By Pat Anson, Editor

Hospitals will be held accountable for the cost and quality of care given to Medicare patients who undergo hip and knee replacement surgery under a pilot program by the Center for Medicare and Medicaid Services (CMS).

Hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries. In 2014, there were more than 400,000 such procedures, costing Medicare more than $7 billion for hospitalizations alone. Post-surgery complications such as pain and infection often lead to hospital readmissions and extended recovery periods.

Under the Comprehensive Care for Joint Replacement (CJR) model, the hospital where the surgery takes place will be accountable for all services from the time of the surgery through 90 days after hospital discharge. This “bundling” of payments for hospitals, physicians, physical therapists and other health providers is meant to encourage them to work together to deliver more effective and efficient care.

Depending on the hospital’s quality and cost performance, the hospital will either earn a financial reward or be required to refund Medicare for a portion of the cost.

The quality and cost of care for hip and knee replacement surgeries can vary greatly. Currently the average Medicare expenditure for surgery, hospitalization, and recovery ranges from $16,500 to $33,000 across geographic areas. The rate of complications from infections or implant failures can be more than three times higher at some facilities than others.

“Incentives to coordinate the whole episode of care – from surgery to recovery – are not strong enough, and a patient’s health may suffer as a result,” CMS said in a statement. “When approaching care without seeing the big picture, there is a risk of missing crucial information or not coordinating across different care settings. This approach leads to more complications after surgery, higher readmission rates, protracted rehabilitative care, and variable costs. These are not the health outcomes patients want.”

The CJR model is being tested in 67 metropolitan areas throughout the country, and nearly all hospitals in those areas are required to participate. Patients will still be able to choose their doctor, hospital, nursing facility, home health service, and other providers. A list of all 67 areas can be found here.

The aging of the U.S. population is causing a surge in hip and knee replacement surgeries. Over a million joint replacement surgeries are currently performed annually – a number expected to surpass four million by 2030. 

Joint replacement surgery is generally conducted on the elderly to relieve pain from osteoarthritis, a painful and disabling condition caused by a loss of cartilage and the degradation of joints. Twenty-seven million Americans suffer from osteoarthritis.

Recent studies have questioned whether many of the surgeries are appropriate. A five year study of 175 knee replacement patients by the National Institutes of Health found that over a third of the surgeries were inappropriate, according to researchers who found that many patients had pain and other symptoms that were too mild to justify having their knees replaced.  Less than half (44%) of the knee replacement surgeries were classified as appropriate, with 22% rated inconclusive and 34% deemed inappropriate.