Are Medicare's "Comprehensive Care for Joint Replacement" Bundled Payments Stratifying Risk Adequately?

BACKGROUND: Bundled payments are meant to reduce costs and improve quality of care. Without adequate risk adjustment, bundling may be inequitable to providers and restrict access for certain patients. This study examines patient factors that could improve risk stratification for the Comprehensive Care for Joint Replacement (CJR) bundled-payment program. METHODS: Ninety-five thousand twenty-four patients meeting the CJR criteria were retrospectively reviewed using administrative Medicare data. Multivariable regression was used to identify associations between patient factors and traditional (fee-for-service) Medicare reimbursement over the bundle period. RESULTS: Average reimbursement was $18,786 ± $12,386. Older age, male gender, cases performed for hip fractures, and most comorbidities were associated with higher reimbursement (P < .05), except dementia (lower reimbursement; P < .01). Stratification incorporating these factors displayed greater accuracy than the current CJR risk adjustment methods (R2 = 0.23 vs 0.17). CONCLUSION: More robust risk stratification could provide more equitable reimbursement in the CJR program. LEVEL OF EVIDENCE: Large database analysis; Level III.

Should All Orthopaedists Perform Hemiarthroplasty for Femoral Neck Fractures? A Volume-Outcome Analysis.

OBJECTIVES: To determine whether very low surgeon and hospital hip arthroplasty volumes are associated with unfavorable outcomes after hemiarthroplasty for femoral neck fractures. METHODS: Patients ≥60 years of age and who underwent hemiarthroplasty for femoral neck fracture were identified in the New York Statewide Planning and Research Cooperative System data from 2001 to 2015. Incidence of inpatient mortality and postoperative complications were compared across both surgeon and hospital volume using multivariable Cox proportional hazards regression, adjusting for clinical and demographic factors. RESULTS: Fifty eight thousand eight hundred fourteen patients were included. Low surgeon volume (1 case/year) was associated with increased complications [hazard ratio (HR) 1.35, 95% CI, 1.26-1.44, P < 0.0001), including dislocations (HR 1.31 95% CI, 1.04-1.65, P = 0.02) and several medical complications (P = 0.003) compared with surgeons performing at least 2 hip arthroplasties/year. Low hospital volume (<20 cases/year) was associated with increased complications (HR 1.11, 95% CI, 1.02-1.20, P = 0.02), including deep infections (HR 1.39, 95% CI, 1.02-1.89, P = 0.04) and certain medical complications (P = 0.02) compared with centers performing at least 50 hip arthroplasties/year. Hospital and surgeon volume were not associated with inpatient mortality (P = 0.98) or reoperations (P = 0.40). CONCLUSIONS: Providers who rarely perform hemiarthroplasty for femoral neck fractures should defer these cases to surgeons and hospitals who regularly perform hip arthroplasty. Additional research is needed to further characterize the thresholds for "low volume" and to determine whether there is additional benefit afforded by high-volume surgeons and hospitals (or if it is adequate that providers performing hemiarthroplasty maintain volumes above relatively low thresholds as identified here). LEVEL OF EVIDENCE: Prognostic Level II. See Instructions for Authors for a complete description of levels of evidence.

Refining Risk Adjustment for the Proposed CMS Surgical Hip and Femur Fracture Treatment Bundled Payment Program.

