Hospitals across the nation that perform hip and knee replacements are facing more responsibility for the cost and after-care of those procedures.
Medicare has implemented “Comprehensive Care for Joint Replacement Model” in 800 hospitals across the country, said Susan Page, Pratt Regional Medical Center president and chief executive officer.
In this model, Medicare pays the hospital a set amount to cover the care of the patient from admission to the hospital to 90 days after dismissal. Medicare looks at historical claims data to determine the set amount.
This money covers hospitalization, physician care, home health care, skilled nursing care and any readmissions within that 90-day period, Page said.
However, if health care costs exceed that set amount, then the hospital is responsible for covering additional costs. This means Medicare is putting the total risk for hip and knee replacement on the hospital.
In 2015, PRMC performed 170 knee replacements and 74 hip replacements so this could have a big impact on hospital finances.
The model is in effect in Sedgwick, Butler and Kingman counties. Currently, the model is not applicable at PRMC but Page anticipates it will be in the future.
“We’re not currently impacted by this model but it’s coming. We just don’t know when,” Page said.
The hospital is not waiting for Medicare to institute the model at PRMC but is working on a bundle payment plan now.
Under the plan, the hospital decides how much goes to the physician, home health care, nursing homes, swing bed care in small hospitals and so on.
In Pratt, a fully integrated system is in place with surgeons, home help agency and skilled care at Pratt Rehabilitation and Residence Center all part of PRMC. Being all in one, hopefully it will make it easier to know how those funds will be paid.
If the patient does well in this system, there could be money left from the payment. But if the patient has complications and has to be readmitted in the 90 day time period and the set amount is gone, the hospital doesn’t get payment.
One of major concerns with this model is a patient that needs a hip or knee replacement but also has a chronic medical condition. It will take longer for this patient to recover and the set amount might not cover all the costs.
“The chance for financial risk will be higher,” Page said.
While this model covers just hip and knee replacement, it is the first of many alternative payment models Medicare will implement, Page said. This is just the beginning. They are absolutely expanding into other procedures and medical conditions.
There is no time frame for rolling more hospitals into the program. Currently, Medicare is the only system with this program but historically whatever Medicare does other companies like Blue Cross tend to follow.
“I anticipate this will spread to other companies,” Page said.
Anytime the hospital is put more at risk, it makes Page a little nervous. She reads daily how more and more hospitals are suffering financially and how hospital closures are higher than they have ever been.
Kansas’ hospitals took a significant reduction in Medicare reimbursements when the affordable care act went into effect.
Adding another element of risk makes hospitals even more responsible for patient care.