The Centers for Medicare and Medicaid Services (CMS) has extended bundled pricing for hip and knee replacements for three years.
The final rule, published in the Federal Register, extends the “Comprehensive Care for Joint Replacement” cost-bundling program through Dec. 21, 2024. The cost-cutting program began in January 2016, when CMS required all hospitals in 67 geographic areas to accept bundled payments for hip and knee replacements from hospital admission to 90 days after discharge.
Unlike traditional fee-for-service payments, bundled payments provide a single, fixed payment for a procedure and follow-up care rather than individually paying all parties separately. Under the model, hospitals in the selected cities received bonuses or penalties depending on how much they spent on follow-up care 90 days after joint replacement patients were discharged.
The final rule, proposed in February 2020, excludes rural and low-procedure-volume hospitals and those who volunteered to participate in the earlier version of the program. It expands coverage to include both inpatient and outpatient total knee arthroplasty and total hip arthroplasty but does not extend coverage for those procedures to ambulatory surgery centers. It goes into effect on Oct. 1, 2021, following two pandemic-related extensions of the existing model.
AdvaMed supports the coverage expansion to hospital-based outpatient programs but had asked the agency to begin the new three-year extension on Jan. 1, 2022, to give hospitals more time to transition to performing elective procedures on patients who may have COVID-19. The trade group also objected to the proposal to exclude rural, low-volume and voluntary hospitals, noting that these hospitals have invested in infrastructure because they expected to continue participating in bundled payment programs. Omitting these hospitals could also reduce potential Medicare savings, the group noted.
AdvaMed spokesman Jim Jeffries told Medical Design & Outsourcing that its member companies have supported the bundled-payment model for joint replacement since the program’s inception. The group declined to immediately comment on the final rule until staff members have had a chance to discuss the technical changes with company representatives.
CMS estimates that the changes made in the final rule will save the Medicare program approximately $217 million over the additional three years.