Bundled Payments Lower Medicare Spending on Joint Replacement

Hospitals that saved money through bundled payments more likely to be nonprofit, teaching, and integrated with a post-acute care facility compared to other hospitals

Savings hospitals had lower baseline spending than nonsavings hospitals during the first year of the Comprehensive Care for Joint Replacement (CJR) program, according to a Research Letter in JAMA.

Medicare’s CJR program offers bundled payments for hip and knee surgery at 799 hospitals that include payments for hospitalization and post-discharge care 90 days after the procedure into a single benchmark. The program incentivizes hospitals through bonus payments to exceed their quality and cost benchmarks. Overall, 67 urban markets in metropolitan statistical areas (MSAs) were required by Medicare to participate in the program.

Recently, Medicare has declared the most hospitals in 34 of 67 MSAs must continue participating in the CJR program, while low-volume hospitals could choose whether to continue or withdraw. The study evaluated Medicare’s change in policy and how it affects the future of mandatory bundled payment models.

For more information, please visit AJMC.com.

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