The Value-Based Total Joint Arthroplasty Paradox: Improved Outcomes, Decreasing Cost, and Decreased Surgeon Reimbursement, Are Access and Quality at Risk?

Medicare Reimbursement for Primary Hip and Knee Arthroplasty is Disproportionately Decreasing Relative to Other High-Volume Inpatient Procedures: Leader of the Pack

INTRODUCTION

Decreasing Medicare surgeon reimbursement for total hip arthroplasty (THA) and total knee arthroplasty (TKA) may limit access to care. The purpose of this study was to examine trends in Medicare reimbursement fees for primary THA and TKA and compare reimbursement to other high-volume non-arthroplasty procedures.

METHODS

A nationally representative database was retrospectively queried to identify the most frequently performed inpatient procedures in the United States from 2016 to 2020. The Centers for Medicare & Medicaid Services (CMS) Physician Fee Schedule Look-Up Tool was then used to obtain reimbursement data for these commonly billed Current Procedural Terminology (CPT) codes from 2000 to 2024. Utilizing the consumer price index, all monetary data were adjusted and reported in 2024 United States dollars to account for inflation. Unadjusted and 2024 inflation-adjusted mean annual reimbursement rates, mean annualized percent change, and total percent change in reimbursement were calculated and reported for each procedure.

RESULTS

Between 2000 and 2024, unadjusted Medicare reimbursement for primary TKA and THA decreased by 22.3 and 17.7%, respectively. In contrast, reimbursement increased for colectomy by 20.8%, appendectomy by 15.7%, and total shoulder arthroplasty by 11.0%. After adjusting for inflation, the largest decreases in surgeon reimbursement were for primary TKA and primary THA, with decreases of 56.9 and 54.3%, respectively. The mean inflation-adjusted decrease in Medicare reimbursement for all non-arthroplasty procedures was 44.0%. Spine fusion, total ankle arthroplasty, femoral open reduction internal fixation, and total shoulder arthroplasty decreased by 50.8, 49.4, 43.6, and 38.4%, respectively.

CONCLUSION

Inflation-adjusted reimbursement rates for all common inpatient procedures have dropped in the United States, with primary TKA and THA being the most importantly affected. Since 2000, the reductions in reimbursement for primary TKA and THA have been 4,750 and 3,788%, greater than the mean decline in reimbursement for the other most common inpatient procedures performed in the United States.

Are Commercial Value-Based Care Programs Still Viable for Hip and Knee Arthroplasty: An Analysis of a Single Institution

INTRODUCTION

Unlike Medicare bundled payment programs for total hip arthroplasty (THA) and knee arthroplasty (TKA), which have little variance in facility reimbursements, few publications have studied value-based care (VBC) partnerships with commercial insurers. Specifically, VBC partnerships incentivize practices to maximize revenue surpluses by providing high-value care at decreased costs. Surgical facility choice can reduce costs with more procedures shifting to lower-cost specialty hospitals and ambulatory surgical centers (ASCs). This study aimed to determine whether demand matching appropriate patients to lower-cost facilities reduced costs in our commercial VBC program.

METHODS

We reviewed a consecutive series of 4,285 primary THA and TKA patients between January 2020 and April 2023 as part of a single-payer VBC program, including both commercial and Medicare Advantage (MA) plans. Demographics, facility, and 90-day episode-of-care (EOC) claims data were collected from our clinical and payor cost databases. Surgical facility utilization, total costs, and revenue surpluses were stratified by insurance type (commercial versus MA), and trends were compared over the four-year study period.

RESULTS

There were 1,369 patients (32%) who had MA and 2,916 (68%) who had commercial insurance. Among commercially insured patients, the mean total ($33,455 versus $27,433, P < 0.001) and facility costs ($25,068 versus $18,385, P < 0.001) both declined from 2020 to 2023, while the revenue surpluses ($6,216 versus $13,090, P < 0.001) increased. Among MA patients, mean total ($17,809 versus $17,235, P < 0.001) and facility costs ($13,491 versus $13,151, P < 0.001) had only minimal decreases, while revenue surpluses declined ($7,928 versus $4,073, P < 0.001). Utilization of ASCs increased among both groups from 2020 to 2023 (1 versus 20% for commercial, 0.3 versus 12% for MA, P < 0.001).

