Beginning  April 1st, ~800 hospitals are being held accountable for the quality and total cost (all Medicare FFS Part A and B costs of care during the hospital stay as well as Medicare costs for 90 days post hospital discharge) of care provided to Medicare fee-for-service beneficiaries for lower extremity joint replacement (LEJR) procedures (MS-DRG 469 and 470).  



  • Retrospective, two-sided risk model with hospitals bearing financial responsibility
  • CMS will establish a target price for each participant hospital based on blend of hospital-specific and regional episode data
  • CMS will make reconciliation payments to hospitals that achieve quality outcomes and cost efficiencies (relative to target prices).
    • CMS assigns an individual Quality Performance Score for each participant hospital based on the hospital’s performance percentile relative to the national distribution 
    • Hospitals must meet minimum threshold on 3 quality metrics to be eligible for reconciliation payments


Composite Quality Score

Key score component and weights:

A hospital’s quality composite score impacts their payment in two ways:

  • Hospitals with a “below acceptable,” overall composite score are ineligible to receive reconciliation payments 
  • CMS will apply an automatic discount to the target cost of care.  Hospitals with excellent quality composite scores can reduce their effective discount percent to 1.5%; hospitals with poor scores will see their discount percent increased to 3%.


Out of the 20 total Composite Score points, hospitals can earn 2 bonus points or 10% of their score by submitting required Patient Reported Outcomes (PRO) and selected pre- and post-operative data elements initially for 50% or 50 total eligible patients (increases to 80% in the final performance period).



The first performance period in 2016 is a 2 month window between July 1, 2016 and August 31, 2016 where pre-operative baseline PRO collection is required on 50% or 50 total eligible patients.



OM1, formerly Better Outcomes, provides the first enterprise-level patient-reported and clinical outcomes solution that: 

  • Automates PRO collection with a mobile first/consumer engaging approach
  • Generates robust and valid  condition scores for the hospital, provider and the patient
  • Works standalone or fully integrated with major EMRs
  • Provides predictive capabilities that will lower risk and improve financial performance under CJR

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