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Mandatory Medicare Bundled Payment Program for Lower Extremity Joint Replacement and Discharge to Institutional Postacute CareInterim Analysis of the First Year of a 5-Year Randomized Trial

Educational Objective
To learn whether a mandatory bundled payment program altered hospital spending.
1 Credit CME
Key Points

Question  What was the change in discharge to institutional postacute care after lower extremity joint replacement episodes among Medicare beneficiaries following implementation of the Comprehensive Care for Joint Replacement (CJR) bundled payments in 2016?

Findings  In this interim analysis of the first year of a 5-year randomized trial of 75 metropolitan statistical areas (MSAs) that were assigned the bundled payment model and 121 control MSAs that were not, the mean percentage of patient discharges to institutional postacute care was 33.7% in the control group and was 2.9 percentage points lower in MSAs covered by the CJR model, a significant difference.

Meaning  These interim findings suggest that CJR may reduce institutional postacute care following lower extremity joint replacement episodes among Medicare beneficiaries, although further evaluation is needed as the program is fully implemented over time.

Abstract

Importance  Bundled payments are an increasingly common alternative payment model for Medicare, yet there is limited evidence regarding their effectiveness.

Objective  To report interim outcomes from the first year of implementation of a bundled payment model for lower extremity joint replacement (LEJR).

Design, Setting, and Participants  As part of a 5-year, mandatory-participation randomized trial by the Centers for Medicare & Medicaid Services, eligible metropolitan statistical areas (MSAs) were randomized to the Comprehensive Care for Joint Replacement (CJR) bundled payment model for LEJR episodes or to a control group. In the first performance year, hospitals received bonus payments if Medicare spending for LEJR episodes was below the target price and hospitals met quality standards. This interim analysis reports first-year data on LEJR episodes starting April 1, 2016, with data collection through December 31, 2016.

Exposure  Randomization of MSAs into the CJR bundled payment model group (75 assigned; 67 included) or to the control group without the CJR model (121 assigned; 121 included). Instrumental variable analysis was used to evaluate the relationship between inclusion of MSAs in the CJR model and outcomes.

Main Outcomes and Measures  The primary outcome was share of LEJR admissions discharged to institutional postacute care. Secondary outcomes included the number of days in institutional postacute care, discharges to other locations, Medicare spending during the episode (overall and for institutional postacute care), net Medicare spending during the episode, LEJR patient volume and patient case mix, and quality-of-care measures.

Results  Among the 196 MSAs and 1633 hospitals, 131 285 eligible LEJR procedures were performed during the study period (mean volume, 110 LEJR episodes per hospital) among 130 343 patients (mean age, 72.5 [SD, 0.91] years; 65% women; 90% white). The mean percentage of LEJR admissions discharged to institutional postacute care was 33.7% (SD, 11.2%) in the control group and was 2.9 percentage points lower (95% CI, −4.95 to −0.90 percentage points) in the CJR group. Mean Medicare spending for institutional postacute care per LEJR episode was $3871 (SD, $1394) in the control group and was $307 lower (95% CI, −$587 to −$27) in the CJR group. Mean overall Medicare spending per LEJR episode was $22 872 (SD, $3619) in the control group and was $453 lower (95% CI, −$909 to $3) in the CJR group, a statistically nonsignificant difference. None of the other secondary outcomes differed significantly between groups.

Conclusions and Relevance  In this interim analysis of the first year of the CJR bundled payment model for LEJR among Medicare beneficiaries, MSAs covered by CJR, compared with those that were not, had a significantly lower percentage of discharges to institutional postacute care but no significant difference in total Medicare spending per LEJR episode. Further evaluation is needed as the program is more fully implemented.

Trial Registration  ClinicalTrials.gov Identifier: NCT03407885; American Economic Association Registry Identifier: AEARCTR-0002521

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Article Information

Corresponding Author: Amy Finkelstein, PhD, Department of Economics, Massachusetts Institute of Technology, 77 Massachusetts Ave, Bldg E52, Room 442, Cambridge, MA 02139 (afink@mit.edu).

Accepted for Publication: August 2, 2018.

Author Contributions: Ms Ji and Dr Skinner had full access to all the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: Finkelstein, Mahoney.

Acquisition, analysis, or interpretation of data: All authors.

Drafting of the manuscript: Finkelstein, Mahoney.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: All authors.

Obtained funding: Finkelstein, Mahoney, Skinner.

Administrative, technical, or material support: All authors.

Supervision: Finkelstein, Mahoney.

Conflict of Interest Disclosures: All authors have completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest. Dr Skinner reports that he is an investor in Dorsata Inc, a clinical pathway software startup, and a consultant to Sutter Health Inc. No other disclosures were reported.

Funding/Support:J-PAL North America and the National Institute on Aging (grant P01AG019783-15) provided research support.

Role of the Funder/Sponsor: The funders had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; or decision to submit the manuscript for publication.

Data Sharing Statement: See Supplement 2.

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