How Does the Effect of the Comprehensive Care for Joint Replacement Model Vary Based on Surgical Volume and Costs of Care?

Abstract

Background: The Center for Medicare and Medicaid Innovation revised the comprehensive Care for Joint Replacement (CJR) program, a mandatory 90-day bundled payment for lower extremity joint replacement, in December 2017, retaining 34 of the original 67 metropolitan statistical areas with higher volume and historic episode payments.

Objectives: We describe differences in costs, quality, and patient selection between hospitals that continued to participate compared with those that withdrew from CJR before and after the implementation of CJR.

Research design: We used a triple difference approach to compare the magnitude of the policy effect for elective admissions between hospitals that were retained in the CJR revision or not, before and after the implementation of CJR, and compared with hospitals in nonparticipant metropolitan statistical areas.

Subjects: 694,275 Medicare beneficiaries undergoing elective lower extremity joint replacement from January 1, 2013 to August 31, 2017.

Measures: The treatment effect heterogeneity of CJR.

Results: Hospitals retained in the CJR policy revision had a greater reduction in 90-day episode-of-care cost compared with those that were allowed to discontinue (-$846, 95% CI: -$1,338, -$435) and had greater cost reductions in the more recent year (2017). We also found evidence that retained CJR hospitals disproportionately reduced treating patients who were older than 85 years.

Conclusions: Hospitals that continued to participate in CJR after the policy revision achieved a greater cost reduction. However, the cost reductions were partly attributed to avoiding potential higher - cost patients, suggesting that a bundled payment policy might induce disparities in care delivery.