BACKGROUND: The U.S. Centers for Medicare & Medicaid Services (CMS) has been considering the implementation of a mandatory bundled payment program, the Surgical Hip and Femur Fracture Treatment (SHFFT) model. However, bundled payments without appropriate risk adjustment may be inequitable to providers and may restrict access to care for certain patients. The SHFFT proposal includes adjustment using the Diagnosis-Related Group (DRG) and geographic location. The goal of the current study was to identify and quantify patient factors that could improve risk adjustment for SHFFT bundled payments. METHODS: We retrospectively reviewed a 5% random sample of Medicare data from 2008 to 2012. A total of 27,898 patients were identified who met SHFFT inclusion criteria (DRG 480, 481, and 482). Reimbursement was determined for each patient over the bundle period (the surgical hospitalization and 90 days of post-discharge care). Multivariable regression was performed to test demographic factors, comorbidities, geographic location, and specific surgical procedures for associations with reimbursement. RESULTS: The average reimbursement was $23,632 ± $17,587. On average, reimbursements for male patients were $1,213 higher than for female patients (p < 0.01). Younger age was also associated with higher payments; e.g., reimbursement for those ≥85 years of age averaged $2,282 ± $389 less than for those aged 65 to 69 (p < 0.01). Most comorbidities were associated with higher reimbursement, but dementia was associated with lower payments, by an average of $2,354 ± $243 (p < 0.01). Twenty-two procedure codes are included in the bundle, and patients with the 3 most common codes accounted for 98% of the cases, with average reimbursement ranging from $22,527 to $24,033. Less common procedures varied by >$20,000 in average reimbursement (p < 0.01). DRGs also showed significant differences in reimbursement (p < 0.01); e.g., DRG 480 was reimbursed by an average of $10,421 ± $543 more than DRG 482. Payments varied significantly by state (p ≤ 0.01). Risk adjustment incorporating specific comorbidities demonstrated better performance than with use of DRG alone (r = 0.22 versus 0.15). CONCLUSIONS: Our results suggest that the proposed SHFFT bundled payment model should use more robust risk-adjustment methods to ensure that providers are reimbursed fairly and that patients retain access to care. At a minimum, payments should be adjusted for age, comorbidities, demographic factors, geographic location, and surgical procedure.

Sanders II/III Calcaneus Fractures in Laborers: A Cost-Effectiveness Analysis and Call for Effectiveness Research.

OBJECTIVE: This study compares the cost and cost-effectiveness of treatments options for Sanders II/III displaced intra-articular calcaneus fractures (DIACFs) in laborers. METHODS: Literature on Sanders type II and III fractures was reviewed to determine complication rates and utility values for each treatment option. Costs were calculated using Medicare reimbursement and implant prices from our institution. Monte Carlo simulations were used to analyze a decision tree to determine the cost and cost-effectiveness of each treatment from a societal perspective. Sensitivity analysis was performed on all variables. RESULTS: Minimally invasive open reduction internal fixation (ORIF) (sinus tarsi approach with 4 screws alone) was least expensive ($23,329), followed by nonoperative care ($24,530) and traditional ORIF using extensile lateral approach ($27,963) (P < 0.001); this result was most sensitive to time out of work. Available cost-effectiveness data were limited, but our analysis suggests that minimally invasive ORIF is a dominant strategy, and traditional ORIF is superior to nonoperative care (incremental cost-effectiveness ratio $57,217/quality-adjusted life year). CONCLUSIONS: Our findings suggest that minimally invasive ORIF (sinus tarsi approach) is the least expensive option for managing Sanders II/III displaced intra-articular calcaneus fractures, followed by nonoperative care. Our cost-effectiveness results favor operative management but are highly sensitive to utility values and are weakened by scarce utility data. We therefore cannot currently recommend a treatment course based on value, and our primary conclusion must be that more extensive effectiveness research (ie, health-related quality of life data, not just functional outcomes) is desperately needed to elucidate the value of treatment options in this field. LEVEL OF EVIDENCE: Economic Level III. See Instructions for Authors for a complete description of levels of evidence.

Will Medicare Readmission Penalties Motivate Hospitals to Reduce Arthroplasty Readmissions?

BACKGROUND: The Centers for Medicare & Medicaid Services (CMS) recently imposed penalties against hospitals with above-average 30-day readmission rates following total joint arthroplasty (TJA). Hospitals must decide whether investments in readmission prevention are worthwhile. This study examines the financial incentives associated with unplanned readmissions before and after invocation of these penalties. METHODS: Financial data were reviewed for 2028 consecutive primary TJAs performed on Medicare beneficiaries over a 2-year period at an urban academic health system. Readmission penalties were estimated in accordance with CMS policies. RESULTS: Unplanned readmissions generated a $4416 median contribution margin. The initial hospitalizations (when the TJA was performed) were financially unfavorable for patients subsequently readmitted relative to those not readmitted due to increased costs of care (P = .002), but these costs were more than outweighed by the increased reimbursement earned during the readmission (P < .001), ultimately making readmitted patients financially preferable (P < .001). Going forward, penalties will be levied for risk-adjusted readmission rates above the national rate of 4.8%. For the institution under review, the penalty per readmission outweighs the financial gains earned through readmission by $12,184, resulting in a net loss from readmissions if the rate exceeds 6.5%. It will be financially optimal to maintain a readmission rate (after risk adjustment) equal to the national average but exceeding that rate will be $7768 more expensive per readmission than undershooting that target. CONCLUSION: If our results are generalizable, unplanned Medicare readmissions have traditionally been financially beneficial, but CMS penalties outweigh this benefit. Thus, penalties should incentivize institutions to maintain below-average arthroplasty readmissions rates.

