BACKGROUND: In 2009, the Center for Medicare & Medicaid Services (CMS) began penalizing hospitals with high rates of 30-day readmissions after hospitalizations for certain conditions. This policy will expand to include TKA in 2015. QUESTIONS/PURPOSES: What are the median profits and contribution margins of: (1) Medicare-reimbursed TKA, (2) 30-day TKA readmission, and (3) entire episode of care for readmitted TKA patients within 30 days compared to nonreadmitted patients? (4) Under new CMS guidelines, what financial penalty will the authors' institution face if its arthroplasty readmission rate exceeds the national average? METHODS: A retrospective review of 3218 primary TKAs performed during 2 years at a large urban academic hospital network was conducted using administrative and financial data. RESULTS: The median profit and contribution margins, respectively, were as follows: TKA episode, USD 5209 and USD 11,726; 30-day readmission, USD 608 and USD 3814; TKA visit with readmission, USD 2855 and USD 13,901; TKA visit without readmission, USD 5300 and USD 11,652. Readmission penalties could reach USD 6.21 million per year for the authors' institution. DISCUSSION: If our results are generalizable, unplanned TKA readmissions lead to diminished total profit. Although associated with a positive contribution margin, this is likely to be a short-term phenomenon as the new CMS policy will result in readmissions coming at a steep cost to referral centers.
BACKGROUND: In 2009, the Center for Medicare & Medicaid Services (CMS) began penalizing hospitals with high rates of 30-day readmissions after hospitalizations for certain conditions. This policy will expand to include TKA in 2015. QUESTIONS/PURPOSES: What are the median profits and contribution margins of: (1) Medicare-reimbursed TKA, (2) 30-day TKA readmission, and (3) entire episode of care for readmitted TKA patients within 30 days compared to nonreadmitted patients? (4) Under new CMS guidelines, what financial penalty will the authors' institution face if its arthroplasty readmission rate exceeds the national average? METHODS: A retrospective review of 3218 primary TKAs performed during 2 years at a large urban academic hospital network was conducted using administrative and financial data. RESULTS: The median profit and contribution margins, respectively, were as follows: TKA episode, USD 5209 and USD 11,726; 30-day readmission, USD 608 and USD 3814; TKA visit with readmission, USD 2855 and USD 13,901; TKA visit without readmission, USD 5300 and USD 11,652. Readmission penalties could reach USD 6.21 million per year for the authors' institution. DISCUSSION: If our results are generalizable, unplanned TKA readmissions lead to diminished total profit. Although associated with a positive contribution margin, this is likely to be a short-term phenomenon as the new CMS policy will result in readmissions coming at a steep cost to referral centers.
Authors: Rutledge Carter Clement; Peter B Derman; Danielle S Graham; Rebecca M Speck; David N Flynn; Lawrence Scott Levin; Lee A Fleisher Journal: J Arthroplasty Date: 2013-08-13 Impact factor: 4.757
Authors: Benjamin Zmistowski; Camilo Restrepo; Jordan Hess; Darius Adibi; Soltan Cangoz; Javad Parvizi Journal: J Bone Joint Surg Am Date: 2013-10-16 Impact factor: 5.284
Authors: S L Hughes; F M Weaver; A Giobbie-Hurder; L Manheim; W Henderson; J D Kubal; A Ulasevich; J Cummings Journal: JAMA Date: 2000-12-13 Impact factor: 56.272
Authors: Kevin J Bozic; Judith Maselli; Penelope S Pekow; Peter K Lindenauer; Thomas P Vail; Andrew D Auerbach Journal: J Bone Joint Surg Am Date: 2010-11-17 Impact factor: 5.284
Authors: Sunil Eappen; Bennett H Lane; Barry Rosenberg; Stuart A Lipsitz; David Sadoff; Dave Matheson; William R Berry; Mark Lester; Atul A Gawande Journal: JAMA Date: 2013-04-17 Impact factor: 56.272
Authors: Steven M Kurtz; Edmund C Lau; Kevin L Ong; Edward M Adler; Frank R Kolisek; Michael T Manley Journal: Clin Orthop Relat Res Date: 2017-12 Impact factor: 4.176