Association Between Hospital Participation in a Medicare Bundled Payment Initiative and Payments and Quality Outcomes for Lower Extremity Joint Replacement Episodes

In JAMA, Laura Dummit and colleagues, including Matthew Press, evaluate whether a Centers for Medicare and Medicaid Services (CMS) bundled payment pilot program is associated with a reduction in Medicare payments. Specifically, the authors assess if Bundled Payments for Care Improvement (BPCI) reduced Medicare payments and maintained quality in lower extremity joint replacement. This CMS program was launched in 2013 to test whether linking payments for services provided during an episode of care can reduce Medicare payments and maintain quality. The authors used a difference-in-differences approach to estimate the change in outcomes and cost for Medicare beneficiaries who had lower extremity join replacement during the control and intervention periods. They found that, with BPCI, the mean Medicare payment was reduced by $3,286 when compared to baseline procedures. Furthermore, the mean Medicare payments declined $1,166 more for Medicare beneficiaries who were cared for at BPCI-participating hospitals when compared to non-BPCI hospitals. Quality measures, including unplanned readmissions, emergency department visits, and mortality, were not statistically different between the BPCI and comparison populations. These findings indicate that bundled payments can reduce payments for an episode of care without reducing quality.