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July 9, 2019

Hospitals that participated in joint replacement bundles saved nearly $1K per patient

Daily Briefing

    Hospitals that participated in the Comprehensive Care for Joint Replacement (CJR) Model saved $997 more per care episode in their first two performance years compared to control groups, according to a new analysis by Lewin Group.

    Infographic: 5 strategies to upgrade your joint replacement pathway for CJR

    The Lewin Group is a subsidiary of Optum. The Daily Briefing is published by Advisory Board, a division of Optum, which is a wholly owned subsidiary of UnitedHealth Group.


    About CJR

    The CJR model, which Medicare implemented in April 2016, holds participating hospitals accountable for episodic spending performance on eligible fee-for-service hip and knee replacements for Medicare beneficiaries. Hospitals that meet certain benchmarks for quality and cost measures receive a bonus payment, while hospitals that exceed the set target could be penalized.

    For the first two performance years, CMS implemented the model in 67 U.S. regions where 800 hospitals were required to participate. CMS in December 2017 published a final rule that, among other things, made the program voluntary for 33 of the 67 metropolitan areas.

    As of February 2018, about 465 hospitals were participating in the program, according to CMS.

    Report details

    For the report, researchers reviewed Medicare claims from 2015 through 2017 to evaluate the program's first two performance years, which covered episodes that began on or after April 1, 2016, and ended by Dec. 31, 2017. The researchers focused on lower extremity joint replacements and compared CJR hospitals' performance to a control group. The researchers found average episode payments for lower extremity joint replacements were 3.7%, or up to $997, lower among hospitals under the CJR model, compared with hospitals in control areas.

    The researchers determined that the savings were due primarily to reductions in post-acute care. For instance, under the CJR program, patients' length of stay in nursing facilities experienced a relative decrease of 2.3 days, resulting in a $508 relative decrease in spending. In addition, the study found hospitals under the CJR model discharged relatedly fewer patients to inpatient rehab facilities, compared with the baseline, resulting in a relative decrease in inpatient rehab facilities spending of $357.

    The researchers also determined that, since the hospitals likely received reconciliation payments within the first two years, they were more likely to have higher quality scores, lower patient complexity, and more episodes of care.

    Moreover, the researchers noted that "by the end of the episode, CJR and comparison patient survey respondents reported similar functional status gains and pain levels from before their hospitalization to after the end of the episode."

    Lewin Group in the analysis estimated that Medicare likely saved money through the model as well, but researchers still aren't sure how much. The report states that Medicare may have saved about $17.4 million. However, according to the report, the "estimated savings ranged from a net loss of $41.2 million to savings of up to $75.9 million because of uncertainty around the estimated reduction in episode payments."


    The analysis aligns with previous research that found the CJR model reduces spending by curbing skilled nursing facility usage, according to Skilled Nursing News.

    A similar study conducted by researchers at Harvard University earlier this year estimated savings at $1,084 per case episode, stating that the reduction was "exclusively related to reductions in the use of post–acute care services in skilled nursing facilities and inpatient rehabilitation facilities."

    Similar to Lewin Group, the Harvard researchers struggled to determine that the cost savings were beneficial on a larger scope. For instance, once they factored in reconciliation payments to operators, savings fell to $212 per episode (Spanko, Skilled Nursing News, 7/7; Muchmore, Healthcare Dive, 7/1; Gooch, Becker's Hospital Review, 7/2; Lewin Group report, accessed 7/8;, accessed 7/9).

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