You may recall hearing about mandatory bundled payments. The Centers for Medicare and Medicaid Services recently announced they were going to change the reimbursement methodology for some of the more common orthopedic surgical procedures. Now that comment periods have passed and the many comments have been considered or added, this new law goes into effect on January 1, 2016, unless there are legitimate requests for delays from organizations such as the American Hospital Association.
But what are these new mandatory bundled payments and how will they affect Medicare and Medicaid recipients?
As we know, hip and knee replacements are some of the most common surgeries that Medicare beneficiaries receive. In 2013 alone, there were more than 400,000 inpatient primary procedures, costing more than $7 billion in hospital fees. There are some incentives exist for hospitals to avoid post-surgery complications that can result in pain, re-admissions to the hospital, or protracted rehabilitative care, it’s the quality and cost of care for these hip and knee replacement surgeries that vary greatly among various providers.
The rate of complications such as infections or implant failures after surgery can be more than three times higher at some hospitals than others. This means the chances of a patient being readmitted varies greatly as well. The collective costs of a standard hip or knee replacement ranges from $16,500 to $33,000 across geographic regions.
This is one reason CMS sought to make changes. The Comprehensive Care for Joint Replacement payment model was designed to hold hospitals accountable for the quality of care they deliver to patients who use Medicare fee-for-service for hip and knee replacements from surgery through recovery. Supporters say it will transform the American health system to deliver better quality care while also keeping an eye on the economics.
During a presser last week, Health and Human Services Secretary Sylvia M. Burwell said,
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. 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. And it’s what we hear that many doctors and providers want – to be able to give the best care possible to their patients.
As the program stands now, it’s on a five-year payment model with health care providers continuing to be paid under existing Medicare payment systems. It’s the hospital that will shoulder the responsibilities that were one time shared with physicians and surgeons. The facilities will 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.