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New Medicare Plan Targets Hip and Knee Replacement Complications

Rich Smith

Last updated: October 20, 2016 7:17 pm

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Medicare policymakers at the Centers for Medicare & Medicaid Services (CMS) are moving ahead with a plan they hope will result in high-quality cost-efficient hip and knee placement surgeries with fewer hip and knee replacement complications. 1

In 2013, Medicare covered 400,000 inpatient joint replacement procedures with costs totaling more than $7 billion for hospitalization alone. Virtually all the procedures done that year were fee-for-service, meaning the hospital billed Medicare separately for every service it provided. 2

Despite the high volume of these surgeries, quality and costs of care for these hip and knee replacement surgeries still vary greatly among providers.  For example, the rate of complications after surgery can be more than three times higher at some facilities than others. This increases the chances that the patient may be readmitted to the hospital. The average Medicare expenditure for surgery, hospitalization and recovery ranges from $16,500 to $33,000 across geographic areas. 3

As described by CMS, this new plan seeks to encourage hospitals, physicians and post-acute care providers to “improve the quality and efficiency of care for Medicare beneficiaries, which is essential to creating a health care system that delivers better care, spends our dollars more wisely, and leads to healthier Americans.” 4

Implant Failure Is a Potential Complication

Hip replacement surgery and knee replacement surgery are considered safe, but complications can and do occur.

According to U.S. News and World Report, Medicare’s new plan will reimburse hospitals for hip and knee replacement surgeries based on a quality score that has yet to be finalized. 5

Under the new pilot plan, however, hospitals will receive one bundled payment which will cover not only the hip and knee surgery, but all other procedures, complications, hospital readmissions and extended care provided for up to 90 days post-surgery. Hospitals that provide efficient high-quality care will be rewarded, while those that provide substandard care will bear the financial burden of the substandard care.

Whatever protocols a hospital puts in place to reduce complications will end up being utilized for all hip and knee surgery patients, not just those covered by Medicare.

Joint Replacement Complications Reduction Plan Starts April 1, 2016

The new plan for Medicare joint replacement reimbursement is called the Comprehensive Care for Joint Replacement (CJR) program. 6

CJR is set to officially start April 1 in 67 cities. However, some hospitals are not waiting and began adopting complications reduction protocols some time ago.

At Akron General Medical Center in Ohio U.S. News & World Report found that hospital administrators and clinical staff had extensively overhauled their approach to hip and knee replacement surgeries.

They accomplished this overhaul by, among other things, asking all hospital personnel at every stage of hip replacement management to identify ways to “improve quality, cut costs and improve the patients’ experience.” 7

  1. http://www.usnews.com/news/articles/2015/11/17/cms-new-model-for-hip-knee-replacement-payments. Accessed December 1, 2015. 

  2. https://innovation.cms.gov/initiatives/cjr. Accessed December 1, 2015. 

  3. https://innovation.cms.gov/initiatives/cjr. Accessed December 1, 2015. 

  4. https://innovation.cms.gov/initiatives/cjr. Accessed December 1, 2015. 

  5. http://www.usnews.com/news/articles/2015/11/17/cms-new-model-for-hip-knee-replacement-payments. Accessed December 1, 2015. 

  6. http://www.usnews.com/news/articles/2015/11/17/cms-new-model-for-hip-knee-replacement-payments. Accessed December 1, 2015; https://innovation.cms.gov/initiatives/cjr. Accessed December 1, 2015. 

  7. http://www.usnews.com/news/articles/2015/11/17/cms-new-model-for-hip-knee-replacement-payments. Accessed December 1, 2015.