Hip and Knee Replacements: Medicare New Payment Rules Starting April 1st

According to Melinda Beck of The Wall Street Journal, “Starting Friday, nearly 800 U.S. hospitals face sweeping new payment rules that could have a direct impact on their bottom line.”

“The rules will hold hospitals accountable for all the costs of hip and knee replacements for 90 days. If patients recover and go home quickly, hospitals could reap savings. If they have complications or need lengthy stays in a rehab facility, hospitals could owe Medicare instead, starting next year.”

Experts say that most seniors are not ready for these new payment rules.

This bundled-payment initiative is one of the first mandatory programs under the Obama administration. The plan is to shift at least 50% of Medicare spending to alternative-payment models by the year 2018.

All hospitals in 67 randomly selected metropolitan areas are required to participate. This includes areas like New York and Los Angeles. Collectively, they will “perform about one-third of the 430,000 hip and knee replacements Medicare covers annually.”(The Wall Street Journal)

According to estimates by The Centers for Medicare and Medicaid Services, or CMS, the program will save $343 million on the $12.2 billion Medicare will spend on the procedures over the next five years.

The plan is to keep and eye on patients to make sure they make a healthy recovery. With fewer complications, costs should decrease.

According to Ricardo Alonso-Zaldivar of The Boston Globe, “Hip and knee replacements are the most common inpatient surgery for beneficiaries, and Medicare will be using financial rewards and penalties to foster coordination among hospitals, doctors, and rehab centers.”

At first patients and families may not notice a big difference other than more forms to sign. Patients will still be able to select their doctors and hospitals. If the concept is successful, patients should leave the hospital with better results.

“Medicare paid for more than 400,000 hip and knee replacements in 2014, at a cost of $7 billion to taxpayers for the hospitalizations alone. For some patients, recovery may be arduous, but surgery can relieve pain and add years of mobility.” (The Boston Globe)







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