The cost of medical care in the United States has been shown to rise with advancing patient age, and total joint arthroplasty (TJA) is a prime example of this unsurprising phenomenon. In attempts to curtail costs and reduce variability, Medicare and other payers have introduced alternative payment models (APMs), such as the Bundled Payments for Care Improvement (BPCI) initiative. In this model’s application to TJA, when participating institutions keep the cost of the “episode” below a risk-adjusted target price, they accrue the savings as a profit, but they sustain a financial penalty if the episode costs more than the target price.
Multiple studies have suggested that APMs can negatively affect the fiscal health of institutions that care for many high-risk patients. Although increasing age has been associated with higher-cost episodes of care, age is not one of the factors that the BPCI model accounts for. Consequently, concerns have been raised that providers may practice “cost discrimination” against very old patients.
In the October 7, 2020 issue of The Journal, Petersen et al. examine how an aging population has affected a New York City orthopaedic center in terms of the BPCI model applied to TJA. The authors analyzed the relationship between patient age and cost of care among 1,662 patients who underwent primary total hip and knee arthroplasty over a 3-year period under BPCI. They then used a modeling tool to predict shifting age demographics for their local area out to the year 2040.
Petersen et al. found that under BPCI, their institution sustained a nearly $2,000-per-case loss for TJA care episodes among patients 85 to 99 years of age. Currently this loss is offset by profits realized by performing TJAs in younger patients. However, predictive modeling identified an inflection point of 2030, after which a relative increase in older patients and a decrease in younger patients will yield an overall net decrease in profits for primary TJA.
Because no one, including orthopaedic surgeons, can turn back the clock on aging, health care stakeholders must find ways either to adjust downward the cost of care for the elderly (seemingly difficult without adversely affecting outcomes) or adjust reimbursement models to account for the increased costs associated with aging. I agree with the conclusion of Petersen et al.: “The BPCI initiative and [other] novel APMs should consider age as a modifier for reimbursement to incentivize care for the more vulnerable and costly age groups in the future.”
Matthew R. Schmitz, MD
JBJS Deputy Editor for Social Media
Wide variability in the cost and quality of health care in the US has led some to describe our system as “uniquely inefficient.” Consequently, we continue to study variability intensely, especially in the realm of joint arthroplasty. In the June 3, 2020 issue of The Journal, Schilling et al. elegantly analyze the variations in 90-day episode payments made by Medicare Part A for total knee arthroplasty (TKA) from 2014 to 2016. In so doing, they provide a snapshot of hospital cost performance and, just as importantly, they offer a methodology by which to measure future hospital-level cost performance with this very popular surgery.
The authors reviewed >700,000 TKAs in the Medicare population at a time prior to the full implementation of the Comprehensive Care for Joint Replacement (CJR) model, and they ranked >3,200 hospitals within 9 US regions to determine cost performance. Schilling et al. found that during those 3 years, the mean Medicare episode payment for TKA decreased significantly, due almost entirely to a >$1,500 per-case decrease in post-acute care payments, which included lower costs for skilled nursing facilities and inpatient rehabilitation. Also decreasing during that same period were length of hospital stay and 90-day readmission rates.
These findings highlight the improvements in care and cost efficiency that were occurring even before implementation of the CJR. In a Commentary on this study, Susan Odum, PhD suggests that “the improved value of TKA illustrated by Schilling et al. includes the successful impacts of the BPCI [Bundled Payments for Care Improvement] program,” an alternative payment model that Medicare rolled out beginning in 2013.
On the other hand, the authors also reveal a persistently high degree of variability in episode payments and resource utilization both across and within geographic regions. This strongly suggests the possibility of further improvement. Regardless of which, if any, alternative payment model we participate in, everyone in the orthopaedic community should think about how to become more efficient in our delivery of musculoskeletal care. And this study provides a conceptual framework and benchmarks for identifying where the room for improvement is.
Matthew R. Schmitz, MD
JBJS Deputy Editor for Social Media
It is no secret that patients with Medicaid (both adults and children) have difficulty making appointments for both elective and trauma-related orthopaedic care. They also travel further for care compared to privately insured patients. Conversely, Medicaid reimbursement rates for orthopaedic surgeries are substantially lower than those from Medicare and commercial insurers. Patients with Medicaid also tend to be more socially complex and have higher no-show rates for clinic appointments and surgery.
Consequently, as recently as 2011, only 40% of US orthopaedic surgeons were accepting new patients with Medicaid. This “bottleneck” effect may only get worse as reimbursement plans shift towards “pay-for-performance” and value-based payment, prompting surgeons and hospitals to become increasingly concerned about optimizing patient selection.
In a 2012 JBJS study, my colleague Ryan Calfee and co-authors demonstrated that patients with Medicaid were traveling to our institution (Washington University/Barnes Jewish Hospital in St. Louis) not only for complex cases, but also for simple and moderate-complexity hand surgery issues. These patients were bypassing hand surgeons closer to home partly because the local hand surgeons did not accept Medicaid.
