Changes in Discharge to Rehabilitation: Potential Unintended Consequences of Medicare Total Hip Arthroplasty/Total Knee Arthroplasty Bundled Payments, Should They Be Implemented on a Nationwide Scale?

As a part of the 2010 Affordable Care Act, Medicare was committed to changing 50% of its reimbursement to alternative payment models by 2018. One strategy included introduction of “bundled payments” or a fixed price for an episode of care. Early studies of the first operative bundles for elective total hip and knee arthroplasty (THA/TKA) suggest changes in discharge to rehabilitation. It remains unclear the extent to which such changes affect patient well-being. In order to address these concerns, the objective of this study is to estimate projected changes in discharge to various type of rehabilitation, 90-day outcomes, extent of therapy received, and patient health-related quality-of-life before and after introduction of bundled payments should they be implemented on a nationwide scale.

A nationwide policy simulation was conducted using decision-tree methodology in order to estimate changes in overt and patient-centered outcomes. Model parameters were informed by published research on bundled payment effects and anticipated outcomes of patients discharged to various types of rehabilitation.

Following bundled payment introduction, discharge to inpatient rehabilitation facilities decreased by 16.9 percentage-points (95% confidence interval [CI] 16.5-17.3) among primary TKA patients (THA 16.8 percentage-points), a relative decline from baseline of 58.9%. Skilled nursing facility use fell by 24.0 percentage-points (95% CI 23.6-24.4). It was accompanied by a 36.7 percentage-point (95% CI 36.3-37.2) increase in home health agency use. Although simulation models predicted minimal changes in overt outcome measures such as unplanned readmission (TKA +0.8 percentage-points), changes in discharge disposition were accompanied by significant increases in the need for further assistive care (TKA +8.0 percentage-points) and decreases in patients’ functional recovery and extent of therapy received. They collectively accounted for a 30% reduction in recovered motor gains.

The results demonstrate substantial changes in discharge to rehabilitation with accompanying declines in average functional outcomes, extent of therapy received, and health-related quality-of-life. Such findings challenge notions of reduced cost at no harm previously attributed to the bundled payment program and lend credence to concerns about reductions in access to facility-based rehabilitation.