Medicare on Friday launches an experiment changing how it pays for hip and knee replacements in an effort to raise quality and lower costs. The idea is to follow patients more closely to smooth their recovery and head off unwanted complications that increase costs.
Hip and knee replacements are the most common inpatient surgery for beneficiaries, and Medicare will be using financial rewards and penalties to foster coordination among hospitals, doctors, and rehab centers. Traditional payment for such surgeries has been by tying payment to the volume of procedures. Medicare says that Comprehensive Care for Joint Replacement Model tests bundled payment and quality measurement for an episode of care associated with hip and knee replacements to encourage hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care from the initial hospitalization through recovery.
Hospitals are on board, but orthopedic surgeons have some qualms. Consumer groups will be watching closely.