Medicare Cost Savings Initiative for Hip and Knee Joint Replacement Surgeries

Medicare has found a wide range of costs associated with hip and knee joint replacement surgeries across the country.  The average costs range from $16,500 to $33,000 per joint replacement according to Medicare.  So, in an effort to control costs, Medicare has implemented a program in selected areas, (one of which is the Carlisle, Harrisburg, Hershey area), which will run for 5 years.  The program, called Comprehensive Care for Joint Replacement (CJR), is estimated to have a cost savings to Medicare of $153 million over the 5 years.  In this model, hospitals are given a target cost per episode which includes the following: the hospitalization for the surgery, the physician costs, any long term care or rehabilitation required, home health costs, outpatient rehabilitation and any readmissions.  If the episode costs exceeds the target costs, the hospital must pay back to Medicare a percentage of the overage.  If the episode costs are below the target costs, the hospital system receives a percentage of the savings.  Hospitals are allowed to partner with other providers to share in the risks and/or rewards.

So, what does all this mean for patients?  Patients who have hip or knee replacements shouldn’t notice any change other than some post procedure satisfaction surveys.  Patients may still choose their rehab facility and providers regardless of the affiliations or collaborations between hospitals and other providers.  Patients still have a choice, so continue to choose wisely and remember you should be the focus of care, not a bonus or penalty.


Ann D. Dennison, PT, DPT, OCS

References:  APTA webinar on Comprehensive Care for Joint Replacement Model


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