CONCLUSION

Practices can still have successful VBC partnerships with private insurers by demand matching appropriate patients to lower-cost facilities. Our cost-reduction efforts did not have the same success with MA plans. Further studies should evaluate whether continued cuts to MA programs will threaten access.

The impact of bundled payment on the economic burden and satisfaction of patients in Close-Knit County Medical Community in China

Background

China is setting up a Close-Knit County Medical Community (CCMC) to connect county hospitals, township health centers, and village clinics. The medical insurance agency will count the number of insured people in the CCMC area and distribute funds to the community as a whole. Then, the county hospital will work with local health facilities to decide how to use these funds. This reform aims to improve primary healthcare services, lower medical costs, support residents' health, and boost their satisfaction with healthcare.

Methods

This study looked at data from counties in China monitored by County Medical Communities from 2018 to 2022. We used difference-in-differences (DID) to analyze how bundled payments affected patients' financial burdens, the income of healthcare providers and the satisfaction of patients and healthcare providers.

Results

The bundled payment policy had no significant effect on the average cost per discharged patient (p > 0.05). In 2022, the average outpatient expenses increased by 17.58 yuan (p < 0.05), while in 2021, the actual reimbursement rates for hospitalization costs rose by 2.18% (p < 0.05). The policy also significantly increased the per-capita income of providers in county hospitals and primary care institutions in 2021 (p < 0.01); however, we cannot quantitatively isolate the precise marginal contribution of the bundled payment policy to the observed income increases. Additionally, it had no significant impact on the satisfaction levels of either patients or healthcare providers (p > 0.05).

Conclusion

Bundled medical insurance payments in the CCMC do not add financial stress for patients and help low-income families. They also boost the income of healthcare providers. However, there is still a need for improvements to enhance overall satisfaction with the healthcare system.

A Cautionary Tale: Malaligned Incentives in Total Hip and Knee Arthroplasty Payment Model Reforms Threaten Promising Innovation and Access to Care

Over the past several years, there have been notable changes and controversies involving Medicare reimbursement for total hip (THA) and total knee arthroplasty (TKA). We have seen the development and implementation of experimental bundled payment model pilot programs goals of improving quality and decreasing overall costs of care during the last decade. Many orthopaedic surgeons have embraced these programs and have demonstrated the ability to succeed in these new models by implementing strategies, such as preservice optimization, to shift care away from inpatient or postdischarge settings and reduce postoperative complications. However, these achievements have been met with continual reductions in surgeon reimbursement rates, lower bundle payment target pricings, modest increases in hospital reimbursement rates, and inappropriate valuations of THA and TKA Common Procedural Terminology (CPT) codes. These challenges have led to an organized advocacy movement and spurred research involving the methods by which improvements have been made throughout the entire episode of arthroplasty care. Collectively, these efforts have recently led to a novel application of CPT codes recognized by payers to potentially capture presurgical optimization work. In this paper, we present an overview of contemporary payment models, summarize notable events involved in the review of THA and TKA CPT codes, review recent changes to THA and TKA reimbursement, and discuss future challenges faced by arthroplasty surgeons that threaten access to high-quality THA and TKA care.

Observed Differences in Patient Comorbidities and Complications Undergoing Primary Total Joint Arthroplasty Between Non-orthopaedic and Orthopaedic Referral Patients

BACKGROUND

Value-based total joint arthroplasty (TJA) has resulted in decreasing surgeon reimbursement which has created concern that surgeons are being incentivized to avoid medically complex patients. The purpose of this study was to determine if patients who underwent primary total knee (TKA) and total hip arthroplasty (THA) had different comorbidities and complication rates based on referral type: 1) non-orthopaedic referral (NOR), 2) outside orthopaedic referral (OOR) or 3) self-referral (SR).

