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Bundled Payments Don't Drive Up Hip and Knee Replacement Volumes

News  |  By Christopher Cheney  
   February 15, 2017

Variations exist in the volume of hip and knee replacement procedures among hospitals that participated in a Medicare bundled payment program, but the program was not was responsible for those variations, researchers say.

Criticism leveled against a Medicare bundled payment program for lower extremity joint replacement procedures is unfounded, according to a study published by the Altarum Institute, a nonprofit research and consulting organization.

"Debunking the Argument that the Bundled Payment for Care Improvement Program (BPCI) Contributed to High Procedure Volumes," was published in response to research and an accompanying editorial published last year in the Journal of the American Medical Association.

Researchers Fire Bundled-Payments Warning Shots

Elliott Fisher, MD, MPH, director of The Dartmouth Institute for Health Policy and Clinical Practice wrote the JAMA editorial. His primary criticism of BPCI was that bundled payments could perpetuate fee-for-service financial incentives that spur service volume.

Altarum researchers found variations in the volume of hip and knee replacement procedures among hospitals that participated in BPCI. They concluded, however, that the bundled payments program was not responsible for those volume variations.

BPCI was launched in October 2013. The study used Medicare data on inpatient-service claims for hip and knee replacement procedures performed under BPCI's bundled payment model drawn from 47 hospitals between January 2014 and December 2015.

That data was compared to data on procedures performed at 2,592 non-participating hospitals between January 2011 and December 2013.

"The rate of increase in the volume of procedures was significantly lower than in the rest of the country" than in BPCI-participating hospitals, the Altarum study states.

"Our study shows that the initial group of BPCI participants, those that went into the program in October 2013 and January 2014, had a rate of [volume] increase between baseline and performance years that was significantly lower than the national rate. In fact, for that group, the volume of procedures in 2015 was lower than in 2014."

Drivers of Volume
The number of Medicare beneficiaries living in the area around BPCI-participating hospitals and the level of hospital competition in those markets were key drivers of service volume variation, the Altarum study says.

"Increasing volumes between 2011 and 2014 were associated with growth in the population of Medicare fee-for-service beneficiaries and the number of hospitals in a [Hospital Referral Region]."

Hospital consolidation and competition were additional key drivers of increased service volume is some marke

Christopher Cheney is the CMO editor at HealthLeaders.

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