Unintended Bundled Payments for Care Improvement Consequences After Removal of Total Knee Arthroplasty From Inpatient-Only List

The Centers for Medicare and Medicaid Services beginning in 2013 introduced the Bundled Payments for Care Improvement (BPCI) initiative to test innovative payment and service delivery models. Early implementers of the BPCI program have shown decreased hospital length of stays, discharges to inpatient facilities, and readmission rates with overall cost savings. Removal of total knee arthroplasty from the Medicare inpatient-only list may potentially cause substantial changes in patients included in BPCI bundles in 2018.

The 2017 Centers for Medicare and Medicaid Services data were used to compare total expenditures of diagnosis-related groups 469 and 470. Medicare patients who underwent total knee arthroplasty between January 2017 and December 2017 were defined as group one (n = 1024) and expenditures were compared to group two patients (n = 631) that included only those patients staying greater than 24 hours. Postacute events within the 90-day episode including admission to an inpatient rehabilitation facility/skilled nursing facility (SNF), home health (HH), and readmissions were analyzed. Expenditures were converted to 2018 dollars using Consumer Price Index. Statistical analysis of expenditures was performed with Wilcoxon Tests.

Median expenditures were $15,587 (interquartile range [IQR] $13,915-$17,684) for group 1 and $16,706 (IQR $15,333-$19,247) for group 2 ( P < .001). Median postacute care spend was $3817 (IQR $2431-$5057) for group 1 and $4195 (IQR $3049-$6064) for group 2 patients ( P < .001). Compared with group 1 patients, group 2 patients had a higher rate of SNF admissions (21% vs 13%), inpatient rehabilitation facility admissions (0.16% vs 0.1%), HH (72% vs 69%), and readmissions (5% vs 4%).

Implications of the removal of total knee arthroplasty from the inpatient-only list could potentially remove up to 40% of patients from the BPCI program leading to substantially less savings on average $1100 per patient. Remaining bundle patients are also more likely to require HH and SNF after discharge.