A new federal government initiative will hold hospitals accountable for the quality of care they deliver to Medicare fee-for-service beneficiaries for joint replacements.
Known as the Comprehensive Care for Joint Replacement, the model is expected to save the Medicare program as much as $343 million over five years by bundling payments to hospitals to perform hip and knee replacements.
Under the plan unveiled by the Centers for Medicare & Medicaid Services, hospitals would not be at risk in the first year. However, risk would slowly ramp up over the next several years, with CMS switching from pricing based on a hospital's prior clinical experiences to a regional model by the final year.
"We want to test this on a larger scale," Patrick Conway, M.D., director of the Center for Medicare and Medicaid Innovation, told U.S. News & World Report. "We think hospitals, physicians and post-acute providers will be able to partner together and deliver higher quality and more efficient care."
Altogether, CMS spends about $7 billion a year on joint replacements but quality varies widely at hospitals that perform the procedure. While the initiative may focus on cost and quality, it will not necessarily cut down on the growing volume of joint replacements being performed in the U.S. The recently implemented Medicare Hospital Readmission Reduction Program has also shown success in reducing the number of readmissions connected to joint replacement surgery.
CMS said it received some 400 comments in all from the provider community, and made adjustments accordingly before finalizing the rule.
The hospital sector appears generally supportive of the initiative. American Hospital Association Executive Vice President Rick Pollack said in a statement that "we also appreciate the delay in program's start date until April 1, 2016, but remain concerned that hospitals will still be pressed to put in place the processes and procedures necessary for the program."