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Medicare Bundled-Payment Model Cuts Joint Replacement Costs

January 02, 2019 / Marcia Frellick

A Medicare bundled-payment model for hip and knee replacements showed modest savings on individual episodes without increased complication rates at 2 years. The savings mostly came from reductions in the percentage of patients discharged to post-acute care.

The national program, started in 2016, is known as the Comprehensive Care for Joint Replacement (CJR), a mandatory bundled-payment model for hip or knee replacements in randomly chosen metropolitan treatment areas.

The study, which was conducted by Michael L. Barnett, MD, from the Department of Health Policy and Management at Harvard T. H. Chan School of Public Health in Boston, Massachusetts, and colleagues, was published online  January 2 in the New England Journal of Medicine.

The investigators compared Medicare claims in 75 treatment regions from 2015 to 2017 (the first 2 years of bundled payments in the CJR program) with claims in 121 control areas before and after implementation of CJR. There were 280,161 hip or knee replacements in 803 hospitals in treatment areas and 377,278 procedures in 962 hospitals in control areas.

After implementing the CJR model, there were greater decreases in spending per joint replacement episode in treatment areas than in control areas.

Institutional spending on episodes decreased from $25,903 to $23,915 in the treatment areas and from $24,596 to $23,238 in the control areas (adjusted differential change between the treatment group and the control group, −$812; < .001), or a 3.1% differential decrease relative to average spending in treatment areas before CJR started.

The researchers defined episodes as the hospitalization plus 90 days after discharge. They adjusted the analyses for differences in procedures and hospital and patient characteristics.

The greater decreases in spending were largely a result of a 5.9% relative decrease in the percentage of episodes in which patients were discharged to post-acute care facilities, the authors note. “[I]t appears that hospitals may have successfully identified patients who are at the margin of needing post-acute care services who could instead be safely discharged home with home health services,” the researchers explain.

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Chris J. Stewart

Chris currently serves as Chief Operating Officer at Ortho Spine Partners. Prior to that, he was the assistant vice president and business unit leader of Medical Device Management for HealthTrust.

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