With those findings in mind, we decided to more closely examine Medicaid care delivery in our region. Ideally, the insurance mix of the area surrounding a hospital should match the payer mix of the hospital. Most of us who currently work or have trained in large academic centers know that this is often not the case. Anecdotally, there are hospitals in every region that “cherry pick” the best-insured patients and transfer out the financially less desirable cases to a nearby teaching hospital. In our paper, published in the August 21, 2019 issue of JBJS, the concept of “Medicaid share ratio” is intended to reflect whether the hospital payer mix matches the insurance mix of the community. A value of 1 indicates a perfect balance.
We examined the Medicaid share ratios of the 22 hospitals in our region to see if the hospitals were “pulling their weight.” The Medicaid share ratios for elective orthopaedic care such as total joint arthroplasty ranged from 0.05 to 4.73, demonstrating massive imbalances on both ends of the spectrum. We also found very high variability in the delivery of elective orthopaedic care (coefficient of variation = 93, where values >60 are considered “very high”) and moderate variability in trauma care (coefficient of variation = 34).
Our findings were sobering, but not unexpected. The fact that some hospitals bear the brunt of care for the underinsured and uninsured is not new, and the federal government currently includes Disproportionate Share Hospital (DSH) payments to offset these losses. However, DSH payments are scheduled to decrease substantially in coming years as part of the original intent of the Affordable Care Act. If the continuing (and possibly worsening) burden of undercompensated care becomes financially suffocating to teaching and safety-net hospitals, they may seek to curb those losses in ways that could further limit access to underinsured patients and/or drive costs up for patients with other types of insurance.
At the surgeon level, we should address surgeon hesitation to accept Medicaid patients through engagement with specialty societies and policy reform. Our research team is currently working to learn more about what surgeons and patients think are potential solutions for these disparities in our region. As surgeons and researchers, we must work toward a more complete understanding of what drives these disparities in orthopaedic care. Otherwise, it will be impossible to figure out how to fix them.
Christopher Dy, MD, MPH is a hand and peripheral nerve surgeon, an assistant professor at Washington University Orthopaedics, and a member of the JBJS Social Media Advisory Board.
At the risk of economic oversimplification, it is difficult to sustainably provide a service when payment for it is less than the cost to perform it. But that is one reality exposed by Hevesi et al. in the May 15, 2019 issue of The Journal. Using National Inpatient Sample and ACS-NSQIP data, the authors compared the average costs and 30-day complication rates for revision total hip arthroplasties (THAs) performed for 3 different indications—fractures, wear/loosening, and instability—at both a local and national level. They found that the average hospitalization costs associated with a revision THA related to a fracture were 33% to 48% higher (p < 0.001) than the cost of revision THAs related to wear or instability.
However, the authors emphasize that all 3 of these indications for revision THA are reimbursed at the same rate based on Medicare Diagnosis-Related Group (DRG) codes. DRGs take into account patient comorbidities to determine reimbursement levels—but they do not adjust payments for THA revision according to indication. Hevesi et al. note that the only DRG reimbursement level that would cover the average cost of a revision THA for a fracture would be one performed on a patient with severe medical comorbidities or a major complication. Not surprisingly, patients who underwent a revision THA to treat a fracture were found to have a higher age and more medical comorbidities than those undergoing a revision for wear or instability.
The authors use this data to make a very compelling case that DRGs for revision THA should be changed so they are indication-specific, taking into account the underlying reason for the revision. They observe that “a DRG scheme that does not distinguish between indications for revision THA sets the stage for disincentivizing the care of fracture patients and incentivizing referrals to other facilities.” Those “other facilities” usually end up being large tertiary-care centers, which the authors claim “perform a higher percentage of the costlier revision THA indications.”
This problem of reimbursement inequality is not unique to revision THAs and requires further investigation in many fields. Unless “the system” addresses these subtle but important differences, tertiary referral centers may be inundated with patients who need procedures that cost more to perform than the institutions receive in reimbursement—an unsustainable scenario.
Chad A. Krueger, MD
JBJS Deputy Editor for Social Media
It is not often that The Journal of Bone & Joint Surgery publishes an article about data-linkage efforts. To even raise the topic with most readers of The Journal would elicit a yawn and quick dismissal of the abstract without a second thought. With this fact duly noted, the possibility of linking health-system joint-replacement registries with Medicare claims data is a first step in a potentially game-changing approach to achieving the long-term clinical research our specialty needs.
In the June 20, 2018 issue of JBJS, Raman et al. detail their successful linkage of a total ankle arthroplasty (TAA) registry with Medicare data without the use of unique patient identifiers. Among 280 TAA patients over the age of 65, 250 had their registry data linked with their Medicare record with exact matches for date of procedure, date of birth, and sex. Of the linked records, 214 (76.4%) had ≥3 years of postoperative claims data.
