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Joint replacement bundles saved almost $1,000 per year

Overall, hospitals in the CJR model saw a 3.7% decrease in average episode payments for lower extremity joint replacements.

Jeff Lagasse, Associate Editor

The Comprehensive Care for Joint Replacement Model appears to be reducing average Medicare payments for hospitals at a greater rate compared to hospitals not taking part in the program, a new Lewin Group analysis shows.

Looking at data from April 2016 to December 2017, the data shows that hospitals participating in the program saw Medicare payments for care episodes dip by $997 more than their non-participating hospital counterparts.

Overall, hospitals in the CJR model saw a 3.7% decrease in average episode payments for lower extremity joint replacements. There were also decreases in episode payments for fractures and elective episodes.

WHAT'S THE IMPACT

The decrease in payments was due to shifts from more to less intensive post-acute care. CJR-participating hospitals discharged a somewhat smaller proportion of patients to an inpatient rehabilitation facility, and a relatively larger proportion of patients to a home health agency, at least compared to the control group hospitals.

The analysis also found that CJR patients with a stay in a skilled nursing facility spent fewer days in that facility than patients in the control group. These shifts in utilization resulted in statistically significant decreases in inpatient rehabilitation facility and skilled nursing facility payments, which drove the decrease in average episode payments.

Even though the CJR model resulted in a decrease in average episode payments, the authors estimate that, after accounting for the reconciliation payments to and repayments from participating hospitals, Medicare savings due to the model were in the vicinity of $17.4 million.

Quality among participating hospitals remained consistent. As they decreased episode costs, they maintained quality of care as measured by emergency department visits, unplanned readmission rate and mortality.

THE LARGER TREND

The Centers for Medicare and Medicaid Services, which administers the Medicare program, began experimenting with bundled payment models in the past couple of years in the hope of reducing healthcare cost inflation, boosting care quality, and lowering the sometimes extreme variability of both.

The CJR program is in a five-year trial due to end next year. Hospitals in the program are required to participate based on location in one of 67 selected urban markets. Participating hospitals receive normal Medicare reimbursements for hip and knee replacements, but later get a bonus if they beat CMS's quality and cost targets for the care delivered -- the full "bundle" of care including joint replacement surgery, associated hospitalization expenses, and post-discharge care for up to 90 days. If a hospital fails to meet cost and quality targets, it is on the hook to repay CMS to cover at least part of that gap.
 

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com