Bundled Payments for Hip and Knee Replacement: Working as Planned?
When Medicare’s Comprehensive Care for Joint Replacement (CJR) program was implemented in 2016, the health care community—especially orthopaedic surgeons— had 2 major concerns. First, would the program actually demonstrate the ability to decrease the costs of total joint replacements while maintaining the same, or improved, outcomes? Second, would CJR promote the unintended consequence of participating hospitals and surgeons ”cherry picking” lower-risk patients and steering clear of higher-risk (and presumably higher cost) patients? Both of these questions were at the heart of the study by Barnett et al. in a recent issue of the New England Journal of Medicine.
The authors evaluated hip and knee replacements at 75 metropolitan centers that were mandated to participate in the CJR program and compared the costs, complication rates, and patient demographics to similar procedures at 121 control centers that did not participate in CJR. The authors found significantly greater decreases in institutional spending per joint-replacement episode in institutions participating in the CJR compared to those that did not. Most of these savings appeared to come from CJR-participating institutions sending fewer patients to post-acute care facilities after surgery. Furthermore, the authors did not find differences between centers participating in the CJR and control centers in terms of composite complication rate or the percentage of procedures that were performed on high-risk patients.
While this 2-year evaluation does not provide the level of detail necessary to make far-reaching conclusions, it does address two of the biggest concerns related to CJR implementation from a health-systems perspective. There may be individual CJR-participating centers that are not saving Medicare money or that are cherry picking lower-risk patients, but overall the program appears to be doing what it set out to do—successfully motivating participating hospitals and healthcare facilities to look critically at what they can do to decrease the costs of a joint-replacement episode while simultaneously maintaining a high level of patient care. The Trump administration shifted CJR to a partly voluntary model in March 2018, and I hope policymakers consider these findings if further changes to the CJR model are planned.
Chad A. Krueger, MD
JBJS Deputy Editor for Social Media
Guest Post: Get Ready for Medicare’s CJR Model
OrthoBuzz occasionally receives posts from guest bloggers. This “guest post” comes from Richard S. Yoon, MD and Alexander McLawhorn, MD, MBA.
Starting on April 1, 2016, Medicare will implement its Comprehensive Care for Joint Replacement (CJR) model in about 800 hospitals in 67 metropolitan areas around the United States. Finalized in November 2015, the CJR initiative is intended to enhance value for patients undergoing lower extremity joint replacement (LEJR) by motivating institutions to achieve quality improvement via cost control. (For a complete discussion of “value” in orthopaedics, see “Measuring Value in Orthopaedic Surgery” in JBJS Reviews.)
Medicare hopes CJR will promote standardized, coordinated care that takes each LEJR patient seamlessly through an “episode of care” that maximizes outcomes at a reduced cost. Episodes are triggered by hospital admission and are limited to admissions resulting in a discharge paid under MS-DRG 469 or 470. For CJR purposes, episodes last for 90 days following discharge.
Initially, episode target prices will be based on historical hospital-specific reimbursements, but over time, the target prices will increasingly reflect regional averages. If a hospital’s average LEJR episode cost is below the target price, it can receive a “bonus” from CMS. If its average cost is above the target price, it will owe CMS the difference. CMS has designed a gradual rollout plan to mitigate downside risk in the first year and provide current and future participants adequate time to implement evidence-based, cost-effective care and other quality programs in their institutions.
Richard Iorio, MD, chief of adult reconstruction at NYU-Langone Medical Center’s Department of Orthopaedic Surgery, says, “There will be definite winners and losers in CJR. Once geographic pricing becomes the dominant metric for target prices, there will be intense price competition in geographic areas and potential access problems for high risk patients.” At the moment, CJR stratifies risk based only on MS-DRG code and whether a patient has a hip fracture. Unless a more robust risk stratification method is implemented, “cherry-picking” patients may become a significant issue. (See related OrthoBuzz post “Tool for Pre-TJA Risk Stratification.”)
If you are an orthopaedic surgeon who performs LEJR, ask your department head or health system about CJR, because strategies that minimize cost and maximize quality may vary from hospital to hospital. Alignment of hospitals and surgeons is probably the most critical success factor with CJR. To that end, gainsharing— a key component of well-functioning hospital-surgeon partnerships within any bundled-payment environment —for individual orthopaedic surgeons is specifically allowed within the CJR final rule.
Click here for more information, including FAQs and a list of participating areas.
Richard S Yoon, MD is executive chief resident at the NYU Hospital for Joint Diseases.
Alexander McLawhorn, MD, MBA is an arthroplasty fellow at the Hospital for Special Surgery.
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