Implications of the Definition of an Episode of Care Used in the Comprehensive Care for Joint Replacement Model.

Importance: Under the Comprehensive Care for Joint Replacement (CJR) model, hospitals are held accountable for nearly all Medicare payments that occur during the initial hospitalization until 90 days after hospital discharge (ie, the episode of care). It is not known whether unrelated expenditures resulting from this "broad" definition of an episode of care will affect participating hospitals' average episode-of-care payments. Objective: To compare the CJR program's broad definition of an episode of care with a clinically narrow definition of an episode of care. Design, Setting, and Participants: We identified Medicare claims for 23 251 patients in Michigan who were Medicare beneficiaries and who underwent joint replacement during the period from 2011 through 2013 at hospitals located in metropolitan statistical areas. Using specifications from the CJR model and the clinically narrow Hospital Compare payment measure, we constructed episodes of care and calculated 90-day episode payments. We then compared hospitals' average 90-day episode payments using the 2 definitions of an episode of care and fit linear regression models to understand whether payment differences were associated with specific hospital characteristics (average Centers for Medicare & Medicaid Services-hierarchical condition categories risk score, rural hospital status, joint replacement volume, percentage of Medicaid discharges, teaching hospital status, number of beds, percentage of joint replacements performed on African American patients, and median income of the hospital's county). We performed analyses from July 1 through October 1, 2015. Main Outcomes and Measures: The correlation and difference between average 90-day episode payments using the broad definition of an episode of care in the CJR model and the clinically narrow Hospital Compare definition of an episode of care.
Results: We identified 23 251 joint replacements (ie, episodes of care). The 90-day episode payments using the broad definition of the CJR model ranged from $17 349 to $29 465 (mean [SD] payment, $22 122 [$2600]). Episode payments were slightly lower (mean payment, $21 670) when the Hospital Compare definition was used. Both methods were strongly correlated (r = 0.99, P < .001). The average payment difference between these 2 types of episodes of care was small (mean [SD], $452 [$177]; range, $73-$1006). In our multivariable analysis, we found that the hospital characteristics examined had a minimal impact or no impact on the payment differential. Conclusions and Relevance: The average 90-day episode payments determined by both definitions of an episode of care were strongly correlated, and there was a small payment differential for most hospitals. In the context of joint replacement bundled payments, these data suggest that hospital performance will be consistent whether a broad or clinically narrow definition of an episode of care is used.