Emergency Department Observation Versus Readmission Following total Joint Arthroplasty: Can We Avoid the Bundle Buster?

As the Center for Medicare and Medicaid (CMS) moves toward bundled payment plans for total joint arthroplasty (TJA), it becomes necessary to reduce factors that increase cost for an episode of care such as readmissions. The goal of this study is to evaluate the payment for observation stay versus readmission for patients who present to the emergency department.

A retrospective review from 2014-2019 was conducted identifying all Medicare patients who had a primary, elective TJA and visited the ED within 90 days postoperatively. If a readmission was one midnight or less or had an equivalent diagnosis to an observation stay patient, it was characterized as a readmission that could have qualified as an observation stay. Using our institution’s average payment for Medicare readmissions and observations, actual and potential savings were calculated.

Sixty-nine out of 523 (13.2%) patients were placed under observation, while 454 (86.8%) patients were readmitted. Eighty-six out of 523 (18.9%) patients qualified for observation status. There was an actual savings of 11.8% by placing patients on observation status and readmission rate was decreased by 13.2%. Savings could have increased by a total of 27.7% and readmissions decreased by a total of 29.6% if all patients who qualified had been placed on observation status.

At our institution, the implementation of observation stay has led to a savings of 11.8% and a potential total savings of 27.7%. The rate of readmissions was decreased by 13.2% and had the potential to decrease by a total of 29.6%.