Are Bundled Payments a Viable Reimbursement Model for Revision Total Joint Arthroplasty?

BACKGROUND: Alternative payment models, such as the Centers for Medicare & Medicaid Services (CMS) Bundled Payment for Care Improvement (BPCI) initiative, aim to decrease overall costs for hip and knee arthroplasties. QUESTIONS/PURPOSES: We asked: (1) Is there any difference in the CMS episode-of-care costs, hospital length of stay, and readmission rate from before and after implementation of our bundled-payment program? (2) Is there any difference in reimbursements and resource utilization between revision THA and TKA at our institution? (3) Are there any independent risk factors for patients with high costs who may not be appropriate for a bundled-payment system for revision total joint arthroplasty (TJA)?
METHODS: Between October 2013 and March 2015, 218 patients underwent revision TKA or THA in one health system. Two hundred seventeen patients were reviewed as part of this study, and one patient with hemophilia was excluded from the analysis as an outlier. Our institution began a BPCI program for revision TJA during this study period. Patients' procedures done before January 1, 2014 at one hospital and January 1, 2015 at another hospital were not included in the bundled-care arrangement (70 revision TKAs and 56 revision THAs), whereas 50 revision TKAs and 41 revision THAs were performed under the BPCI initiative. Patient demographics, medical comorbidities, episode-of-care reimbursement data derived directly from CMS, length of stay, and readmission proportions were compared between the bundled and nonbundled groups.
RESULTS: Length of stay in the group that underwent surgery before the bundled-care arrangement was longer than for patients whose procedures were done under the BPCI (mean 4.02 [SD, 3.0 days] versus mean 5.27 days [SD, 3.6 days]; p = 0.001). Index hospitalization reimbursement for the bundled group was less than for the nonbundled group (mean USD 17,754 [SD, USD 2741] versus mean USD 18,316 [SD, USD 4732]; p = 0.030). There was no difference, with the numbers available, in total episode-of-care CMS costs between the two groups (mean USD 38,107 [SD, USD 18,328] versus mean USD 37,851 [SD, USD 17,208]; p = 0.984). There was no difference, with the numbers available, in the total episode-of-care CMS costs between revision hip arthroplasties and revision knee arthroplasties (mean USD 38,627 [SD, USD 18,607] versus mean USD 37,414 [SD, USD 16,884]; p = 0.904). Disposition to rehabilitation (odds ratio [OR], 5.49; 95% CI, 1.97-15.15; p = 0.001), length of stay 4 days or greater (OR, 3.66; 95% CI, 1.60-8.38; p = 0.002), and readmission within 90 days (OR, 6.99; 95% CI, 2.58-18.91; p < 0.001) were independent risk factors for high-cost episodes.
CONCLUSIONS: Bundled payments have the potential to be a viable reimbursement model for revision TJA. Owing to the unpredictable nature of the surgical procedures, inherent high risks of complications, and varying degrees of surgical complexity, future studies are needed to determine whether bundling patients having revision TJA will result in improved care and decreased costs. LEVEL OF EVIDENCE: Level IV, economic and decision analysis.