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Medicare Proposes Restructuring Of Payments For Hip And Knee Replacement Surgeries

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The Centers for Medicare and Medicaid Services (CMS) plans to restructure the payment terms involved in the treatment and care of patients requiring hip and knee replacement surgeries. These two procedures are two of the most common surgical operations being catered by the CMS. The proposals are said to be part of Obama administration's continuous efforts to revolutionize the healthcare delivery system in the US for better quality care at smarter cost expenditures.

CMS invited hospitals and medical providers on Thursday, July 9, to gather comments and opinions regarding the proposed new payment scheme. Dubbed as "bundled payments," the 5-year plan is to provide one-time payment of the same rate to all healthcare providers for the holistic care of patients undergoing hip and knee replacement procedures from the operation to discharge and after-care. Through this scheme, hospitals from 75 geographic locations across the country will be held accountable for the quality of care they deliver to the beneficiaries of Medicare fee-for-service procedures, hence, its increasing popularity over the years.

CMS will also be including an incentive program, which will grant good-performing healthcare providers with bonuses and subject providers with low-quality services to repay Medicare a portion of the health expenses. Part of the criteria for this program is the monitoring of complications and readmissions, and the reports of the patients regarding their status and outcome of procedure, says Dr. Patrick Conway, deputy administrator for innovation and quality and CMS chief medical officer

According to the CMS, it paid more than $7 billion for hospitalization expenses of 400,000 joint replacement surgeries in 2013. The average cost of expenditure ranges from $16,500 to $33,000, across the US. The capabilities of the hospitals to prevent postoperative complication are also varied in different locations. Through the new payment scheme, the CMS is expected to save more that $150 million in a span of five years.

If the entire process of approval will yield a positive response, the payment model will take effect on Jan. 1, 2016. A comment period, which will last for 60 days, will first be held, after which the succeeding steps will be determined on whether the goal of providing better quality care at lower costs will be achieved.

"Each player knows he or she is one part of the composition, and only by working together does the music come alive," says Sylvia Mathews Burwell, secretary of Health and Human Services. "By bundling payments, hospitals and doctors would have an incentive to deliver more-effective care. We know this will be a change from how many hospitals do business."

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