Association Between Hospital Participation in a Medicare Bundled Payment Initiative and Payments and Quality Outcomes for Lower Extremity Joint Replacement Episodes

Abstract

Importance: Bundled Payments for Care Improvement (BPCI) is a voluntary initiative of the Centers for Medicare & Medicaid Services to test the effect of holding an entity accountable for all services provided during an episode of care on episode payments and quality of care.

Objective: To evaluate whether BPCI was associated with a greater reduction in Medicare payments without loss of quality of care for lower extremity joint (primarily hip and knee) replacement episodes initiated in BPCI-participating hospitals that are accountable for total episode payments (for the hospitalization and Medicare-covered services during the 90 days after discharge).

Design, setting, and participants: A difference-in-differences approach estimated the differential change in outcomes for Medicare fee-for-service beneficiaries who had a lower extremity joint replacement at a BPCI-participating hospital between the baseline (October 2011 through September 2012) and intervention (October 2013 through June 2015) periods and beneficiaries with the same surgical procedure at matched comparison hospitals.

Exposure: Lower extremity joint replacement at a BPCI-participating hospital.

Main outcomes and measures: Standardized Medicare-allowed payments (Medicare payments), utilization, and quality (unplanned readmissions, emergency department visits, and mortality) during hospitalization and the 90-day postdischarge period.

Results: There were 29 441 lower extremity joint replacement episodes in the baseline period and 31 700 in the intervention period (mean [SD] age, 74.1 [8.89] years; 65.2% women) at 176 BPCI-participating hospitals, compared with 29 440 episodes in the baseline period (768 hospitals) and 31 696 episodes in the intervention period (841 hospitals) (mean [SD] age, 74.1 [8.92] years; 64.9% women) at matched comparison hospitals. The BPCI mean Medicare episode payments were $30 551 (95% CI, $30 201 to $30 901) in the baseline period and declined by $3286 to $27 265 (95% CI, $26 838 to $27 692) in the intervention period. The comparison mean Medicare episode payments were $30 057 (95% CI, $29 765 to $30 350) in the baseline period and declined by $2119 to $27 938 (95% CI, $27 639 to $28 237). The mean Medicare episode payments declined by an estimated $1166 more (95% CI, -$1634 to -$699; P < .001) for BPCI episodes than for comparison episodes, primarily due to reduced use of institutional postacute care. There were no statistical differences in the claims-based quality measures, which included 30-day unplanned readmissions (-0.1%; 95% CI, -0.6% to 0.4%), 90-day unplanned readmissions (-0.4%; 95% CI, -1.1% to 0.3%), 30-day emergency department visits (-0.1%; 95% CI, -0.7% to 0.5%), 90-day emergency department visits (0.2%; 95% CI, -0.6% to 1.0%), 30-day postdischarge mortality (-0.1%; 95% CI, -0.3% to 0.2%), and 90-day postdischarge mortality (-0.0%; 95% CI, -0.3% to 0.3%).

Conclusions and relevance: In the first 21 months of the BPCI initiative, Medicare payments declined more for lower extremity joint replacement episodes provided in BPCI-participating hospitals than for those provided in comparison hospitals, without a significant change in quality outcomes. Further studies are needed to assess longer-term follow-up as well as patterns for other types of clinical care.