payment for Care Improvement (BPCI) Initiative
Gainsharing Metric Development Workshop

35. CCJR vs. CJR

36. PROPOSED CJR VS. FINAL CJR
Proposed Comprehensive Care for Joint Replacement (CJR)
FINAL Comprehensive Care for Joint Replacement (CJR)
Participation Type
Mandatory for all Acute Care Hospitals in 75 MSAs; 90 day post-discharge duration only.
Mandatory for all Acute Care Hospitals in 67 MSAs; 90 day post-discharge duration only.
Quality Metrics
Fixed Metrics (hospital) - Minimum thresholds must be achieved for Complication Rate, Readmission Rate, & HCAHPS to receive NPRA.
Fixed Metrics (hospital) – a composite score for Complication Rate, HCAHPS & PRO that provides financial incentive for performance and improvement. Hospital chooses quality metric(s) for collaborator gainsharing.
Basis for Target Price
Blended hospital-specific and regional spending with increasing emphasis on regional spending, from rolling 3 year baselines. Prospectively developed trend factors.
Blended hospital-specific and regional spending with increasing emphasis on regional spending, from rolling 3 year baselines. Prospectively developed trend factors. Now includes risk stratification for hip fracture.
Target Price Discount
Discount 2% of target price reduced by 0.3% if entity complies with voluntary reporting
Discount 1.5 to 3% of target price based on achievement with quality metrics. Discounts for the purpose of deficit calculations
are reduced by 1% in year 2.
Positive & Negative NPRA Caps & Exclusions
Same as BPCI. Hospital cannot receive more than 20% of the target price. Maximum savings achieved by entity set at 20% of the target price. Physician and non-physician gainsharing capped at 50% of their fees.
Upside and downside caps scaled by year increasing from 5% in year 1 (no downside risk in year 1), 10% in years 2-3,and 20% in years 4-5 of the target price. Physician and non-physician gainsharing capped at 50% of their fees.
Stop-Loss Limit
Awardee cannot lose more than 20% of dollars at risk (target price times the number of episodes)
Maximum deficits charged to entity set at 0 for year 1. Scaled by year increasing from 5% in year 2, 10% in year 3, and 20% in years 4-5 of the target price
Readmissions Inclusions/Exclusions
Exceptions for specific exclusions around Trauma/Oncology
Unclear how much it differs from BPCI. Includes hospice services, which are excluded under BPCI.
Compliance
Very few compliance requirements
Significant complex compliance requirements
This new proposal does not affect the ongoing Bundled Payment for Care Improvement (BPCI) pilot upon which it is modeled. For those organizations currently enrolled in BPCI, the program will continue to operate under its existing parameters for the full three year contracts unless CMS issues specific rule changes that indicate otherwise.

37. SPS Offering

38. CJR Portfolio Offering
Opportunity Assessment
Episode Analytics
Episode Management
Episode Cost Analysis
Analysis of 100% claims data, prior to CMS data release
Volume and episode financial impact vs. benchmarks
Readmit rates, post acute variability and outliers 
Service Line Assessment
On-site interviews, observation and data analysis vs. benchmarks
Care Continuum Delivery Model gap assessment and best practices
Care redesign readiness, recommendations and priorities
CJR Analytics and Support
Intake, validation, manipulation and storage of CMS quarterly claims data
Target price verification, reconciliation analysis and estimated NPRA
Gainsharing structure, metrics and calculation support
Dedicated CJR Program Manager to drive care management process
CJR Education and Implementation Toolkit
Joint Replacement Care Redesign
Implementation of Marshall Steele Destination Center for Total Joint
Standardized care delivery process and clinical protocols
Post-acute utilization and efficiency to reduce spend and readmissions
Hospital & Patient Reported Outcomes quarterly review process
CCJR Implementation Toolkits
Stryker provides self-help toolkits to help educate staff on CCJR and assist in complying with program requirements, including:
Educational materials, templates and tools to help implement the requirements of the CCJR program, including:
Patient Notification Requirement
tools explaining the notification requirements to Customer staff and to physicians
examples of methods used by other hospitals to satisfy these requirements
Beneficiary protections – review of beneficiary protections under CCJR
Gainsharing parameters - clarification of gainsharing requirements
Program Waivers – available waivers and hot to apply
Quality Metrics definition and measurement (required and voluntary)
CCJR Training Toolkit including:
Basic CCJR Education Materials (suitable for Leadership, Physicians, and Staff)
CCJR Exclusion Logic and Rules
How CCJR, BPCI and ACOs Work Together
Mock Reconciliation Explanation and Walk-through

39. Opportunity assessment
Episode Cost Analysis
Analysis of 100% claims data, prior to CMS data release
Volume and episode financial impact vs. benchmarks
Readmit rates, post acute variability and outliers
Service Line Assessment
On-site interviews, observation and data analysis vs. benchmarks
Care Continuum Delivery Model gap assessment and best practices
Care redesign readiness, recommendations and priorities

