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

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.

Figure.. MSA Eligibility and Randomization in a 5-Year Randomized Trial of a Mandatory Medicare Bundled Payment Program for Lower Extremity Joint Replacement (LEJR) Episodes

eTable 1 in the Supplement provides more details on the eligibility criteria and randomization process. MSA indicates metropolitan statistical area; CJR, Comprehensive Care for Joint Replacement program. ^aOriginal eligibility criteria were (1) at least 400 LEJR episodes in the baseline period between July 1, 2013, and June 30, 2014; (2) at least 400 non–Bundled Payments for Care Improvement Initiative (BPCI) LEJRs in the baseline period; (3) at least 50% of LEJR episodes in the baseline period were non-BPCI; and (4) at least 50% of otherwise eligible LEJR episodes not in Maryland hospitals. For eligibility criterion 2, BPCI participation was defined as hospitals participating in BPCI model 1 and phase 2 of BPCI models 2 or 4 as of July 1, 2015. For eligibility criterion 3, BPCI participation was defined in 2 steps: first, less than 50% of potentially eligible LEJR episodes were in hospitals participating in phase 2 of BPCI models 2 or 4 as of July 1, 2015; second, less than 50% of LEJR referrals to skilled nursing facility or home health agency services were made up of skilled nursing facilities or home health agencies participating in BPCI model 3 as of July 1, 2015. ^bThe 196 eligible MSAs were divided into 8 strata based on the full interaction of (1) average wage-adjusted historical LEJR episode payment, grouped into quartiles, and (2) MSA population size, grouped into above and below median. Randomization occurred within strata. Treatment probabilities varied within the payment quartiles: 30% in the first quartile (lowest payment), 35% in the second, 40% in the third, and 45% in the fourth (highest payment). ^cAfter randomization took place, the Centers for Medicare & Medicaid Services received comments that the original eligibility criteria did not take into account providers that entered into phase 2 of BPCI by October 1, 2015, which was the final quarter a phase 1 BPCI participant could transition into phase 2. CMS therefore revised the definition of BPCI participation in original eligibility criteria 2 and 3. The revised eligibility criterion 2 defined BPCI participation hospitals participants as of October 1, 2015, instead of as of July 1, 2015, and also included episodes associated with a physician who was in a physician group practice in phase 2 of BPCI model 2 as of October 1, 2015. Similarly, the revised eligibility criterion 3 defined BPCI participation based on the list of BPCI-participating hospitals, skilled nursing facilities, and home health agencies as of October 1, 2015, instead of as of July 1, 2015. The revised eligibility criteria resulted in exclusion of 8 MSAs from the CJR group, resulting in a final 67 MSAs in the CJR group. CMS did not announce which MSAs would have been excluded from the control group based on the revised criteria.