Risk Factors for Infection After Knee Arthroscopy: Analysis of 595,083 Cases From 3 United States Databases.

PURPOSE: To identify and quantify patient- and procedure-related risk factors for post-arthroscopic knee infections using a large dataset. METHODS: An administrative health care database including 8 years of records from 2 large commercial insurers and Medicare (a 5% random sample) was queried to identify all knee arthroscopies performed on patients aged at least 15 years using Current Procedural Terminology (CPT) codes. Each CPT code was designated as a high- or low-complexity procedure, with the former typically requiring accessory incisions or increased operative time. Deep infections were identified by a CPT code for incision and drainage within 90 days of surgery. Superficial infections were identified by International Classification of Diseases, Ninth Revision infection codes without any record of incision and drainage. Patients were compared based on age, sex, body mass index, tobacco use, presence of diabetes, and Charlson Comorbidity Index. RESULTS: A total of 526,537 patients underwent 595,083 arthroscopic knee procedures. Deep postoperative infections occurred at a rate of 0.22%. Superficial infections occurred at a rate of 0.29%. Tobacco use and morbid obesity were the largest risk factors for deep and superficial infections, respectively (P < .001; relative risk of 1.90 and 2.19, respectively). There were also higher infection rates among patients undergoing relatively high-complexity arthroscopies, men, obese patients, diabetic patients, and younger patients (in order of decreasing relative risk). Increased Charlson Comorbidity Index was associated with superficial and total infections (P < .001). CONCLUSIONS: Post-arthroscopic knee infections were more frequent among morbidly obese patients, tobacco users, patients undergoing relatively complex procedures, men, obese patients, diabetic patients, relatively young patients, and patients with increased comorbidity burdens in this study population. This knowledge may allow more informed preoperative counseling, aid surgeons in patient selection, and facilitate infection prevention by targeting individuals with higher inherent risk. LEVEL OF EVIDENCE: Level IV, cross-sectional study.

Risk Adjustment for Medicare Total Knee Arthroplasty Bundled Payments.

The use of bundled payments is growing because of their potential to align providers and hospitals on the goal of cost reduction. However, such gain sharing could incentivize providers to "cherry-pick" more profitable patients. Risk adjustment can prevent this unintended consequence, yet most bundling programs include minimal adjustment techniques. This study was conducted to determine how bundled payments for total knee arthroplasty (TKA) should be adjusted for risk. The authors collected financial data for all Medicare patients (age≥65 years) undergoing primary unilateral TKA at an academic center over a period of 2 years (n=941). Multivariate regression was performed to assess the effect of patient factors on the costs of acute inpatient care, including unplanned 30-day readmissions. This analysis mirrors a bundling model used in the Medicare Bundled Payments for Care Improvement initiative. Increased age, American Society of Anesthesiologists (ASA) class, and the presence of a Medicare Major Complications/Comorbid Conditions (MCC) modifier (typically representing major complications) were associated with increased costs (regression coefficients, $57 per year; $729 per ASA class beyond I; and $3122 for patients meeting MCC criteria; P=.003, P=.001, and P<.001, respectively). Differences in costs were not associated with body mass index, sex, or race. If the results are generalizable, Medicare bundled payments for TKA encompassing acute inpatient care should be adjusted upward by the stated amounts for older patients, those with elevated ASA class, and patients meeting MCC criteria. This is likely an underestimate for many bundling models, including the Comprehensive Care for Joint Replacement program, incorporating varying degrees of postacute care. Failure to adjust for factors that affect costs may create adverse incentives, creating barriers to care for certain patient populations. [Orthopedics. 2016; 39(5):e911-e916.].

What Incentives Are Created by Medicare Payments for Total Hip Arthroplasty?