40. Episode Analytics Episode Cost Analysis Service Line Assessment
Analysis of 100% claims data, prior to CMS data release
Volume and episode financial impact vs. benchmarks
Readmit rates, post acute variability and outliers
Service Line Assessment
On-site interviews, observation and data analysis vs. benchmarks
Care Continuum Delivery Model gap assessment and best practices
Care redesign readiness, recommendations and priorities
CJR Analytics and Support
Intake, validation, manipulation and storage of CMS quarterly claims data
Target price verification, reconciliation analysis and estimated NPRA
Gainsharing structure, metrics and calculation support
Dedicated CJR Program Manager to drive care management process

41. Episode Analytics CJR Education and Implementation Toolkit
Patient notification requirements
Beneficiary protections – review of beneficiary protections under CJR
Gainsharing parameters - clarification of gainsharing requirements,
Collaborator Agreement Guide
Program Waivers
Quality Metrics definition and measurement
Basic CJR Education Materials (suitable for Leadership, Physicians, and Staff)
CJR Exclusion Logic and Rules
How CJR, BPCI and ACOs Work Together
Mock Reconciliation Explanation and Walk-through
Facilitate Hospital Data Request per CMS requirements
Compliance Requirements/Plans for gainsharers and hospitals

42. Episode management Episode Cost Analysis Service Line Assessment
Analysis of 100% claims data, prior to CMS data release
Volume and episode financial impact vs. benchmarks
Readmit rates, post acute variability and outliers
Service Line Assessment
On-site interviews, observation and data analysis vs. benchmarks
Care Continuum Delivery Model gap assessment and best practices
Care redesign readiness, recommendations and priorities
CJR Analytics and Support
Intake, validation, manipulation and storage of CMS quarterly claims data
Target price verification, reconciliation analysis and estimated NPRA
Gainsharing structure, metrics and calculation support
Dedicated CJR Program Manager to drive care management process
CJR Education and Implementation Toolkit
Joint Replacement Care Redesign
Implementation of Marshall Steele Destination Center for Total Joint
Standardized care delivery process and clinical protocols
Post-acute utilization and efficiency to reduce spend and readmissions
Hospital & Patient Reported Outcomes quarterly review process

43. Episode management Implementation Tool Kit Delivered with Education
Patient notification requirements
Beneficiary protections – review of beneficiary protections under CJR
Gainsharing parameters - clarification of gainsharing requirements,
Collaborator Agreement Guide
Program Waivers
Quality Metrics definition and measurement
Basic CJR Education Materials (suitable for Leadership, Physicians, and Staff)
CJR Exclusion Logic and Rules
How CJR, BPCI and ACOs Work Together
Mock Reconciliation Explanation and Walk-through
Facilitate Hospital Data Request per CMS requirements
Compliance Requirements/Plans for gainsharers and hospitals

44. Data analytics details

45. CJR DATA ANALYTICS Timeline
OCT
NOV
DEC
2016
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEPT
2017
Episode Cost Opportunity Analysis
Target Price Analysis with Detailed Baseline Financial Analysis
Ongoing Quarterly Reporting and Analysis
Annual Reconciliation Analysis *
* Pending CMS data delivery timeline and content

46. episode cost opportunity analysis
Our CJR Episode Cost Analysis is a financial and actuarial analysis of the potential financial opportunity
Development of estimated target prices and potential financial opportunity relative to benchmarks
Analysis of key metrics across facility, system (if applicable), region and benchmarks:
Average episode costs by type of service
90 day readmission rates
Assessment of high cost outlier cases
Volumes
Stryker Performance Solutions will provide the information your organization needs to understand the opportunities, risks and potential financial impact of CJR

47. Target Price analysis with detailed baseline financial analysis
Our detailed analysis validates the target prices set by CMS and identifies areas of opportunity and focus
Volumes and Mix by DRG and hip fracture status in baseline and trends over time
Verification of target prices
Including blended facility and regional costs, hip fracture stratification, national trends factors, proration, discount and other CJR specifications
Episode cost trends by year comparing facility, system and region
Post acute usage trends
Drivers of cost (type of service, LOS, provider)
Top providers by type of claim (SNF, HH, IRF)
Usage and mix by category
Financial opportunity
Reflecting most recent actual average episode costs, baseline target prices and benchmarking comparisons
Comparison to best practice and national benchmarks
Readmission trends to drill into types of readmissions, frequency and leakage
Outlier impact to determine magnitude of cases above thresholds by DRG and hip fracture status
be aware that the financial opportunity relative to recent actual average episode costs may be based on the baseline as the recent actuals if we don’t get quarterly claims files early on.
Stryker Performance Solutions will validate the target prices and provide recommendations for next steps under CJR

