Bundled Payments for Joint Replacement

By January 22, 2019 Commentary

In 2016 CMS started the Comprehensive Care for Joint Replacement bundled payment program.  Participation was mandatory in certain metropolitan areas and the hospitals in those areas got bonuses or incurred penalties based on spending during a 90 day episode for a knee or hip replacement.  Research carried in the New England Journal of Medicine has an evaluation of the results for the first two years of the program.   (NEJM Article)   The researchers looked at claims from 2015 to 2017 and compared experience with joint replacement in the mandated areas versus non-mandated control geographies, before and after the program started.  In addition to total and category spending they also looked at quality indicators.  The analysis, as usual, was adjusted for a variety of patient and other factors to strengthen the quality of the results.

Institutional spending was a primary outcome, because about 85% of spending in an episode is for hospital, nursing home and other institutional care.  There were over 280,000 joint replacements in 803 hospitals in the mandatory participation areas and over 377,000 in 962 hospitals in the control geographies.  Institutional spending per episode decreased in both sets of areas compared to spending prior to implementation of the CCJR program, but decreased slightly more in the ultimate intervention geographies, and was showing a greater rate of decrease toward the end of the analysis period.  Most of the decline occurred in skilled nursing facility care.  After accounting for payments related to performance under the program, Medicare had less than a 1% decrease in spending per episode.  The was no significant differential change in volume of knee or hip replacements across the participating and non-participating geographies.  There was no meaningful difference in quality related outcomes, like complications or mortality.  Overall, this early analysis suggests that forcing use of bundled payments had no negative effects and over time, could lead to at least some reduction in Medicare spending.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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