Federal health officials are proposing a major change in the way Medicare pays for hip and knee replacements, requiring hospitals to partly repay the government if patients get avoidable infections and other complications but rewarding them with extra payments if patients do well.
The proposal announced Thursday by the Centers for Medicare and Medicaid Services is part of the Obama administration’s efforts to overhaul the health-care system, in part by using the payment system to reward quality of care rather than volume of services. Under the current system, doctors and hospitals typically get paid set fees for every procedure they perform, regardless of how patients fare.
The proposal is designed to hold hospitals accountable for an entire episode of care, from surgery through 90 days after discharge. That way, hospitals would have an incentive to work with doctors, home health agencies and nursing facilities to make sure patients get the coordinated care they need, reducing avoidable complications and re-hospitalizations.
The experiment will “treat these surgeries as one complete service rather than a collection of individual services,” Health and Human Services Secretary Sylvia Mathews Burwell told reporters. She likened the various care providers involved to the parts of a symphony orchestra: “Only by working together [are we] going to get the music to come alive.”
The new payment method would be used in 75 areas across the country, affecting 800 hospitals and an estimated 100,000 patients a year. Officials hope to save $150 million over the five-year demonstration period.
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Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