METHODS

At a single tertiary care centre, patients undergoing primary TJA between July 2019 and January 2020 were identified using current procedural codes. Data were abstracted from the Institutional National Surgical Quality Improvement Program (NSQIP) along with electronic medical records which included referral type, primary insurance, demographics, comorbidities, and comorbidity scores, including an American Society of Anesthesiology (ASA) score. Complications and outcomes were tracked for 90 days post-operatively. Referral groups were compared using Chi-square exact tests for categorical variables and t-tests or Wilcoxon Rank Sum tests for continuous variables, as appropriate.

RESULTS

Of the 393 patients included in this study, there were 249 (63%) NOR, 104 (26%) OOR, and 40 (10%) SR. The OOR versus NOR group had a significantly greater proportion of patients with obesity (79 vs 64%, p=0.047) and an ASA score ≥3 (59 vs 43%, p=0.007). There was a significantly greater proportion of patients with wound complications (10 vs 4%, p=0.023) and ≥2 complications (14 vs 3%, p<0.001) in OOR versus NOR, respectively.

CONCLUSION

Patients who underwent primary TJA and were referred by an orthopaedic surgeon tended to have more comorbid conditions and higher rates of severe complications. The observed difference in referrals may be explained by monetary incentivization in the context of current reimbursement trends. Organizations utilizing bundled payment programs to reimburse surgeons should use a risk-stratification model to mitigate incentivizing surgeons to avoid medically complex patients.

A Review of 1228 In-Office Hand Surgery Procedures With Wide Awake Local Anesthesia No Tourniquet (WALANT) at a Single Private Practice

BACKGROUND

This study examined the complication rate of Wide Awake Local Anesthesia No Tourniquet (WALANT) technique in the clinic setting with field sterility at a single private practice. We hypothesized that WALANT is safe and effective with a low complication rate.

METHODS

This retrospective chart review included 1228 patients who underwent in-office WALANT hand procedures at a single private practice between 2015 and 2022. Patients were divided into groups based on type of procedure: carpal tunnel release, A1 pulley release, first dorsal compartment release, extensor tendon repair, mass excision, foreign body removal, and needle aponeurotomy. Patient demographics and complications were recorded; statistical comparisons of cohort demographics and risk factors for complications were completed, and P < .05 was considered significant for all statistical comparisons.

RESULTS

The overall complication rate for all procedures was 2.77% for 1228 patients including A1 pulley release (n = 962, 2.7%), mass excision (n = 137, 3.7%), extensor tendon repair (n = 23, 4.3%), and first dorsal compartment release (n = 22, 8.3%). Carpal tunnel release, foreign body removal, and needle aponeurotomy groups experienced no complications. No adverse events (e.g. vasovagal reactions, digital ischemia, local anesthetic toxicity, inadequate vasoconstriction) were observed in any group. Patients with known autoimmune disorders and those who were currently smoking had a statistically significant higher complication rate.

CONCLUSIONS

Office-based WALANT procedures with field sterility are safe and effective for treating common hand maladies and have a similar complication profile when compared to historical controls from the standard operating room in an ambulatory center or hospital.

Mark-Up Trends in Contemporary Medicare Primary and Revision Total Joint Arthroplasty

BACKGROUND

Understanding mark-up ratios (MRs), the ratio between a healthcare institution's submitted charge and the Medicare payment received, for high-volume orthopaedic procedures is imperative to inform policy about price transparency and reducing surprise billing. This analysis examined the MRs for primary and revision total hip and knee arthroplasty (THA and TKA) services to Medicare beneficiaries between 2013 and 2019 across healthcare settings and geographic regions.

