Axios has published a report that examines how “an overhaul of how Medicare pays hospitals for joint replacements could pare hundreds of millions of dollars in program spending while getting facilities to pay closer attention to the cost and quality of care.”
The report was prompted by CMS’ expansion of a pilot program that bundles payments for hip, knee, and ankle replacements to “incentivize providers to manage their spending.” It states that the pilot, which ran from 2016 through 2024 in selected regions, “generated more than $112 million in its sixth and seventh years,” with the recent expansion of the program “projected to save $725 million over five years.”
Reports Axios, “Starting in 2028, Medicare will set spending targets for post-surgical care and other services delivered for 90 days after an operation. Hospitals that spend less will get paid the difference. Those that spend more have to pay Medicare back. Quality measures will also affect how much a hospital pays.”
“At a time when policymakers are rightly focused on bringing down health care costs, increasing reliance on mandatory models represents a step in the wrong direction,” Charlene MacDonald, CEO of the Federation of American Hospitals, told Axios. Ashley Thompson, senior vice president for policy at the American Hospital Association, told the outlet that the program’s structure will require hospitals to meet “progressively lower spending targets over time,” and that it “risks turning a care improvement model into a permanent payment cut for hospitals.”
Read the full report, “Hospitals on the hook for joint replacement costs,” here.
