Evaluation of Economic and Clinical Outcomes Under Centers for Medicare & Medicaid Services Mandatory Bundled Payments for Joint Replacements.

Importance: In 2016, the Centers for Medicare & Medicaid Services (CMS) launched its first mandatory bundled payment program, the Comprehensive Care for Joint Replacement (CJR) model, by randomizing metropolitan statistical areas (MSAs) into the payment model. Objective: To evaluate changes in key economic and clinical outcomes associated with the CJR model. Design, Setting, and Participants: A retrospective, national, population-based analysis of Medicare fee-for-service beneficiaries undergoing lower extremity joint replacement was conducted using 100% Medicare Part A data and 5% Medicare Part B data. Within an intention-to-treat framework, a difference-in-differences approach was used to compare Medicare spending, quality of care, volume of episodes, and patient selection in episodes of lower extremity joint replacements in the first 2 years of the program between propensity score-matched CJR and non-CJR hospitals (episodes initiated from April 1, 2016, through December 31, 2017, with the latter completed by March 31, 2018). Lower extremity joint replacement episodes in MSAs randomly assigned to the CJR model were compared with those in MSAs not assigned to the CJR model. Exposures: Random assignment of MSAs into the CJR model within prespecified strata. Main Outcomes and Measures: Spending and its components, quality of care, volume of episodes, and patient characteristics were the main outcomes. Results: After propensity score matching, there were 157 828 primary lower extremity joint replacement cases across 684 hospitals in the CJR (treatment) group (101 641 [64.4%] women; mean [SD] age, 72.8 [8.9] years) and 180 594 cases across 726 hospitals in the non-CJR (control) group (115 580 women [64.0%] women; mean [SD] age, 72.6 [8.8] years). The CJR was associated with a decrease of $582 per episode in Medicare Part A spending, a 2.5% savings on claims (95% CI, -$873 to -$290; P < .001) driven by a 5.5% decline in 90-day postacute care spending, concentrated in skilled nursing facilities (-4.5% change from baseline; 95% CI, -$460 to -$26; P = .03) and inpatient rehabilitation facilities (-22.9% change from baseline; 95% CI,-$497 to -$176; P < .001). Estimated savings on claims, while consistent with changes in practice patterns, may not have exceeded the reconciliation payments to hospitals reported by CMS to date. No significant changes in hospital length of stay, readmissions, complications, 30- or 90-day mortality, volume of episodes, or patient characteristics relative to control were found. Conclusions and Relevance: The CJR was associated with reduced Medicare Part A spending on claims over 2 years, largely through lower postacute spending. Mandatory bundled payments may serve as a useful model for policy efforts to change clinicians' and facilities' behavior without harming quality.