BACKGROUND: Differences in profitability and contribution margin (CM) between various patient populations may make certain patients particularly attractive (or unattractive) to providers. This study seeks to identify patient characteristics associated with increased profit and CM among Medicare patients undergoing total hip arthroplasty (THA). METHODS: The expected Medicare reimbursement for consecutive patients of Medicare-eligible age (65+ years) undergoing primary unilateral elective THA (n = 498) was calculated in accordance with Center for Medicare and Medicaid Services policy. Costs were derived from the hospital's cost accounting system. Profit and CM were calculated for each patient as reimbursement less total and variable costs, respectively. Patients were compared based on clinical and demographic factors by univariate and multivariate analyses. RESULTS: Medicare patients undergoing THA generated negative average profits but substantial positive CMs. Lower profit and CM were associated with higher American Society of Anesthesiologists Physical Status Classification (P < .01, P = .03), older age (P < .01), and longer length of stay (P < .01, P = .03). No association was found with gender, body mass index, or race. CONCLUSION: If our results are generalizable, Medicare patients requiring THA are currently financially attractive, but institutions have a long-term incentive to shift resources to more profitable patients and service lines, which may eventually restrict access to care for this population. THA providers have a financial incentive to favor Medicare patients with younger age, lower American Society of Anesthesiologists Physical Status Classification, and those who can be expected to require relatively short admissions. The Center for Medicare and Medicaid Services must strive to accurately match reimbursement rates to provider costs to avoid inequitable payments to providers and financial incentives discouraging treatment of high-risk patients or other patient subpopulations.

What Financial Incentives Will Be Created by Medicare Bundled Payments for Total Hip Arthroplasty?

BACKGROUND: Bundled payments are gaining popularity in arthroplasty as a tactic for encouraging providers and hospitals to work together to reduce costs. However, this payment model could potentially motivate providers to avoid unprofitable patients, limiting their access to care. Rigorous risk adjustment can prevent this adverse effect, but most current bundling models use limited, if any, risk-adjustment techniques. This study aims to identify and quantify the financial incentives that are likely to develop with total hip arthroplasty (THA) bundled payments that are not accompanied by comprehensive risk stratification. METHODS: Financial data were collected for all Medicare-eligible patients (age 65+) undergoing primary unilateral THA at an academic center over a 2-year period (n = 553). Bundles were considered to include operative hospitalizations and unplanned readmissions. Multivariate regression was performed to assess the impact of clinical and demographic factors on the variable cost of THA episodes, including unplanned readmissions. (Variable costs reflect the financial incentives that will emerge under bundled payments). RESULTS: Increased costs were associated with advanced age (P < .001), elevated body mass index (BMI; P = .005), surgery performed for hip fracture (P < .001), higher American Society of Anaesthesiologists (ASA) Physical Classification System grades (P < .001), and MCCs (Medicare modifier for major complications; P < .001). Regression coefficients were $155/y, $107/BMI point, $2775 for fracture cases, $2137/ASA grade, and $4892 for major complications. No association was found between costs and gender or race. CONCLUSION: If generalizable, our results suggest that Centers for Medicare and Medicaid Services bundled payments encompassing acute inpatient care should be adjusted upward by the aforementioned amounts (regression coefficients above) for advanced age, increasing BMI, cases performed for fractures, elevated ASA grade, and major complications (as defined by Medicare MCC modifiers). Furthermore, these figures likely underestimate costs in many bundling models which incorporate larger proportions of postdischarge care. Failure to adjust for factors affecting costs may create barriers to care for specific patient populations.

What are the economic consequences of unplanned readmissions after TKA?

BACKGROUND: In 2009, the Center for Medicare & Medicaid Services (CMS) began penalizing hospitals with high rates of 30-day readmissions after hospitalizations for certain conditions. This policy will expand to include TKA in 2015. QUESTIONS/PURPOSES: What are the median profits and contribution margins of: (1) Medicare-reimbursed TKA, (2) 30-day TKA readmission, and (3) entire episode of care for readmitted TKA patients within 30 days compared to nonreadmitted patients? (4) Under new CMS guidelines, what financial penalty will the authors' institution face if its arthroplasty readmission rate exceeds the national average? METHODS: A retrospective review of 3218 primary TKAs performed during 2 years at a large urban academic hospital network was conducted using administrative and financial data. RESULTS: The median profit and contribution margins, respectively, were as follows: TKA episode, USD 5209 and USD 11,726; 30-day readmission, USD 608 and USD 3814; TKA visit with readmission, USD 2855 and USD 13,901; TKA visit without readmission, USD 5300 and USD 11,652. Readmission penalties could reach USD 6.21 million per year for the authors' institution. DISCUSSION: If our results are generalizable, unplanned TKA readmissions lead to diminished total profit. Although associated with a positive contribution margin, this is likely to be a short-term phenomenon as the new CMS policy will result in readmissions coming at a steep cost to referral centers.

