Cost of Joint Replacement Using Bundled Payment Models

IMPORTANCE: Medicare launched the mandatory Comprehensive Care for Joint Replacement bundled payment model in 67 urban areas for approximately 800 hospitals following its experience in the voluntary Acute Care Episodes (ACE) and Bundled Payments for Care Improvement (BPCI) demonstration projects. Little information from ACE and BPCI exists to guide hospitals in redesigning care for mandatory joint replacement bundles. OBJECTIVE: To analyze changes in quality, internal hospital costs, and postacute care (PAC) spending for lower extremity joint replacement bundled payment episodes encompassing hospitalization and 30 days of PAC. DESIGN, SETTING, AND PARTICIPANTS: This observational study followed 3942 total patients with lower extremity joint replacement at Baptist Health System (BHS), which participated in ACE and BPCI. EXPOSURES: Lower extremity joint replacement surgery under bundled payment at BHS. MAIN OUTCOMES AND MEASURES: Average Medicare payments per episode, readmissions, emergency department visits, prolonged length of stay, and hospital savings from changes in internal hospital costs and PAC spending. RESULTS: Overall, 3942 patients (mean [SD] age, 72.4 [8.4] years) from BHS were observed. Between July 2008 and June 2015, average Medicare episode expenditures declined 20.8%, from $26 785 to $21 208 (P