Cutting out cost: Comprehensive care for joint replacement quality score

By Mikalyn T. DeFoor, third-year medical student, Medical College of Georgia, Denise Hinton, third-year medical student, Medical College of Georgia; and Janis Coffin, DO, FAAFP, FACMPE, chief transformation officer, Augusta University Health, Augusta, Ga. 

Lower extremity hip and knee joint replacements are the most common inpatient surgeries undergone by Medicare beneficiaries and currently account for more Medicare expense than any other inpatient procedure.1 As the population continues to age, the incidence of hip and knee joint replacements in the United States is projected to be more than 1.8 million and 4 million, respectively.2 The length of rehabilitation periods and associated complications vary widely among hospitals and providers with the average Medicare expenditure ranging from $16,500 to $33,000, including surgery, hospitalization stay and recovery.3 By holding participating facilities financially responsible for both quality and costs of an episode of care, the Comprehensive Care for Joint Replacement (CJR) model was designed to more efficiently care for beneficiaries by examining bundle payment and quality measurement for an episode of care while encouraging coordination of care from the preoperative visit through recovery. 

Cost and quality focus

The CJR model, implemented in 2018, will continue through Dec. 31, 2020, with approximately 465 Inpatient Prospective Payment System (IPPS) hospitals in 67 different geographical areas with a core urban area population of at least 50,000 participating in the model as of Feb. 1, 2018.4 Medicare beneficiaries remain able to freely choose services and providers.

An episode of care begins with admission of a beneficiary for Medicare Severity Diagnosis Related Groups (MS-DRGs) 469 and 470 (major joint replacement or reattachment of lower extremity with or without major complications or comorbidities) and ends 90 days after discharge, including all related services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries.

At the end of each performance year, actual spending for each episode of care is compared to the Centers for Medicare & Medicaid Services (CMS) target episode price. Depending on the hospital’s quality and spending performance, the hospital may receive an additional bonus payment or be required to repay CMS. During performance year 1, benchmark prices for episodes of care used to calculate target prices for participating hospitals were based on the hospital’s historical spending on lower extremity joint replacements with the goal of moving toward target prices based solely on regional pricing for performance years 4 and 5. Table 1 displays historical regional standardized payment amounts used to gauge target prices for episodes of care from Jan. 1 to Sept. 30, 2018.



The CJR Composite Quality Score rates participating facilities between 0 and 20 and is composed of three quality measures of patient care with complication rate most considerably weighted as illustrated in Table 2:

• Total knee and hip arthroplasty complication measure: The publicly reported risk-standard complication rate, determined by CMS based on other hospitals across the nation, is ordered into performance deciles. These results are available online through Hospital Compare at medicare.gov/hospitalcompare.
• HCAHPS survey measure: The average score on the CMS patient experience survey questionnaire, excluding the pain management question, is graded against all other hospitals across the nation and ranked into performance deciles.
• Patient-reported outcomes (PRO) and risk variable data submission: Full points are awarded if a minimum number of patient-reported outcomes are entered through the CJR web portal.

Composite scores fall in a category along the continuum of below acceptable to excellent. Below acceptable facilities forfeit any reconciliation amount and face the maximum Medicaid penalty of 3% per episodes of care, whereas on the other end of the spectrum, excellent facilities are eligible to receive reconciliation payment or a penalty halved to 1.5% for owed amounts.

Preliminary results

Providers are eligible to earn reconciliation payments if actual episode spending is below the target price for each performance year while achieving the minimum composite quality score. Finalized provider payment amounts for performance year 1 are reported in Table 3. Repayments to Medicare are not required until performance year 2. However, CMS adjusted net model payments during performance year 1 for providers who achieved actual spending below target pricing.

As of March 1, 2018, preliminary results for performance year 2 (Jan. 1, 2017 to Dec. 31, 2017) report an average initial reconciliation payment earned per episode of $929.31 for 100,497 initial episodes of care, which is subject to change until the final report in late Spring 2019.5

In a preliminary analysis of performance year 1 for lower extremity joint replacements, Medicare beneficiaries covered by the CJR model had a significantly reduced rate of discharge to post-acute care facilities by 2.9 percentage points as compared to the control group average of 33.7%.6 Additionally, Medicare spending in the post-acute care setting declined by an average of $307 per episode. However, after accounting for bonuses to participating hospitals in the CJR model, no statistically significant difference in total Medicare spending was reported.

A second analysis comparing the CJR model’s broad definition of an episode of care extending 90 days after hospital discharge to a clinically narrow definition by Hospital Compare reported a small difference in the average payment between the two definitions with a mean difference of $452.7 The strong correlation between both definitions of an episode of care suggests that hospital performance will be consistent in the context of joint replacement bundled payments despite a broader definition of an episode of care.

Implications for orthopedic surgeons

For orthopedic surgery, reimbursement has the potential to be solely performance-based rather than the traditional fee-for-service model with focus on quality and cost. With an increase in focus on efficiency and outcomes, surgeons will be required to participate more closely in administrative decision-making and development of evidence-based quality clinical care guidelines.8 Well-defined performance metrics must be developed that reflect quality measures defined by CMS, and priority should be placed on reducing costs that do not add value to care.