48. Ongoing quarterly reporting and analysis
Our Quarterly Reporting and Analysis monitors results relative to expectations
Episode cost analysis
Relative to target prices, baseline and trends over time
Cost trends by year comparing facility, region and national costs
Analysis of cost variation by first site of service post discharge
Post acute analysis relative to baseline and trends
Drivers of cost (by type of service, LOS, provider)
Usage rates and mix of services
Readmission analysis relative to baseline and trends
Frequency, location and type of readmission
Outlier impact analysis
Volume analysis by DRG and hip fracture status and mix changes over time
Stryker Performance Solutions will provide actionable information to compare emerging results to expectations and drivers of variance

49. Annual reconciliation analysis
Our Reconciliation Analysis verifies CMS results, identifies drivers and determines gainsharing allocations
Review of results
Review of results relative to quarterly reporting and internal documentation
Validation of results relative to CMS detailed files
Training on optional internal audit process to validate episode volumes and support discrepancy reporting to CMS
Analysis
By DRG and hip fracture status and episode initiator
Operating physician comparison
Post acute usage analysis
Gainsharing
Financial modeling of results
Summary of distribution by gainsharing entity
Stryker Performance Solutions will provide analysis of reconciliation results and gainsharing distributions

50. Sample Bundled payment analytics reports

51. Hospital Q2 2014-Q1 2015 Average Episode Cost and Volume by Physician
EXAMPLE ONLY
All physicians should look to reduce IP PAC costs when clinically appropriate. Hospitals’ IP PAC costs and utilization for Total Joint Replacements of the Lower Extremity are unusually high compared to what is seen around the rest of the country.
Average costs are untrimmed for outliers. During actual reconciliations episodes will be trimmed at 2 standard deviations above the regional mean.

52. DRG 470 Episode cost by First site of service (w/o hip fractures)
EXAMPLE ONLY
Patients discharged home or with home health have far lower episode costs than SNF and IP PAC discharges.

53. DRG 470 distribution by First Site of Service (w/o hip fractures)
EXAMPLE ONLY
Distribution by discharge disposition has not changed much since the baseline although overall post acute care costs per episode have increased dramatically. Opportunities exist to reduce the use of IP PAC and reevaluate the HHAs and SNFs to which patients are discharged.

54. 2014 DRG 470 Average SNF Cost by Provider (w/o hip fractures)
EXAMPLE ONLY
The majority of episodes discharged to SNFs are going to SNF C and SNF H; however, average costs at SNF C exceed average costs at SNF H by $7,000
Costs reflect average episode cost for SNF services on episodes that have those services; costs are not trimmed for outliers
Providers listed reflect the top 75% of the total volumes of SNF providers

55. 90 Day Readmission Rates—DRG 470 (w/o hip fractures)
EXAMPLE ONLY
Hospital A
Hospital B
In Q4 2014, readmission rates are down from the baseline at both hospitals
Readmits represent 90 day readmits to any facility for DRGs that are considered related for the BPCI family according to CMS methodology; some DRGs are excluded
Readmit rates and counts reflect patients who are readmitted during an episode of care, not the number of times they are readmitted

56. Opportunity Assessment
CJR Portfolio Pricing
Opportunity Assessment
Episode Analytics
Episode Management
Episode Cost Analysis
10,000
One-time 
Service Line Assessment
15,000
CJR Analytics and Support
70,000
Annual
Joint Replacement Care Redesign
180,000
Hospital Reported Outcomes
36,000
25,000
95,000
275,000
Package
Year 1
20,000
225,000
Year 2+ -
80,000
3 Years
210,000
385,000
Deal Structure Options
Net Positive Reconciliation Amount (NPRA) Risk 
Internal Cost Savings (ICS) Risk
Monthly Pmt. - 3 Yr. Commitment
Pricing may need to change based on increased project management requirements
FOR INTERNAL USE ONLY
Confidential – Internal Use Only

57. Confidential – Internal Use Only
CJR Risk Options
Net Positive Reconciliation Amount (NPRA) Risk (illustrative)
NPRA
SPS
Estimated NPRA Savings
1,000,000
SPS Gain Share Opportunity – 20%
200,000
Quarterly GS estimate – 50% of SPS opportunity
25,000 / 100,000
Quarterly GS True-up – 50% of SPS opportunity
Accounts must be pre-qualified utilizing episode opportunity analysis
Annual orders credit at minimum with quarterly adjustments based on CMS reconciliation
Internal Cost Savings (ICS) Risk (illustrative)
HRO metric(s) based on benchmarks
Balanced upside/downside performance payout
Metrics: Volume, LOS, Discharge Home, Readmission, Complications
Typical Payout Tiers: 80 to 120, 70 to 130, 50 to 150
Account qualification based on Opportunity Assessment aggregate HRO baseline
Annual orders credit at 100% payout with annual reconciliation adjustment
FOR INTERNAL USE ONLY
Confidential – Internal Use Only