METHODS

A large dataset was queried for all THA and TKA procedures performed by orthopaedic surgeons between 2013 and 2019, using Healthcare Common Procedure Coding System (HCPCS) codes for the most frequently used services. Yearly MRs, service counts, average submitted charges, average allowed payments, and average Medicare payments were analyzed. Trends in MRs were assessed. We evaluated 9 THA HCPCS codes, averaging 159,297 procedures a year provided by a mean of 5,330 surgeons. We evaluated 6 TKA HCPCS codes, averaging 290,244 procedures a year provided by a mean of 7,308 surgeons.

RESULTS

For knee arthroplasty procedures, a decrease was noted for HCPCS code 27438 (patellar arthroplasty with prosthesis) over the study period (8.30 to 6.62; P = .016) and HCPCS code 27447 (TKA) had the highest median (interquartile range [IQR]) MR (4.73 [3.64 to 6.30]). For revision knee procedures, the highest median (IQR) MR was for HCPCS code 27488 (removal of knee prosthesis; 6.12 [3.83-8.22]). While no trends were noted for both primary and revision hip arthroplasty, median (IQR) MRs in 2019 for primary hip procedures ranged from 3.83 (hemiarthroplasty) to 5.06 (conversion of previous hip surgery to THA) and HCPCS code 27130 (total hip arthroplasty) had a median (IQR) MR of 4.66 (3.58-6.44). For revision hip procedures, MRs ranged from 3.79 (open treatment of femoral fracture or prosthetic arthroplasty) to 6.10 (revision of THA femoral component). Wisconsin had the highest median MR by state (>9) for primary knee, revision knee, and primary hip procedures.

CONCLUSION

The MRs for primary and revision THA and TKA procedures were strikingly high, as compared to nonorthopaedic procedures. These findings represent high levels of excess charges billed, which may pose serious financial burdens to patients and must be taken into consideration in future policy discussions to avoid price inflation.

A Specialist-Led Care Model: Aligning the Patient and Specialist for the Greatest Impact

In the previous paper, discussing "Risk and the Future of Musculoskeletal Care," we reviewed the basic concepts of the risk corridor, implications on health care overall if we maintain a fee-for-service model, and the need for musculoskeletal specialists to begin taking on/managing risk to reinforce our presence in a "value-based care" system. This paper discusses the successes and failures of recent value-based care models and provides the framework for the paradigm of a specialist-led care model. We posit that orthopedic surgeons are the most knowledgeable physicians to manage musculoskeletal conditions, create new and innovative models, and lead value-based care to the next level.

Patients Who Have Kellgren-Lawrence Grade 3 and 4 Osteoarthritis Benefit Equally From Total Knee Arthroplasty

BACKGROUND

Recently, some payers have limited access to total knee arthroplasty (TKA) to patients who have Kellgren-Lawrence (KL) grade 4 osteoarthritis only. This study compared the outcomes of patients who have KL grade 3 and 4 osteoarthritis after TKA to determine if this new policy is justified.

METHODS

This was a secondary analysis of a series originally established to collect outcomes for a single, cemented implant design. A total of 152 patients underwent primary, unilateral TKA at two centers from 2014 to 2016. Only patients who had KL grade 3 (n = 69) or 4 (n = 83) osteoarthritis were included. There was no difference in age, sex, American Society of Anesthesiologists score, or preoperative Knee Society Score (KSS) between the groups. Patients who had KL grade 4 disease had a higher body mass index. KSS and Forgotten Joint Score (FJS) were collected preoperatively and at 6 weeks, 6 months, 1 year, and 2 years postoperatively. Generalized linear models were used to compare outcomes.

RESULTS

Controlling for demographics, improvements in KSS were comparable between the groups at all time points. There was no difference in KSS, FJS, and the proportion that achieved the patient acceptable symptom state for FJS at 2 years.

CONCLUSION

Patients who had KL grade 3 and 4 osteoarthritis experienced similar improvement at all time points up to 2 years after primary TKA. There is no justification for payers to deny access to surgical treatment for patients who have KL grade 3 osteoarthritis and have otherwise failed nonoperative treatment.