Medicare's CJR Program Shows Decreased Spending Among Savings Hospitals

Savings hospitals had lower baseline spending than nonsavings hospitals during the first year of the Comprehensive Care for Joint Replacement (CJR) program, according to a Research Letter in JAMA.

Medicare’s CJR program offers bundled payments for hip and knee surgery at 799 hospitals that include payments for hospitalization and post-discharge care 90 days after the procedure into a single benchmark. The program incentivizes hospitals through bonus payments to exceed their quality and cost benchmarks. Overall, 67 urban markets in metropolitan statistical areas (MSAs) were required by Medicare to participate in the program.

Recently, Medicare has declared the most hospitals in 34 of 67 MSAs must continue participating in the CJR program, while low-volume hospitals could choose whether to continue or withdraw. The study evaluated Medicare’s change in policy and how it affects the future of mandatory bundled payment models.

The researchers used Medicare data to analyze the proportion, distribution, and quality performance of CJR hospitals that achieved savings during the first year of CJR. This was then compared to the pre-CJR baseline which took place from April 2015 to March 2016. Volume was calculated from 100% Medicare claims from 2015 to 2016.

Of the 799 CJR hospitals, 48% were savings hospitals, and mean episode savings ranged from $13.83 to $3590.97. 92% of the savings hospitals achieved good or exceptional level quality. Generally, savings hospitals had a greater number of hospital beds than nonsavings hospitals and had a greater average annual Medicare joint replacement value.

In addition, savings hospitals were more likely to be nonprofit, teaching, and integrated with a post-acute care facility compared to nonsavings hospitals. Nonsavings hospitals were more frequently considered safety-net hospitals. In terms of evaluating proportion, savings hospitals did not differ between mandatory and voluntary MSAs.

“Nevertheless, these findings suggest that certain hospital types may be better positioned to succeed in mandatory bundled payment compared with others, particularly as policy changes affect the number and composition of hospitals and markets required to participate,” the authors concluded.

References

Navathe AS, Liao JM, Shah Y, et al. Characteristics of hospitals earning savings in the first year of mandatory bundled payment for hip and knee surgery. JAMA. 2018;319(9):930-932. doi:10.1001/jama.2018.0678.