Bundled payments are helping lower overall healthcare costs, with joint replacement bundles saving about $1,000 per patient annually, according to a second annual report on the model from the Lewin Group.
The model, Comprehensive Care for Joint Replacement (CJR), was implemented mid-2016 by the Centers or Medicare and Medicaid Services Innovation Center (CMMI) and is part of CMS’ overall strategy to leverage alternative payment models (APMs) to provide higher quality care at a lower cost. The CJR model rewards participating hospitals for lowering costs for a 90-day episode of care and improving quality with better patient outcomes through care coordination with all providers. Conversely, hospitals are penalized for higher costs or poor care.
The report looked at the first two years of performance for the model, which was mandatory for nearly all hospitals in 67 geographic locations. Overall, the CJR model saved Medicare an estimated $17.4 million after reconciliation payment paid to participating hospitals were accounted for, according to the report, though other estimates range from a net loss of $41.2 million to savings of nearly $76 million. The savings estimate figures are so wide-ranging due to uncertainty around reduction in episode payments.
During the first two performance years, payments were $997 less for CJR episodes compared to a control group. The results are about 3.7% from CJR baseline payments, according to the report.
The savings were mostly due to a shift away from high-cost care settings. For example, CJR patients were more likely to spend fewer days in a skilled nursing facility compared to control group patients and fewer patients from CJR hospitals were discharged to an inpatient rehab facility.
At the same time, quality of care was maintained, the report found, using readmission rate, emergency department visits and mortality as quality measurements.
The CJR model is among CMS APMs, but the agency has been slow to reveal new models since the Trump administration came into power. Still, CMS could put forth new APMS, but will most likely make them voluntary.