Hospitals that are participating in Medicare’s mandatory bundled payment model for hip and knee replacements reported a decrease in spending per episode of $812 compared with control hospitals not participating in the Comprehensive Care for Joint Replacement (CJR) program.
Medicare’s Comprehensive Care for Joint Replacement (CJR) mandatory bundled payment model has been in place for 2 years, during which spending has decreased moderately and the rate of complications has stayed the same, according to a new analysis.
The study, published in New England Journal of Medicine, evaluated hip- or knee-replacement episodes from 2015 to 2017 to understand spending per episode, rates of postsurgical complications, and the percentage of “high-risk” patients.
"Interest in bundled payments has exploded the past few years," Michael Barnett, one of the lead authors on the study and assistant professor of health policy and management at Harvard Chan School, said in a statement. "The big question has always been whether this new model can lead hospitals to meaningfully reduce spending without harming patients. This study indicates that, with the right financial incentive, hospitals can save money without compromising quality by sending more patients home rather than to a nursing facility."
The study compared 803 hospitals in 75 metropolitan statistical areas required to participate in CJR with 962 hospitals in 121 control areas. Under CJR, hospitals in areas selected for mandatory participation would receive bonuses or penalties depending on how much they spent on follow-up care after patients receiving hip- or knee-replacements were discharged.
There was a total of 280,161 joint replacements in CJR hospitals and 377,278 procedures in control hospitals. The authors found that spending per joint-replacement episode in hospitals participating in CJR decreased $812 (—3.1%) after the model was implemented compared with spending in control areas.
The authors noted that during the 18-month period, the decrease in payments grew, “which raises the possibility that CJR could lead to greater reductions in payments as hospitals adapt to the new payment model.”
At the same time, there was not an increase in complications, readmissions, or death in hospitals participating in CJR, leading the authors to believe that CJR hospitals may have been able to identify high-risk patients and patients who can safely be discharged home.
The continuing impact of CJR is uncertain, as the Trump administration transitioned the program to a partly voluntary model in March 2018.
“Although the future of mandatory payment models is uncertain, the CJR program helps address the question of whether savings seen in previous evaluations of bundled-payment programs were attributable to the select nature of the hospitals that volunteered,” the authors wrote. “Our findings suggest that the changes observed in voluntary programs may be echoed in mandatory programs.”
Barnett ML, Wilcock A, McWilliams JM, et al. Two-year evaluation of mandatory bundled payments for joint replacement. [published online January 2, 2019]. N Engl J Med, 2019; doi: 10.1056/NEJMsa1809010.