Medicare bundled payments for lower extremity joint replacements results in fewer discharges to post-acute care facilities

1. Medicare patients randomized to the Comprehensive Care for Joint Replacement (CJR) bundle payment model were less likely to be discharged to a post-acute care facility.

2. There was no difference in overall Medicare spending among patients covered by the CJR bundle payment model compared to Medicare patients without the CJR bundle.

Evidence Rating Level: 1 (Excellent)

Study Rundown: The bundled payment model, such as the Comprehensive Care for Joint Replacements (CJR) program, applies a fixed price to single episodes of care to incentivize care coordination and decreased costs. However, it is unclear if bundled pay models will result in reduced costs with similar quality of care compared to the traditional fee-for-service reimbursement models.  In a mandatory-participation randomized trial by the Centers for Medicare and Medicaid Services, hospitals providing Lower Extremity Joint Replacements (LEJR) were allocated to the CJR bundle payment model or to a control group. During the first year of this five-year study, CJR resulted in a significantly lower percentage of patients being discharged to a post-acute care facility. However, there was no significantly difference in overall Medicare spending between the two groups. In addition, there were no differences in the number of days in post-acute care facilities, discharges to other locations, and Medicare fee-for-service spending during the episode.

This study corroborated what previous studies have shown which is post-acute care facilities are the first to respond following the implementation of alternative payment systems.

The limitation is that this study only reports the first year following the implementation of the CJR, thus the full impact of this alternative payment system has yet to be fully realized.

Click to read the study, published today in JAMA

Relevant Reading: Cost of joint replacement using bundled payment models

In-Depth [randomized controlled trial]: This 5-year study reports on first-year data for LEJR and the effectiveness of a CJR from April 1, 2016 to December 31, 2016. Of 196 eligible metropolitan statistical areas (MSAs), 121 were assigned to the control group while 67 of the MSAs were covered by the CJR. Medicare patients randomized to CJR were significantly less likely to be discharged to a postacute care facility (30.8% vs. 33.7%; p = 0.005). There was no difference in the number of days spent in post-acute care between the two groups (mean difference -0.48 days; CI₉₅ -1.06 to 0.11 days). Medicare spending on postacute care was significantly lower for the CJR group versus the control group ($3,871 vs $3,564; p = 0.04). There was no statistically significant difference in overall Medicare spending per episode among patients covered by the CJR bundle payment mol compared to Medicare patients without the CJR bundle (mean difference -$453; CI₉₅ -$214 to $683). In addition, there were no differences in the number of days in post-acute care facilities, discharges to other locations, and Medicare fee-for-service spending during the episode.

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