The Centers for Medicare and Medicaid Services is proposing a Comprehensive Care for Joint Replacement (CCJR) payment model, to begin in January 2016, that aims 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.
Hip and knee replacements are some of the most common surgeries that Medicare beneficiaries receive. In 2013, there were more than 400,000 inpatient primary procedures, costing more than $7 billion for hospitalization alone.
The quality and cost of care for these hip and knee replacement surgeries vary greatly, despite the existence of incentives for hospitals to avoid post-surgery complications that can result in pain, readmissions to the hospital, or lengthy rehabilitative care.
For example, the rate of complications such as infections or implant failures after surgery can be more than three times higher at some facilities than others, increasing the chances that the patient may be readmitted to the hospital. And the average Medicare expenditure for surgery, hospitalization, and recovery ranges from $16,500 to $33,000 across geographic areas.
Health and Human Services Secretary Sylvia M. Burwell says the CMS proposal furthers the administration’s commitment to transform the country’s health system to deliver better quality care and spend health care dollars in a smarter way.
“We are committed to changing our health care system to pay for quality over quantity,” Burwell has said. “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.”
CMS says the initiative will offer incentive for hospitals and doctors to provide patients with the right care the first time and find better ways to help them recover successfully. Put simply, it will reward them with additional payment for helping patients get and stay healthy, and require them to repay Medicare for lower-quality treatment episodes — those that result in pain, lengthy therapy, or readmission to the hospital.
Beneficiaries would retain their freedom of choice to choose services and providers. Physicians and hospitals would be expected to continue to meet current standards required by the Medicare program. All existing safeguards to protect beneficiaries and patients would remain in place.
Through the five-year payment model, health care providers in 75 geographic areas will continue to be paid under existing Medicare payment systems. However, the hospital where the hip or knee replacement takes place would be held accountable for the quality and costs of care for the entire episode of care — from the time of the surgery through 90 days after discharge. All eligible hospitals in 75 geographic areas — calledMetropolitan Statistical Areas (MSAs) across the country will be included.
The MSAs are counties associated with a core urban area with a population of at least 50,000. Counties with no urban core area or an urban core area of less than 50,000 population were not eligible for selection. Eligible MSAs must have had at least 400 eligible hip and knee replacement surgeries between July 2013 and June 2014.
Depending on the 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 have an incentive to work with physicians, home health agencies, and nursing facilities to make sure beneficiaries get the coordinated care they need in order to reduce avoidable hospitalizations and complications. Hospitals will receive tools such as spending and utilization data and sharing of best practices to improve the effectiveness of care coordination.
Bundled payments for joint replacement surgeries will build upon successful demonstration programs already under way in Medicare. This model is also consistent with the private sector, where major employers and leading providers and care systems are moving toward bundled payments for orthopedic services.