Skilled Nursing Facility Partnerships May Decrease 90-Day Costs in a Total Joint Arthroplasty Episode Under the Bundled Payments for Care Improvement Initiative

Abstract

Background: The Bundled Payments for Care Improvement initiative was developed to reduce costs associated with total joint arthroplasty through a single payment for all patient care from index admission through a 90-day post-discharge period, including care at skilled nursing facilities (SNFs). The aim of this study is to investigate whether forming partnerships between hospitals and SNFs could lower the post-discharge costs. We hypothesize that institutionally aligned SNFs have lower post-discharge costs than non-aligned SNFs.

Methods: A cohort of 615 elective, primary total hip and knee arthroplasty subjects discharged to an SNF under the Bundled Payments for Care Improvement from 2014 to 2016 were included in our analysis. Patients were grouped into one of the 3 categories of SNF alignment: group 1: non-partners; group 2: agreement-based partners; group 3: institution-owned partners. Demographics, comorbidities, length of stay (LOS) at SNF, and associated costs during the 90-day post-operative period were compared between the 3 groups.

Results: Mean index hospital LOS was statistically shortest in group 3 (mean 2.7 days vs 3.5 for groups 1 and 2, P = .001). SNF LOS was also shortest in group 3 (mean 11 days vs 19 and 21 days in groups 2 and 1 respectively, P < .001). Total SNF costs and total 90-day costs were both significantly lower in group 3 compared with groups 1 and 2 (P < .001 for all), even after controlling for medical comorbidities.

Conclusion: Institution-owned partner SNFs demonstrated the shortest patient LOS, and the lowest SNF and total 90-day costs, without increased risk of readmissions, compared with other SNFs.

Keywords: bundled payments for care improvement; cost; hip; knee; partnership; reimbursement; skilled nursing facility; total joint arthroplasty.