In performance year 1, 48% of CJR hospitals achieved episodes of savings. When compared with non-saving hospitals based on organizational characteristics and baseline performance measures, saving hospitals were large with a mean of 301 hospital beds and high-volume centers with a mean of 216.9 annual Medicare joint replacements.9 Saving hospitals were also more likely to be nonprofit or teaching facilities and integrated with post-acute care facilities. Complexity and severity of case mix did not differ by saving groups. A similar baseline quality of care was reported between saving and non-saving hospitals, but saving hospitals had lower baseline spending.

Current major expenses associated with joint replacements include implant cost, in-hospital length of stay, perioperative complications, readmissions and discharge to inpatient rehabilitative services.10 As a result, orthopedic surgeons have placed major focus on reducing length of stay and inpatient rehabilitation services to improve efficiency and decrease costs. A lower cost of care will likely establish a more competitive market within which hospital facilities can sustain charging a lower cost compared to regional competitors while benefitting from financial gains when actual expenditures are less than initial CMS target pricing. On the other hand, potential risks place burden on smaller hospitals with fewer resources to succeed in a competitive market that may suffer from actual expenditures exceeding the target price for their region. This could spark a transition away from joint replacements performed at small, low-volume centers to larger, multidisciplinary care centers.11

Future considerations

Apparent benefits to Medicare beneficiaries include improved coordination and quality of care, while the community benefits from a reduction in costs from a common, resource-intensive procedure. However, providers and facilities will be burdened with financial stewardship of CMS dollars provided by CMS with expectations to maintain or improve the current quality of care.

In quality assessment outcomes, considerable data on physician performance will be gathered as hospitals continue to take further financial risk. Once incentives and penalties faced by CJR-model-participating facilities are increased and become mandatory, effects on quality, volume of patients treated and case mix of patients treated must continue to be closely observed.

It will become more crucial to track key performance measures for providers to understand factors influencing financial performance and to anticipate target price fluctuations based on estimated patient mix.12 As physicians identify key factors that influence decision-making for episodes of care and site selection, performance data analytics can be used to establish a model for monitoring quality of care. Suggested measures for current orthopedic surgeons to optimize outcomes under the CJR model include the following recommendations:13,14

• Patient selection with careful weight of risks and benefits for high-risk surgical candidates
• Preoperative counseling with management of patient expectations of surgical outcomes and outlining clear and achievable goals
• Attention to modifiable risk factors such as tobacco use and BMI above 40 kg/m2
• Preemptive analgesia and adequate pain control in the postoperative setting
• Implementation of rapid rehabilitation protocols and possible outpatient management
• Optimization of post-acute care stay and recovery length. 

 
A few high-volume joint replacement centers are studying the feasibility of total lower extremity joint arthroplasty at outpatient surgery facilities for appropriately selected patients to improve patient satisfaction and lower costs.15 Protocols were initiated with a goal of reducing length of stay until one night becomes routine before progressing to same-day discharge. With an increasingly competitive market, there will likely be a transition from low-volume surgeons performing arthroplasty in favor of high-volume surgeons at larger facilities to facilitate lower baseline spending.

Notes:

1. “Comprehensive care for joint replacement model.” Centers for Medicare & Medicaid Services. Available from: bit.ly/1PwKlnw.
2. Bashinskaya B, Zimmerman RM, Walcott BP, et al. “Arthroplasty utilization in the United States is predicted by age-specific population groups.” ISRN Orthop. 2012; 1-8.
3. CMS.
4. Ibid.
5. Ibid.
6. Finkelstein A, Ji Y, Mahoney N, et al. “Mandatory Medicare bundled payment program for lower extremity joint replacement and discharge to institutional postacute care.” JAMA. 2018;320(9):892-900.
7. Ellimoottil C, Ryan A, Hou H, et al. “Implications of the definition of an episode of care used in the comprehensive care for joint replacement model.” JAMA Surg. 2017;152(1):49-54.
8. Hogan CA, Sandoval MF, Uhler LM. “Centers for Medicare & Medicaid Services’ comprehensive care for joint replacement: The present and future for orthopedic surgeons.” Orthopedics. 2017;40(2):77-80.
9. Navathe AS, Liao JM, Shah Y, et al. “Characteristics of hospitals earning savings in the first year of mandatory bundled payment for hip and knee surgery.” JAMA. 2018;319(9):930-932.
10. Clair AJ, Evangelista PJ, Lajam CM, et al. “Cost analysis of total joint arthroplasty readmissions in a bundled payment care improvement initiative.” J Arthroplasty. 2016;31(9):1862-1865.
11. Halawi MJ, Greene K, Barsoum WK. “Optimizing outcomes of total joint arthroplasty under the comprehensive care for joint replacement.” Am J Orthop. 2016;45(2):E112-113.
12. Korol S. “2 keys to BPCI Advanced success — data and analytics.” Becker’s Hospital Review. May 31, 2018. Available from: bit.ly/2V3crMH.
13. Halawi, et al.
14. Banerjee S, Hamilton WG, Khanuja HS. “Outpatient lower extremity total joint arthroplasty: Where are we heading?” Orthopedics. 2017;40(2):72-75.
15. Ibid.