According to the Centers for Medicare & Medicaid Services (CMS), hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries. In 2014, there were more than 400,000 procedures, costing more than $7 billion for the hospitalizations. CMS says that there is little consistency across providers in terms of the quality and cost of care for these procedures.

With an aim to improve the consistency of the quality and cost of care among providers, CMS has introduced a new payment model, Comprehensive Care for Joint Replacement (CJR), in April 2016, using a concept known as bundled payments.

A significant aspect of this new model is that it contains exceptions to what will be reimbursed—exceptions that could prove potentially harmful to patients recovering from hip and knee replacements. Reconsidering these exceptions could go a long way in improving patient safety, reducing the number of readmissions, and reducing the cost of care for patients undergoing hip and knee replacement.


Comprehensive care for joint replacement (CJR): How it works

To understand how CJR works and its implications on patient care, it is helpful to understand how the system currently operates.

Consider a scenario:

A patient is admitted to a hospital and the doctor recommends undergoing surgery for major joint replacement (the example would also hold true in the event of the reattachment of a lower extremity). The patient goes into surgery, is then hospitalized after the operation, gets discharged, and continues her recovery from home.

The quality and cost of this episode of care—surgery, hospitalization, and recovery—varies considerably from hospital to hospital. For instance, according to the CMS, the rate of complications (e.g., infections, implant failures) can be three times as high at some hospitals, putting those patients cared for at increased risk. Simultaneously, the cost could range anywhere from $16,500 to $33,000 under the current fee-for-service model.

Under the CJR model, CMS provides bundled payments to hospitals for these kinds of surgeries. Bundled payment is the reimbursement of healthcare providers based on the expected costs of a clinically-defined episode of care like the one described above. It has been estimated that one-third of healthcare costs recovered by hospitals are through bundled payments, and that figure is increasing.

With CJR, CMS reimbursement includes all related items and services paid under Medicare Part A (e.g., inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery, and home health care) and under Medicare Part B (e.g. outpatient care, durable medical equipment, home health care, and some preventive services), with certain exceptions.

These exceptions are, at best, unfortunate and, at worst, potentially dangerous for patients.


CJR, bundled payments, and patient safety

After hip and knee surgery, patients are at risk for blood clots forming in their extremities, especially in their legs. This is known as deep vein thrombosis (DVT). When a blood clot breaks loose, it can potentially flow to the lungs and cause pulmonary embolism (PE), which can stop the flow of blood to the lungs. This entire process—the formation of blood clots that break loose and block blood flow to the lungs—is called venous thromboembolism (VTE).

VTE can be fatal in orthopedic patients, so doctors prescribe various treatments to prevent this from occurring. Some prophylaxis treatments are pharmacological (e.g., taking an anticoagulant to prevent DVT by thinning blood); others are nonpharmacological (e.g., walking around, wearing intermittent pneumatic compression devices (IPCDs) to prevent DVT by increasing blood flow and reducing venous stasis and venous dilatation).


Comparing pharmacological and nonpharmacological treatments

Both treatment options are equally effective at preventing blood clots but IPCDs are associated with lower risk of major bleeding.

Concerning is the exclusion of IPCDs (a significant exception to CJR) as a reimbursable treatment option for VTE prophylaxis at home under Medicare Part B—it may be significantly undermining efforts to keep patients safe from VTE occurrence due to the prolonged high risk after surgery.

The exception is puzzling for two reasons:

  1. The CJR bundled payment option reimburses for IPCD prescriptions under Medicare Part A and, therefore, recognizes their role in VTE prophylaxis treatment.
  2. Both VTE and bleeding each account for 6.3% of CJR readmissions, which trail only surgical site infections (18.8%) and prosthesis issues (7.5%) as the leading reasons for readmissions.

In addition to patient safety concerns, readmissions increase the cost of care and put a financial strain on the healthcare system in the United States. The exception of IPCDs from the bundled payment reimbursement needs to be re-evaluated.


Should IPCDs be covered under CJR?

By denying coverage of IPCDs under Medicare Part B:

  • Physicians may be unable to practice medicine in the best interests of their patients being discharged from the hospital.
  • Patients may be unable to receive quality-of-care in a cost-effective manner (see the SAFE Study for more information).

Patients need care that is based on evidence, not reimbursements. Bundled payment models such as CJR should be designed to encourage the safest, most clinically effective, most cost-efficient options.

Michael Wong, JD
Michael Wong, JD is the founder and Executive Director of the Physician-Patient Alliance for Health and Safety (PPAHS). He has been at the forefront in driving practical solutions that reduce healthcare costs, decrease medical errors, and improve patient health outcomes. He has been particularly active in these areas that most affect patient safety: • Improving patient adherence (i.e. helping patients to take their medications as prescribed by their physicians) • Enhancing patient access to healthcare • Reducing medical errors (PPAHS), is an advocacy group of physicians, patient advocates, and healthcare organizations. Supporters of and commenters for PPAHS include highly respected physicians and healthcare organizations, including the The Joint Commission, Anesthesia Patient Safety Foundation, Anesthesia Quality Institute, Johns Hopkins School of Medicine, Harvard Medical School, Stanford University School of Medicine, and the Cleveland Clinic.


  1. But wouldn’t it make sense for the quality thinking providers to just provide the IPCD anyhow within the bundled price whether it was considered/reimbursed or not? Thereby lowering their readmission risk and associated non-reimbursed costs for that. At the end of the day the idea is quality outcomes and lower costs at a fixed price. Or am I missing something here?

    And in regards to this “Physicians may be unable to practice medicine in the best interests of their patients being discharged from the hospital.” Is the practice of medicine always based on whether the doctor or provider is paid or not?

    • Currently under CMS bundled payment, there is a contradiction – pharmacological and mechanical prophylaxis are reimbursed while the patient is in-hospital, but upon discharge, only pharmacological prophylaxis is reimbursed. Physicians should have a broader array of reimbursable options for their patients to ensure the care provided is in the best health interests for each patient.


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