CMS Proposes Bundled Episode-of-Care Payment for Joint Replacement

​The Centers for Medicare and Medicaid Services (CMS) is proposing to bundle payments for hip or knee replacement procedures and hold hospitals accountable for the costs and quality of care associated with the procedures from the time of surgery through the next 90 days. The proposal, which is based on existing demonstration projects, appears in the July 14, 2015, Federal Register. By bundling payments for an episode of care associated with the joint replacement procedures, CMS expects to improve procedure outcomes with incentives for hospitals and other healthcare providers (e.g., physicians, rehabilitation facilities, home health agencies) to work closely together to coordinate care and prevent infections, implant failures, and other adverse outcomes leading to readmissions. Under the current reimbursement system, each provider is paid separately for the care they give to joint replacement patients and, consequently, has little incentive to coordinate the patient's care with the patient's other providers. Costs and care outcomes vary greatly, with infection rates and implant failures more than three times as high at some facilities as at others and with costs ranging from $16,000 to $33,000 for the surgery, hospitalization, and recovery, CMS says in a fact sheet about the proposal.