Why Bundled Payments for Joint Replacement May Be Risky for Patients

The following is an excerpt of an article on bundled payments for joint replacement written by Michael Wong, JD, Executive Director of PPAHS and Lynn Razzano, RN, MSN, ONCC, Clinical Nurse Consultant at PPAHS.  It was first appeared on The Doctor Weighs In on November 18, 2016.  To read the full article, please click here.


According to the Centers for Medicare & Medicaid Services (CMS), hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries. In 2014, there were more than 400,000 procedures, costing more than $7 billion for the hospitalizations. CMS says that there is little consistency across providers in terms of the quality and cost of care for these procedures.

With an aim to improve the consistency of the quality and cost of care among providers,  CMS has introduced a new payment model, Comprehensive Care for Joint Replacement (CJR), in April 2016, using a concept known as bundled payments.

A significant aspect of this new model is that it contains exceptions to what will be reimbursed—exceptions that could prove potentially harmful to patients recovering from hip and knee replacements. Reconsidering these exceptions could go a long way in improving patient safety, reducing the number of readmissions, and reducing the cost of care for patients undergoing hip and knee replacement.

Comparing pharmacological and nonpharmacological treatments

Both treatment options are equally effective at preventing blood clots but IPCDs are associated with lower risk of major bleeding.

Concerning is the exclusion of IPCDs (a significant exception to CJR) as a reimbursable treatment option for VTE prophylaxis at home under Medicare Part B—it may be significantly undermining efforts to keep patients safe from VTE occurrence due to the prolonged high risk after surgery.

The exception is puzzling for two reasons:

  1. The CJR bundled payment option reimburses for IPCD prescriptions under Medicare Part A and, therefore, recognizes their role in VTE prophylaxis treatment. Both VTE and bleeding each account for 6.3% of CJR readmissions, which trail only surgical site infections (18.8%) and prosthesis issues (7.5%) as the leading reasons for readmissions.
  2. In addition to patient safety concerns, readmissions increase the cost of care and put a financial strain on the healthcare system in the United States. The exception of IPCDs from the bundled payment reimbursement needs to be re-evaluated.

Should IPCDs be covered under CJR?

By denying coverage of IPCDs under Medicare Part B:

  • Physicians may be unable to practice medicine in the best interests of their patients being discharged from the hospital.
  • Patients may be unable to receive quality-of-care in a cost-effective manner (see the SAFE Study for more information).
  • Patients need care that is based on evidence, not reimbursements. Bundled payment models such as CJR should be designed to encourage the safest, most clinically effective, most cost-efficient options.

To read the full article on The Doctor Weighs In, please click here.

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