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CMS Releases Final Bundled Payment Model For Hip, Knee Replacement Surgeries

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The Centers for Medicare & Medicaid Services finalized its bundled payment model governing hip and knee replacement surgeries, which makes hospitals accountable for the cost and quality of the whole procedure post-discharge.

Hospitals in 67 areas, down from the original 75, are required to take part in the Comprehensive Care for Joint Replacement Payment Model, a five-year plan that will hold them accountable for all financial risks related to the surgery and in-patient stay 90 days after discharge.

For Sylvia Burwell, Health and Human Services secretary, it is all about improving the quality and value of care for hundreds of thousands in the United States through Medicare.

“By focusing on episodes of care, rather than a piecemeal system, we provide hospitals and physicians an incentive to work together to deliver the best care possible to patients,” she said in an official statement.

The final proposed rule was produced after a review of almost 400 comments from various sectors, and will begin April 1 instead of the original Jan. 1 start date.

The final rule also addressed concerns surrounding the the three-day stay rule for beneficiaries who enter qualified skilled nursing facilities (SNF), which incited fears that the move could result in 25 percent of one and two star SNFs to close over the whole test run.

In the final plan, the waiver would only be granted if a patient is to be discharged into an SNF included in a “qualified” list, with the definition of having an overall three star rating or higher for a minimum of seven of the last 12 months.

The rule also waives geographic and site requirements considered in reimbursement – a movement toward telehealth services. Medicare is traditionally strict on reimbursable telehealth services, including covering only a medical facility and not a home.

These strict guidelines are relaxed under the final CMS rule, allowing originating hospitals to integrate telehealth in post-operative care regardless where the patient is located, including the home.

The American Hospital Association lauded the final ruling, citing in particular the HHS’s Office of the Inspector General’s move to waive anti-kickback, doctor self-referral, and civil monetary penalty laws in consideration of specific financial arrangements and beneficiary incentives under the model.

This way, health providers can create their own programs, said the group’s president Rick Pollack.

“[They] recognized the importance of assuring that participating hospitals can pursue the program’s goals without running afoul of fraud and abuse laws,” Pollack said, deeming such safeguards critical to smooth care coordination.

Last year, over 400,000 Medicare beneficiaries underwent a hip or knee replacement, amounting to over $7 billion for hospitalizations alone. HHS said that despite this high volume, care costs and quality still greatly varied from one provider to another.

For example, complication rates post-surgery, such as implant failures, can be over three times higher for operations done at some hospitals than other facilities.

According to CMS principal deputy administrator and chief medical officer Dr. Patrick Conway, the model is all about patient care improvements.

“Hospitals, physicians, and other providers who work together can be successful and improve care for patients in this model, and CMS will help providers succeed,” he said.

Photo: Zdenko Zivkovic | Flickr

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