CJR bundled payments may penalize hospitals that treat elderly, sickest patients

Editor's Note

Hospitals that care for the oldest, sickest, and most complicated patients could suffer financially under Medicare’s Comprehensive Care for Joint Replacement (CJR) bundled payment program, this study finds. The study analyzed data from more than 23,000 Michigan patients who had hip or knee replacements at 60 hospitals in a 3-year period.

Applying payment methods analogous to those Medicare intends to use to determine annual bonuses or penalties under the CJR program, the researchers found that hospitals operating on patients who had more health problems, were older, or were more seriously ill stood to lose more than $800 per patient.

If the program used a standard measure to adjust for patient complexity, however, those hospital payments could increase more than $100,000 per year.

The findings suggest that Medicare should include risk adjustment in the CJR program and in future bundled payment programs, the authors say.

1Chandy Ellimoottil (cellimoo{at}med.umich.edu ) is an assistant professor in the Department of Urology and the Institute for Healthcare Policy and Innovation at the University of Michigan, in Ann Arbor. He is also director of analytics for the Michigan Value Collaborative. 2Andrew M. Ryan is an associate professor in the Department of Health Management and Policy, University of Michigan.