Why are these findings so important? The answer is follow-up. Every clinician and/or researcher who has attempted to follow patients beyond the first year after a procedure understands how difficult long-term follow-up is. We live in a mobile society in which informative posttreatment data is easily lost. The younger the patient group, the more difficult it usually is to locate patients as time passes. If patients are doing well, many stop coming to our offices, no matter how strongly we recommend annual follow-ups. Everyone is busy—including retirees—and most have better things to do than drive to their surgeon’s office or even complete a web-based questionnaire. Additionally, some patients care only about their own outcomes; they are not as focused as we are on contributing to the advancement of the profession and improving outcomes at the population level.
By linking patient data from a local health-system registry to nationwide claims data, we can gain a better understanding of long-term patient progress. We can use the patient- and implant-specific data housed in the registry and essentially substitute the information from follow-up visits that did not take place within the registry system with the data contained within the Medicare system, which follows beneficiaries wherever they live.
The marriage of registry and claims data is not perfect, though, because patients who are still working probably have private insurance coverage that is not captured by the Medicare system. (Of course, if universal coverage were to come to pass, that issue would be eliminated.) Furthermore, any time claims data are used, uncertainty about the accuracy of coding must be considered. These real-world limitations notwithstanding, the linkage of registry data with claims data does have great potential for enhancing our ability to analyze—and improve—long-term orthopaedic outcomes.
Marc Swiontkowski, MD
The bundled-payment model has found some early success within the field of orthopaedic surgery, most notably in joint replacement (see related OrthoBuzz post), However, more robust risk-adjustment methods are needed, especially in terms of patient factors. That is the message delivered by Cairns et al. in their retrospective analysis of Medicare data from 2008 to 2012 published in the February 21, 2018 edition of JBJS. The authors make a compelling case for improved risk stratification of hip- and femur-fracture patients to ensure that all patient populations have and retain access to appropriate care.
The authors analyzed reimbursements for the surgical hospitalization and 90 days of post-discharge care among nearly 28,000 patients who met inclusion criteria for the Surgical Hip and Femur Fracture Treatment (SHFFT) model proposed by the Centers for Medicare and Medicaid Services (CMS). Their findings highlighted various inconsistencies that could have unintended consequences if not accounted for in the bundled-payment model. For example, reimbursements were $1000 to $2000 lower for patients in their 80s, who tend to have more comorbidities that require more care, than for younger patients. CMS proposed using Diagnosis Related Groups (DRGs) and geographic location to adjust for risk in its SHFFT bundled-payment model, but Cairns et al. identify several other factors (such as patient age and gender, ASA and Charlson Comorbidity Index scores, and procedure type) that could provide a more realistic stratification of risk.
The article clearly articulates how risk adjustments that don’t include more specific patient factors could lead to a multitude of unintended consequences for patients, providers, and the entire healthcare system. These findings could remain relevant now that CMS has announced an “advanced” voluntary bundled-payment model after the Trump administration cancelled SHFFT in late 2017.
Whatever bundled-payment model takes hold, the totality of the orthopaedic literature strongly suggests that the best outcomes are derived from making specific treatment plans for each patient based on the individual characteristics of his or her case. It seems reasonable that the best bundled-payment plans would do the same.
Chad A. Krueger, MD
JBJS Deputy Editor for Social Media
In the February 7, 2018 issue of The Journal, Lalezari et al. provide a detailed analysis of the variability in state-based Medicaid reimbursements to physicians for 10 common orthopaedic procedures, including hip and knee replacement and 5 spinal surgeries. The discrepancies in reimbursements between states, even bordering states in the same geographic region, are substantial and do not seem to follow any pattern. This phenomenon of reimbursement variability has been mentioned in podium presentations and some less comprehensive reports in the past. However, the authors of this study used a careful, methodological approach to accurately report these differences in a manner that is easy for readers to understand.
There is simply no way to rationalize this degree of variation in Medicaid reimbursement; the magnitude cannot be explained by differences in workload or practice costs because Lalezari et al. adjusted for cost of living and relative value units (RVUs). Nor does Medicaid-reimbursement variability seem to be related to Medicare reimbursement rates, as some states had Medicaid reimbursements that were higher than Medicare reimbursements for all procedures analyzed.
The orthopaedic community should not react directly to the reimbursement discrepancies presented in this article. Rather, orthopaedic surgeons, health system administrators, and patients alike should bring the variability of Medicaid reimbursements to the attention of state and federal policy makers.
