Bundled Payments Are Here

The Center for Medicare and Medicaid Services innovation center has started something new- mandatory testing for bundled payment of knee replacement services starting in January 2016 and ending on December 31st, 2020 in 75 cities around the country. Click here for PDF of cities.

horse-194999_640The Comprehensive Care for Joint Replacement model (CCJR) proposes saving money by lumping all payments for an entire episode of care (hospital admission, procedure and services through a 90 period following surgery) into one payment made to the hospital. Hospitals will be responsible for partnering with other entities (MD’s skilled nursing facilities, Home Health Agencies, physical therapy clinics etc.) to bring down overall costs while improving care.

According to the rule proposal, CMS expects the CCJR Model to improve patient care “by improving the coordination and transition of care, improving the coordination of items and services paid for through Medicare Fee-For-Service (FFS), encouraging more provider investment in infrastructure and redesigned care processes for higher quality and more efficient service delivery, and incentivizing higher value care across the inpatient and post-acute care spectrum spanning the episode of care, ” and simultaneously to lower costs. Has anyone seen a unicorn lately, right and I haven’t seen any government programs that lower cost and improve quality either.

Ultimately, hospitals will be rewarded with a share of the cost savings or forced to payback money to Medicare if they exceed costs.

This is euphemistically called value-based care and represents a tectonic shift in the current healthcare model. For the first time, health care entities will be incentivized for withholding care and/or cannibalizing the services of other healthcare practitioners’ or entities. Given man’s natural tendency toward greed this cannot be deemed a step forward for the future of knee replacement quality of care.

But Wait The Government Is Here To Protect You

Of course CMS would object to this statement because they have created so-called protections that would safeguard Medicare and Medicaid recipients.

The Audit

CMS proposes to use their authority, if necessary, to audit participant hospitals if claims analysis indicates an inappropriate change in delivered services.

Quality Measures

CMS proposes a complication measure, readmission measure, and a patient experience survey measure for the CCJR model. These measures will assess the priorities of safer care, transitions of care and effective communication and engagement of patients in their care, respectively.

Public Display of Quality Measures

CMS proposes the public display of measure results as an important way to educate the public on hospital performance and increase the transparency of the model.

In Reality

There are lots of ways for the quality of care to decline. The problem with these safeguards is that complications and readmissions are already very low, and secondly the patient experience survey is limited to data from the hospital only.

Risks To Patients

The monstrous 500-page proposal includes several other words of caution regarding what could go possibly go wrong for patients. You can read that proposal here if you have about 5-7 spare hours on a lazy Sunday afternoon and some aspirin tablets lying around.

Lack of Choipiranhas-123287_640ce

In the governments own words…

”We believe that existing Medicare provisions can be effective in protecting beneficiary freedom of choice and access to appropriate care under the CCJR model. However, because the CCJR model is designed to promote efficiencies in the delivery of all care associated with lower extremity joint replacement procedures, providers may seek greater control over the continuum of care and, in some cases, could attempt to direct beneficiaries into care pathways that save money at the expense of beneficiary choice or even beneficiary outcomes. As such, we acknowledge that some additional safeguards may be necessary under the CCJR model as providers are simultaneously seeking opportunities to decrease costs and utilization. We believe that it is important to consider any possibility of adverse consequences to patients and to ensure that sufficient controls are in place to protect Medicare beneficiaries receiving lower extremity joint replacement related services under the CCJR model.”

Potential Dumping of Complex Patients

In the governments own words…

“Given that participant hospitals would receive a reconciliation payment when they are able to reduce average costs per case and meet quality thresholds, they could have an incentive to avoid complex, high cost cases by referring them to nearby facilities or specialty referral centers. “

Potential for Decrease Quality of Care

In the governments own words…

“As was noted previously, in any payment system that  promotes efficiencies of care delivery, there may be opportunities to direct patients say from more expensive services at the expense of outcomes and quality.”

Potential Delay of Treatment

In the governments own words…

“This model is based in part on an incentive for hospitals to create efficiencies in the delivery of care within a 90-day episode following the joint replacement surgery. Theoretically this basis could create incentives for hospitals and other CCJR collaborators involved in any CCJR Sharing Arrangements to delay services until after that window has closed.”

The Bottom Line

Is seems curious that replacement surgeries currently performed at very high levels of efficiency and effectiveness in this country would be so targeted by CMS. CMS states that this effort is about improving care and saving money.arrow-394145_640

Remember the learning curve back in high school? Out on the edges of the curve, small levels of improvement are only achieved with high cost.

The cost in this case is massive government intervention and all the fallout that entails. In the form of unintended consequences. Will these small levels of improvement be worth it for patients and healthcare workers alike?

Secondly, if you read through to the end of the proposal, CMS projects that costs of replacements over 5 years for the 75 cities will be 12, 321,000,000. And are you ready for this? The savings over 5 years is estimated at 153 million. Ouch, only 1.2%. This can not be about cost savings.

So What Is This Really All About?

I am going to go out on a limb here and predict what I think this project is all about.

wave-11061_640I have written previously about the Tsunami of coming surgeries as a result of aging baby boomers (see article). At some point rationing will begin. Hidden away in the midst of this project, is an interesting request for hospitals to collect data 90 days pre-surgery and one-year post surgery on every patient’s functional abilities. The hospitals will benefit financially from collecting this data in the form of high reimbursements and so are likely to comply.

Forgive me for being skeptical, but the outcome data is needed to assess definitively who fails to benefit from a functional standpoint and ultimately who gets care denied.

Instead of attaining the elusive and dubiously achievable twin goals of better care with less cost, they will be creating the actuarial tables for denial and in the process overlaying more bureaucracy and oversight, including the power of the audit, on an already burdened system. This will increase the likelihood that excellent surgeons and caregivers will retire without talented replacements in the waiting.

Seriously what surgeon wants to spend 1/3 of his life training just to become an employee of corporate America?

The other major result of this proposal as it rolls out across the entire country will be many smaller hospitals now offering the surgery will stop doing so because of the possible penalties involved leaving only the larger centers of excellence to do the job.

Whle this may seem attractive to achieve higher quality, having less choice on where to have the surgery, having to travel farther or wait longer because capacity has shrunk are not positives at all.

Big hospitals end up with monopolies and inevitably quality starts to decline soon after all competition has been eliminated.


Michelle, PT
Michelle, PT

Michelle Stiles called "the no nonsense" therapist, by her patients, created a company called Cowboy Up Recovery after recognizing the bankruptcy of the present medical model. Too many people regard conventional medical wisdom as gospel, ignoring the subversive influences of Big Pharma and Big Medicine. She believes, Americans in general are being trained from an early age to defer to experts in numerous areas of life and losing the impulses for self-responsibility and self-reliance in the process. Over-diagnosis and over-medicating has become endemic. While thankful for the best miracles of modern medicine, she encourages people of all persuasions to listen to their bodies and seek out answers to maintain not just an absence of disease but optimal health. Her advice is: Cowboy Up, no one cares more about your health than you do.

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