A Cautionary Tale: Malaligned Incentives in Total Hip and Knee Arthroplasty Payment Model Reforms Threaten Promising Innovation and Access to Care

Over the past several years, there have been notable changes and controversies involving Medicare reimbursement for total hip (THA) and total knee arthroplasty (TKA). We have seen the development and implementation of experimental bundled payment model pilot programs goals of improving quality and decreasing overall costs of care during the last decade. Many orthopaedic surgeons have embraced these programs and have demonstrated the ability to succeed in these new models by implementing strategies, such as preservice optimization, to shift care away from inpatient or postdischarge settings and reduce postoperative complications. However, these achievements have been met with continual reductions in surgeon reimbursement rates, lower bundle payment target pricings, modest increases in hospital reimbursement rates, and inappropriate valuations of THA and TKA Common Procedural Terminology (CPT) codes. These challenges have led to an organized advocacy movement and spurred research involving the methods by which improvements have been made throughout the entire episode of arthroplasty care. Collectively, these efforts have recently led to a novel application of CPT codes recognized by payers to potentially capture presurgical optimization work. In this paper, we present an overview of contemporary payment models, summarize notable events involved in the review of THA and TKA CPT codes, review recent changes to THA and TKA reimbursement, and discuss future challenges faced by arthroplasty surgeons that threaten access to high-quality THA and TKA care.

Can vertically integrated health systems provide greater value: The case of hospitals under the comprehensive care for joint replacement model?

OBJECTIVE

We aim to assess whether system providers perform better than nonsystem providers under an alternative payment model that incentivizes high-quality, cost-efficient care. We posit that the payment environment and the incentives it provides can affect the relative performance of vertically integrated health systems. To examine this potential influence, we compare system and nonsystem hospitals participating in Medicare's Comprehensive Care for Joint Replacement (CJR) model.

DATA SOURCES

We used hospital cost and quality data from the Centers for Medicare & Medicaid Services linked to data from the Agency for Healthcare Research and Quality's Compendium of US Health Systems and hospital characteristics from secondary sources. The data include 706 hospitals in 67 metropolitan areas.

STUDY DESIGN

We estimated regressions that compared system and nonsystem hospitals' 2017 cost and quality performance providing lower joint replacements among hospitals required to participate in CJR.

PRINCIPAL FINDINGS

Among CJR hospitals, system hospitals that provided comprehensive services in their local market had 5.8 percent ($1612) lower episode costs (P = .01) than nonsystem hospitals. System hospitals that did not provide such services had 3.5 percent ($967) lower episode costs (P = .14). Quality differences between system hospitals and nonsystem hospitals were mostly small and statistically insignificant.

CONCLUSIONS

When operating under alternative payment model incentives, vertical integration may enable hospitals to lower costs with similar quality scores.

Total Hip Arthroplasty for Femoral Neck Fracture: The Economic Implications of Orthopedic Subspecialty Training

BACKGROUND

Hip fractures have significant economic implications as a result of their associated direct and indirect medical costs. Under alternative payment models, it has become increasingly important for institutions to find avenues by which costs could be reduced while maintaining outcomes in these cases.

METHODS

A multi-institutional retrospective analysis of Medicare patients who underwent total hip arthroplasty (THA) for femoral neck fracture was conducted to assess the impact of fellowship training in adult reconstruction (AR) on the total costs of the 90-day episode of care. Patients were divided into 2 cohorts according to fellowship training status of the operating surgeon: (1) AR-trained and (2) other fellowship training (non-AR). The primary outcome was the total cost of the 90-day episode of care converted to a percentage of the bundled payment target price.

RESULTS

A total of 291 patients who underwent THA for the treatment of a femoral neck fracture were included. The average total cost percentage of the 90-day episode of care was significantly lower for the AR cohort 70.9% (±36.6%) than the non-AR cohort 82.6% (±36.1%) (P < .01). After controlling for baseline demographics in the multivariable logistic regression, the care episodes in which the operating surgeons were AR fellowship-trained were still found to be significantly lower, at a rate of 0.87 times the costs of the non-AR surgeons (95% confidence interval 0.78-0.97, P = .011). In addition, the non-AR cohort exceeded the bundle target price more frequently than the AR cohort, 49 (28.7%) vs 16 (13.3%) (P = .02).

CONCLUSION

In an era of bundled payments, ascertaining factors that may increase the value of care while decreasing the cost is paramount for institutions and policymakers alike. The results presented in this study suggest that in the femoral neck fracture population, surgeons trained in AR achieve lower total costs for the THA episode of care. Furthermore, non-AR fellowship-trained surgeons exceeded the bundled payment target more frequently than the AR surgeons.