Background: Alternative payment models are becoming increasingly more common with the rising cost of the US health care. Bundled payment programs for elective hip and knee arthroplasty have shown promising results by improved outcomes and significant cost reduction.
Methods: All consecutive total joint arthroplasty with diagnosis-related group (DRG) 469/470 were included in this study. And 1427 episodes from 2009 to 2012 were defined as the baseline group; 461 episodes from October 2013 to September 2014 were defined as the Bundled Payments for Care Improvement (BPCI) group.
Results: BPCI group had a 14% reduction in cost per episode. The average length of stay decreased from 3.81 to 2.57 days. All-cause readmissions within 90 days of surgery decreased from 16% to 10%. The average cost of readmission decreased by 23%. Net Centers for Medicare and Medicaid Services (CMS) reconciliation payment for BPCI initiative participation was $1,012,962.79 for this 12-month study.
Conclusion: Our participation in the 2013-2014 CMS BPCI initiative for DRG 469/470 led to decreased readmissions and significant cost savings. In this study, minimizing hospital length of stay and discharging patients to home were the most effective strategies to achieve these outcomes.
Keywords: bundled payment; discharge disposition; length of stay; readmission; total hip arthroplasty; total knee arthroplasty.
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