A staple mandatory bundled payment program geared toward hip and knee replacements has saved hundreds of dollars per episode over the past couple of years, recent research has found. The main reasons: a reduction in skilled nursing facility (SNF) reimbursements and an increase in the use of home health care.
Medicare policymakers launched the Comprehensive Care for Joint Replacement (CJR) model in 2016 in randomly selected metropolitan statistical areas. Under the mandatory bundled-payment model for hip or knee replacements, participating hospitals receive bonuses or pay penalties based on Medicare spending per hip- or knee-replacement episode.
To analyze cost savings tied to the CJR model, researchers reviewed Medicare U.S. claims data from 2015 through 2017, identifying more than 280,00 hip- or knee-replacement procedures in participating areas and over 377,000 procedures elsewhere. After the initiation of the CJR model, there were greater decreases in institutional spending per joint-replacement episode in treatment areas than in control areas, the researchers discovered.
Specifically, spending on joint replacements under CJR decreased by about $812 per episode compared to non-CJR replacements, while post-acute care facility discharges dropped by nearly 6%. The findings were published in January by the New England Journal of Medicine.
“Decreased Medicare spending on hip- and knee-replacement episodes at hospitals in the CJR program was nearly exclusively related to reductions in the use of post-acute care services in skilled nursing facilities and in-patient rehabilitation facilities,” researchers noted. “We did not find a negative effect on the rate of complications, readmissions, or death under the CJR program; therefore, it appears that hospitals may have successfully identified patients who are at the margin of needing post-acute care services who could instead be safely discharged home with home health services.”
Within participating hospitals, patients were discharged to home health agencies less than 35% of the time prior to the CJR model. After its initiation, that jumped to more than 38%.
Home health care usage increased after discharge for non-CJR hospitals as well, but only slightly — less than 1%.
“Post-acute care services may be the easiest target for hospitals to decrease episode-level spending because it is often unclear when these services are beneficial or what intensity of post-acute care is most appropriate,” the researchers also wrote.
The Trump administration lessened mandatory participation geography in the CJR model in 2017.
A September 2018 report compiled by the Lewin Group highlighted similar findings on home health care’s ability to lower episode cost for knee and hip replacements.
Although the CJR model has led to cost savings, it is not without its flaws, researchers caution. One concern about current bundled-payment programs is that they create a financial incentive to treat healthier patients — rather than those who are sicker and whose care may be more costly.
The research published in the New England Journal of Medicine found that there were no substantial changes in patient outcomes associated with changes in discharge patterns and usage. The research team was led by Michael Barnett of the Harvard T.H. Chan School of Public Health and Andrew Wilcock of Harvard Medical School.
“The big question has always been whether this new model can lead hospitals to meaningfully reduce spending without harming patients,” Barnett told Home Health Care News sister site Skilled Nursing News. “This study indicates that with the right financial incentive, hospitals can save money without compromising quality by sending more patients home rather than to a nursing facility.”
Additional reporting by Alex Spanko