Alas, I am not optimistic that this issue will gain a lot of traction given the long list of healthcare-related issues currently on the desks of state and federal lawmakers. Moreover, as the authors mention, these state-based reimbursement rates are likely related to many variables, and Lalezari et al. further observe that “health policy intended to improve access to specialty care should not solely focus on physician reimbursement.” However, consistent communication with elected officials to help explain the impact that these variable rates can have on patient care, accompanied by updated studies like this one every 2 to 4 years, would seem to be a rational response to these data.
Marc Swiontkowski, MD
Are you confused and frustrated by Medicare’s Quality-Incentive Programs, such as the Merit Based Incentive Payment System (MIPS), Comprehensive Care for Joint Replacement (CJR) program, and the Surgical Hip and Femur Fracture Treatment (SHFFT) model? If so, this webinar is for you.
On Tuesday, August 15, 2017 at 8:00 PM EDT, The Journal of Bone & Joint Surgery (JBJS) and the American Orthopaedic Association (AOA) will host a complimentary LIVE webinar featuring the following speakers and topics:
- Brian McCardel, MD will discuss choosing MIPS-related quality measures, improving performance on those measures, and qualifying for bonuses.
- Thomas Barber, MD, FAOA will focus on managing clinical care including how to deliver low-cost high-quality care for high-risk orthopaedic patients.
- Alexandra Page, MD will discuss partnering with hospitals and post-acute organizations to improve patient care and reap financial rewards.
Moderated by Douglas Lundy, MD, FAOA, the webinar will include a live Q&A session between the audience and panelists.
According to Medscape (registration required) and other media reports, President-Elect Donald Trump has tapped Rep. Tom Price, MD (R-GA) to be the next secretary of the US Department of Health and Human Services (HHS).
Dr. Price, an orthopaedic surgeon, became chair of the House Budget Committee in 2014, and he is a member of the GOP Doctors Caucus, which has vigorously opposed the Affordable Care Act (ACA). Dr. Price has introduced ACA-replacement legislation called the Empowering Patients First Act. Among other things, Dr. Price’s legislation would allow Medicare-eligible people to opt out of the program and purchase private health insurance using tax credits. In the bill’s latest form, people between 18 and 35 years of age would also be eligible to receive $1200 in tax credits to buy health coverage on the individual market.
Dr. Price has taken other stands on health care policy that are consistent with a small-government approach, although he did vote for the Medicare Access and CHIP Reauthorization Act (MACRA), which gradually shifts Medicare from a fee-for-service to pay-for-value system.
HHS Secretary nominees face a confirmation vote in the Senate, but by all accounts, Dr. Price’s personality will not get in the way of that. Donald Palmisano, Jr., executive director of the Medical Association of Georgia, told Medscape that Dr. Price is “approachable and accessible to political friends and foes alike.”
OrthoBuzz occasionally receives posts from guest bloggers. This guest post comes from Richard Yoon, MD.
In a recent issue of JAMA, Dummit et al. analyzed cost and quality results from the Centers for Medicare & Medicaid Services (CMS) Bundled Payment for Care Improvement (BPCI) initiative. The authors compared joint-replacement results between hospitals that voluntarily participate in the BPCI program versus matched comparison hospitals that do not participate. Nearly 60,000 lower extremity joint replacement procedures from each hospital type were included in the analysis.
Medicare payments declined over time in both groups of hospitals, but the authors noted a greater decline in costs among the BPCI hospitals, primarily due to reduced utilization of post-institutional acute care. There were no statistical differences in quality between the BPCI hospitals and comparison hospitals, as measured by unplanned admissions, emergency department visits, and mortality at both 30 and 90 days. These results echo those reported by other pilots in the United States and suggest that similar programs could reduce cost per episode of care without compromising quality.
However, even proponents of the new programs are cautious. For example, in his JAMA editorial, Elliot Fisher, MD warns readers that because BPCI is a voluntary program, the results may not reflect the true impact of a more widespread bundled-payment model. The incentives, he argues, could end up contributing to volume increases or shifts toward healthier—and “more profitable”—patients. As Fisher concludes, “Bundled payments leave the overarching incentive to increase volume solidly in place.”
In a separate JAMA Viewpoint article, Ibrahim et al. warn that another CMS program, the Comprehensive Care for Joint Replacement (CJR) model, could unintentionally amplify already existing racial disparities in elective joint replacement. CJR is a mandatory initiative in 67 randomly selected US metropolitan areas. The authors say that CJR might improve postoperative quality of care for minority patients after joint replacement, but that the program could also end up favoring healthier, well-insured patients.
Overall, at this early stage, these two CMS models offer promising, comprehensive approaches to joint replacement that may prove cost-saving without comprising quality of care. Results like the ones published by Dummit et al. are hopeful, but longer-term, outcomes-based, and cost-focused studies that include epidemiologic and racial impact must be performed as we move forward carefully.
Richard Yoon, MD is a fellow in orthopaedic traumatology and complex adult reconstruction at Orlando Regional Medical Center.