Home Health Shown to Cut Costs in Joint Replacement Patients

The use of home health services after a major joint repair surgery for Medicare patients results in cost-effective care and lower readmission rates, according to data newly released Thursday.

The data analysis, conducted by Dobson | DaVanzo & Associates and released by the Alliance for Home Health Quality and Innovation, comes just more than two months after Centers for Medicare & Medicaid Services (CMS) launched a bundled payment system for joint replacements through the mandatory Comprehensive Care for Joint Replacement (CJR) model in 67 regions. It examines the distribution of discharges between October 2011 and September 2014 for patients from the hospital to various post-acute care settings, the average Medicare payment per episode by first setting, and the average readmission rate for related conditions within the CJR model.

“The data analysis points to the value of home health care in the context of the CJR model,” Teresa Lee, executive director of the Alliance, tells Home Health Care News.


Under the model, hospitals in the select regions are responsible for Medicare spending on hip and knee replacement episodes of care, including hospital and post-hospitals of costs. If spending exceeds certain thresholds—based on the hospitals’ past spending and that of its regional peers—it could be dinged with Medicare penalties.

Generally, when home health is the first post-acute setting after a hospital discharge, patients have lower Medicare episode payments and lower readmission rates than facility-based settings, according to the data. For example, across all settings, 8% of episodes included in the data contain a readmission, while that rate is lower among home health agency episodes, at an average of 5%. Meanwhile, readmission rates range between 12% to 15% for patients receiving rehabilitation in facility-based settings.

The data also indicates significant savings for the Medicare program when patients turn to home health after a hospital stay. The average Medicare episode payment for knee or hip replacements without major complications is $24,900, but that number drops to about $19,900 when home health is the first post-acute setting for the patient.


“However, HHA first setting episodes had slightly higher Medicare payments and readmission rates compared to Community care, which includes physician and outpatient therapy services,” according to the data analysis. “Higher Medicare payments for HHA episodes are likely attributed to the higher clinical severity compared to patients who are discharged home with no formal post-acute care.”

Additionally, patients who go on to receive home health care initially are far less likely to undergo fractures following surgery. The average hip fracture rate for those who received home health services as the first post-acute setting was 2.5%, as compared to 30.9% at inpatient rehabilitation facilities and 20.5% at skilled nursing facilities.

“Fracture rates are critical not only in understanding differences in Medicare payment and readmissions across different settings, but in understanding significant variation across regions, due to the potential impact fractures have on payment and readmission rates,” the analysis states.

While this data won’t impact payment bundles, it’s a good indicator of what’s to come and how crucial agreements between home health agencies and hospitals will be moving forward, according to Lee.

“This is data that shows the importance of partnerships and the use of home health in the context of caring for patients after they’ve received major joint replacements, particularly in the areas included in the CJR model,” Lee says. “It’s critically important for home health agencies to reach out with hospitals in those areas.”

Written by Kourtney Liepelt

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