In an attempt to reduce the rate and cost of complications following hip and knee replacements among Medicare beneficiaries, the Centers for Medicare & Medicaid Services (CMS) announced a new Comprehensive Care for Joint Replacement payment model. With this new measure, the CMS proposes to hold hospitals accountable for the quality of care they deliver to Medicare fee-for-service beneficiaries for hip and knee replacements from surgery through recovery.
“We are committed to changing our health care system to pay for quality over quantity, so that we spend our dollars more wisely and improve care for patients,” said Sylvia M. Burwell, Secretary of Health and Human Services.
Sylvia M. Burwell
Through the proposed 5-year payment model, health care providers in 75 geographic areas would continue to be paid under existing Medicare payment systems. However, the hospital where the hip or knee replacement is performed would be held liable for the quality and costs of care for the duration of care, from the time of the surgery through 90 days after discharge.
Depending on the hospital’s quality and cost performance during the episode, the hospital may receive an additional payment or be required to repay Medicare for a portion of the episode costs. As a result, hospitals would have an incentive to work with physicians, home health agencies, and nursing facilities to ensure that beneficiaries receive the coordinated care they need, with the goal of reducing avoidable hospitalizations and complications. Hospitals would receive tools, such as spending and utilization data and sharing of best practices, to improve the effectiveness of care coordination.
These bundled payments for joint replacement surgeries would build upon successful demonstration programs already underway in Medicare. This model is also consistent with the private sector, where major employers and leading providers and care systems are moving towards bundled payments for orthopedic services.
“Today, we are taking another important step to improve the quality of care for the hundreds of thousands of Americans who have hip and knee replacements through Medicare every year. By focusing on episodes of care, rather than a piecemeal system, hospitals and physicians have an incentive to work together to deliver more effective and efficient care. This model will incentivize providing patients with the right care the first time and finding better ways to help them recover successfully. It will reward providers and doctors for helping patients get and stay healthy, ” stated Ms. Burwell.