CMS proposes knee, hip surgery bundled payments — 5 key notes

Practice Management

CMS proposed a hip and knee bundled payment plan for hospitals that would hold hospitals accountable for providing quality, cost-effective care.

Two years ago, there were more than 400,000 inpatient primary knee and hip replacements in the United States for Medicare patients, costing the agency more than $7 billion for hospitalization alone. CMS hopes a new incentive program will help hospitals avoid complications that result in readmission, protracted rehabilitation and increased postoperative pain.


"By focusing on episodes of care, rather than a piecemeal system, hospitals and physicians have an incentive to work together to drive more effective and efficient care," said Health and Human Services Secretary Sylvia M. Burwell. "The 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."


Here are five things to know about the Comprehensive Care for Joint Replacement payment model:


1. Under the proposed five-year bundled payment plan, hospitals would continue receiving payment under the existing Medicare payment systems, but held accountable for the quality and cost of hip and knee replacement surgery. The episode of care would extend 90 days after discharge.


2. Hospitals could receive additional payment or be required to repay Medicare for a portion of the episode depending on the quality of care and cost performance.


3. The average Medicare expenditure for surgery, hospitalization and recovery ranges from $16,500 to $33,000 for knee and hip surgery across geographic areas. The new plan would impact providers in 75 geographic areas.


4. The federal government hopes this initiative will encourage hospitals to work with physicians, home health agencies and nursing facilities to coordinate care and reduce avoidable hospitalizations and complications. The bundled payment plans for joint surgeries are built on a successful demonstration project underway in Medicare and is consistent with bundled payment plans in the private sector.


5. The participating hospitals would receive tools, including spending and utilization data, and have the ability to share best practices for improved care coordination. CMS will make the initiative available on July 14 for stakeholder comments, and the comment period extends through Sept. 8.


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