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  • Medicare to Test Bundled Payments for Hip, Knee Replacements in Selected Cities

    Hip and knee replacement surgery—which is nearly always partnered with rehabilitation including physical therapy—is the target of a proposed Medicare test of a bundled payment model, which will hold acute-care hospitals in 75 areas around the US accountable for their costs and quality of care. It's yet another signal that health care reform is moving away from fee-for-service payment models and toward paying for value and outcomes.

    The chosen areas include Los Angeles and New York City as well as smaller markets, and would affect more than 800 acute-care hospitals. Unlike similar tests of the past, there's no voluntary sign-up; all facilities must participate.

    The 5-year test period would begin January 1, 2016, and end December 31, 2020. Participating hospitals would bear the financial risk of the episode of care, which would begin at admission to the hospital and end 90 days after discharge, to include all related care covered under Medicare Parts A and B—the procedure, inpatient stay, hospital care, postacute care, and provider services.

    During the 5-year test period, Medicare would continue to pay using the current fee-for-services system. But at the end of every year, separate payments related to each episode would be bundled to calculate the total "episode payment" and reconciled against an established target price. If the episode payment is lower than the target and the hospital meets quality-performance thresholds, Medicare would pay the hospital the difference. If the episode payment is higher than the target, the hospital would have to repay Medicare the difference. The repayment responsibility would be waived the first year, and other policies in the proposal would limit the financial risk a hospital would be responsible for during the entire test period.

    As a result of the program, the Centers for Medicare and Medicaid Services (CMS) said in a press release, "hospitals would have an incentive to work with physicians, home health agencies, and nursing facilities to make sure beneficiaries get the coordinated care they need, with the goal of reducing avoidable hospitalizations and complications."

    Which is where physical therapy comes in. "The value of physical therapy after total joint replacement is well documented as providing improved outcomes," said APTA's Anita Bemis-Dougherty, PT, DPT, MAS, vice president, Department of Practice. "There are positive associations between earlier progression and outpatient, clinic-based, physical therapy."

    Hip and knee surgeries were chosen because they are the most common inpatient surgery for Medicare patients, and they tend to be high-cost, high-utilization procedures with a wide variance in spending.

    The initiative comes from CMS's Center for Medicare and Medicaid Innovation, whose purpose is to test innovative payment and service delivery models in search of those that reduce expenses while preserving or enhancing quality of care by making providers more accountable for both costs and patient outcomes.

    Previous tests of payment models have been voluntary, but CMS implied in the proposed rule that participation hasn't been as high, or among as broad a cross-section of providers, as the agency felt it needed to evaluate the models, and so this program would be mandatory for hospitals within the chosen geographic areas, with limited exceptions.

    APTA will submit comments on the proposal (.pdf), which are due September 8.


    • Sounds fair, reasonable, and doable. To those actors that will try to undercut or underscore the value PT makes in the full recovery of said patients...BEST OF LUCK(e.g., surgeons, facilities or others that will intentionally cut corners in overall patient care/service delivery merely to increase the shared profits at a consequence to the patients receiving such implants)! Good luck to all who will stubbornly try to hit CMS quality marks in the long run, as they try to save a dollar as opposed to serve that patients they were trained to care for (or make more than entitled to at the patient expense).

      Posted by Andy Harrison, PT on 7/16/2015 7:51 AM

    • What CMS is doing is not using a good model of evidence based practice. Coordinated care was studies under the Bush administration for 4-5 years in a variety of areas of the country and for certain prevalent conditions and despite the use of the words "coordinated care" at the end the researchers could not determine its effectiveness. What Obama and his minions have done is throw the dice and pretended to know outcomes. It would not be surprising if this new bundled payment does not lead to more long term care because part time HHAs are not going to provide enough care and families are limited in the care they can provide. And as already noted coordinated care is not a proven panacea.

      Posted by Diana Silverman on 7/22/2015 11:29 AM

    • This is not an evidence based approach and could result in more long term care not less. I have been in rehabilitation several times and have observed in patient care is more effective than outpatient. I am also familiar with the HHA business and it is very risky to depend on it without some form of family involvement. This is not about care.

      Posted by Diana Silverman on 7/22/2015 11:36 AM

    • All this is going to do is let hospital outpatient clinics run the show and put PP therapists out of the loop for these patients. There are two hospital outpatient clinics in my town. For years they have been my competition. Hospitals don't share.

      Posted by Scott Schultz on 7/24/2015 3:08 PM

    • I believe that the system as described above does not have an outcome aligned with PT. There needs to be a functional outcome to demonstrate our value. The outcomes listed (reducing hospitalizations/complications) are valuable from a cost savings perspective, but ignores why people choose to undergo LE elective joint replacement. This project should also be measuring functional outcomes, such as: return to work, return to avocation, gait speed, falls, LTC placement, among many others.

      Posted by Sue O'Brien on 7/27/2015 7:56 PM

    • Can somebody please help me. Sister 72 years old - is being kicked out of her rehabilitation NHC-Farragut, TN after only 7 days because of this so called "bundle"! A shock to her family. Who's going to take care of her. She has arthritis and sugar and in very poor health. Her PT told me. I don't understand the buracracy! Can somebody help me! Joyce

      Posted by Joyce Carmack on 8/11/2015 10:47 PM

    • I had the same bad experience as my 89 year old Mom broke her hip. After a few days in rehab we were threatened if she didn't improve fast we would have to pay because someone bundled her from the hospital and she only had seven days! She has paid Medicare and AARP Supplement for years and she is entitled to the full benefits that is listed in her brochures! If we had to pay she would have to have filed Medicaid so tell me that's cost effective! This is bad for patients and should be left up to the doctor ! You can't put an 89 year old with other health issues on a fast track program! She would end up in a nursing home for sure! Something is seriously wrong with this program!

      Posted by P. Clark on 1/14/2017 12:46 PM

    • i was under the bundled because i had hip replayment and went to rehab too i feel if you goto rehab for 3 week and they give you home th do do on your own then you don;t need any to or pt to come out to the house let the person stay in rehab for 3 week then come home with out having to and pt to the house let the person go to out patient rehab so they able go back to work faster then having to and pt because i did all of my ex 3 times a day i fell having to and pt come out is a wast of time Rosemarie

      Posted by Rosemarie on 4/4/2017 3:59 PM

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