What is the current status of global health activities and opportunities in US orthopaedic residency programs?

BACKGROUND: Interest in developing national health care has been increasing in many fields of medicine, including orthopaedics. One manifestation of this interest has been the development of global health opportunities during residency training. QUESTIONS/PURPOSES: We assessed global health activities and opportunities in orthopaedic residency in terms of resident involvement, program characteristics, sources of funding and support, partner site relationships and geography, and program director opinions on global health participation and the associated barriers. METHODS: An anonymous 24-question survey was circulated to all US orthopaedic surgery residency program directors (n = 153) by email. Five reminder emails were distributed over the next 7 weeks. A total of 59% (n = 90) program directors responded. RESULTS: Sixty-one percent of responding orthopaedic residencies facilitated clinical experiences in developing countries. Program characteristics varied, but most used clinical rotation or elective time for travel (76%), which most frequently occurred during Postgraduate Year 4 (57%) and was used to provide pediatric (66%) or trauma (60%) care. The majority of programs (59%) provided at least some funding to traveling residents and sent accompanying attendings on all ventures (56%). Travel was most commonly within North America (85%), and 51% of participating programs have established international partner sites although only 11% have hosted surgeons from those partnerships. Sixty-nine percent of residency directors believed global health experiences during residency shape future volunteer efforts, 39% believed such opportunities help attract residents to a training program, and the major perceived challenges were funding (73%), faculty time (53%), and logistical planning (43%). CONCLUSIONS: Global health interest and activity are common among orthopaedic residency programs. There is diversity in the characteristics and geographical locations of such activity, although some consensus does exist among program directors around funding and faculty time as the largest challenges.

Economic viability of geriatric hip fracture centers.

Management of geriatric hip fractures in a protocol-driven center can improve outcomes and reduce costs. Nonetheless, this approach has not spread as broadly as the effectiveness data would imply. One possible explanation is that operating such a center is not perceived as financially worthwhile. To assess the economic viability of dedicated hip fracture centers, the authors built a financial model to estimate profit as a function of costs, reimbursement, and patient volume in 3 settings: an average US hip fracture program, a highly efficient center, and an academic hospital without a specific hip fracture program. Results were tested with sensitivity analysis. A local market analysis was conducted to assess the feasibility of supporting profitable hip fracture centers. The results demonstrate that hip fracture treatment only becomes profitable when the annual caseload exceeds approximately 72, assuming costs characteristic of a typical US hip fracture program. The threshold of profitability is 49 cases per year for high-efficiency hip fracture centers and 151 for the urban academic hospital under review. The largest determinant of profit is reimbursement, followed by costs and volume. In the authors' home market, 168 hospitals offer hip fracture care, yet 85% fall below the 72-case threshold. Hip fracture centers can be highly profitable through low costs and, especially, high revenues. However, most hospitals likely lose money by offering hip fracture care due to inadequate volume. Thus, both large and small facilities would benefit financially from the consolidation of hip fracture care at dedicated hip fracture centers. Typical US cities have adequate volume to support several such centers.

Bipolar sealing in revision total hip arthroplasty for infection: efficacy and cost analysis.

Saline-coupled bipolar sealing has shown mixed results in primary arthroplasty. However, this technology has not been studied in infected revision total hip arthroplasty (THA), where morbidity is higher and conventional methods of blood management, such as cell salvage, often cannot be used. This case-matched study of 76 consecutive revision THA for infection included an experimental bipolar sealing group and a control group of conventional electrocautery. Groups were matched for gender, body mass index, American Society of Anesthesiologists classification, and surgery type. Total blood loss, intraoperative blood loss, and perioperative hemoglobin drop were significantly less in the experimental group. In addition, operative time was significantly shorter in the experimental group, which translated into gross savings approximately equal to the cost of the device. The decreases in total blood loss and perioperative hemoglobin decline, along with financial savings, may support the use of bipolar sealing in infected revision THA.