Orthopedic episodes

by Jonathan Pearce, CPA, FHFMA and Darcie Hurteau

By Jonathan Pearce and John Kalamaras

CMS has recently proposed to remove total knee arthroplasty (TKA) surgical procedures from the Medicare "inpatient-only" list, which would allow those procedures to be performed on an outpatient basis.

An overview of the major metrics involved in assessing risk and opportunity in the major joint replacement episodes involved in the Comprehensive Care for Joint Replacement and Bundled Payment for Care Improvement programs, from the point of view of the analytical team, physician leaders, and finance and operations management.

Presented at the National Bundled Payment Summit, Washington DC, June 8 2016

Presenters:

by Gloria Kupferman, Vice President, DataGen Group

In November 2015, the Centers for Medicare and Medicaid Services (CMS) issued its Comprehensive Care for Joint Replacement (CJR) payment model, a pilot bundled payment program for the most common inpatient surgeries for Medicare beneficiaries—hip and knee replacements, known as lower extremity joint replacements (LEJRs). CJR will be mandatory for hospitals in 67 Metropolitan Statistical Areas (MSAs). The CJR model will be mandatory for about 800 hospitals.

CMS has made the option available to BPCI participants to have their targets for the Major Joint Replacement of the Lower Extremity episodes stratified by whether the patient had a hip fracture. This issue is of concern to some BPCI participants because episodes involving fractures are considerably more costly than non-fracture episodes. While non-fracture episodes may cost $20-22,000, fracture episodes are typically 45-50% higher at $35-40,000.

Jonathan Pearce, CPA, FHFMA and Coleen Kivlahan, MD, MSPH

The Medicare Bundled Payment for Care Improvement (BPCI) program allows participants to assume financial risk for all Medicare services occurring within 30 to 90 day period after hospital discharge. Model 2 participants give up 2% of the episode target amount as a discount to CMS in 90-day episodes, but are allowed to retain any savings from Medicare cost reductions below the target amounts.

 Initially some BPCI participants were intrigued with the idea of participating in limited, procedurally-based episodes such as percutaneous coronary interventions (PCI) episodes in the Medicare Bundled Payment for Care Improvement program.