Did Exiting Medicare’s Bundled Program Cost Rothman?

When Medicare moved the reimbursement goalposts for total hip (THA) and knee arthroplasty (TKA), the Rothman Orthopaedic Institute withdrew from the Bundled Payments for Care Improvement – Advanced. A team of the facility’s researchers set out to determine if this meant a drop in the quality of their service.

Their work, “Life After BPCI: High Quality Total Knee and Hip Arthroplasty Care Can Still Exist Outside of a Bundled Payment Program,” appears in the July 2022 edition of The Journal of Arthroplasty.

Co-author P. Maxwell Courtney, M.D. associate professor of orthopedic surgery at the Rothman Orthopaedic Institute at Thomas Jefferson University in Philadelphia, explained the study to OTW: “We at Rothman have been innovators in value-based care, participating in bundled payment models with Medicare since 2015.”

“In a typical, fee-for-service model for total hip and knee replacements, each provider bills the insurance company for their services, from the surgeon, the hospital, the physical therapist, and the rehabilitation facility, with minimal coordination of care. In order to cut costs, Medicare developed bundled payment programs to provide for one payment for all of the care of the patient over a 90-day period.”

“Early on in our experience, bundled payments for THA and TKA were widely successful, helped reduce our readmission rate, sent a large majority of our patients home—and not to a rehabilitation facility—and allowed us to perform many procedures at low-cost, outpatient centers.”

But then Medicare changed the rules.

“When Medicare developed a new program in 2020 (Bundled Payments for Care Improvement – Advanced), they changed the methodology for how they calculated their reimbursement price,” added Dr. Courtney. “Despite being in the top 10% of the country in all of our outcome metrics, our practice lost millions of dollars and had to withdraw from the bundled payment program with Medicare.”

The team decided to consider surgeries from January 1, 2020, to March 30, 2021 (after the withdrawal from the Medicare program). The researchers looked at 2,737 primary TKA and 2,009 primary THA patients, comparing them to 1,203 TKA and 1,088 THA patients whose procedures were done while the facility was still part of the Medicare bundled payment plan.

Patients who underwent TKA after the bundle departure had a shorter length of stay (1.4 vs 1.8 days). TKA and THA patients were significantly less likely to be discharged to a rehabilitation facility (5.6% vs 19.2% and 6.0% vs 10.0%, respectively). After controlling for confounding variables, the team found that those undergoing post-bundle TKAs had lower complications but experienced no difference in 90-day readmission.

“We wanted to report our data in the year following our exit from the Bundled Payments for Care Improvement – Advanced and found that we are still providing quality hip and knee care, despite no longer participating in the Medicare bundle,” stated Dr. Courtney to OTW. We hope that policy makers can look at our experience and appropriately incentivize practices to enroll in value-based care models and not penalize surgeons for providing quality care.”