CMS extends hip and knee replacement model for 3 years

care coordination
The Centers for Medicare & Medicaid Services has extended through 2024 a bundled payment model that aims to pay providers for the total cost of care for hip and knee replacements. (Getty)

The Biden administration has extended through 2024 a bundled payment model that aims to lower costs and improve quality for hip and knee replacements.

The Center for Medicare and Medicaid Innovation (CMMI) announced on Thursday a final rule that extends the model for another three performance years through Dec. 31, 2024. The rule also makes some adjustments to price calculations.

The Comprehensive Care for Joint Replacement model aims to pay providers based on total episodes of care for hip and knee replacements to curb costs and improve quality.

Hospitals in the model that meet spending and quality thresholds can get an additional Medicare payment. But hospitals that don’t meet targets must repay Medicare for a portion of their spending.

During the first three years of the model, the first performance period of which starts in 2016, hospitals had a “statistically significant decrease” in average payments for all hip and knee replacements relative to a control group, according to a fact sheet on the final rule.

“After accounting for net reconciliation payments, estimated net savings … was $61.6 million (a savings of 2% of the baseline),” the Centers for Medicare & Medicaid Services said. “The gross reduction in payments is primarily due to decreases in institutional post-acute care use.”

The decision to extend the bundled payment model comes after the Biden administration has pulled or delayed several others as it reviews how to approach value-based care.

New CMMI Director Liz Fowler, Ph.D., recently said that the agency is committed to value-based care but is reviewing whether some models overlap.

Fowler’s predecessor, Brad Smith, also criticized the savings and quality improvements of bundled payment models. Smith said last year that global budget models that offered a total budget generated greater savings.