Should Medicaid Patients Be Included in Joint Replacement Bundled Payment Models?

    A study presented at the AAOS Annual Meeting addressed this issue, examining the impact of resource utilization among Medicaid, Medicare, and private payer patients in a busy joint replacement practice.

    With recent changes to the Comprehensive Care for Joint Replacement model and the anticipated October launch of the Bundled Payments for Care Improvement Advanced model, the Centers for Medicare and Medicaid Services (CMS) is clearly signaling a commitment to new reimbursement schemes for Medicare patients undergoing total joint arthroplasty.

    But what about the other patient population CMS serves – the Medicaid patients? Should they be included in joint replacement bundles too?

    The answer is probably yes, but not under the current iterations of the bundles, according to research reported at the 2018 Annual Meeting of the American Academy of Orthopaedic Surgeons in New Orleans. The study, “Can Bundled Payments Be Successful in the Medicaid Population for Primary Joint Arthroplasty?” from Rush University Medical Center, was named one of the game-changing research papers presented at the Academy meeting.

    Although bundled payment demonstration projects for Medicaid patients have been authorized since 2012 under the Affordable Care Act, states have not been lining up to participate. Only Arkansas has a robust bundled payment program for joint replacement patients with Medicaid insurance.

    Comparing Costs for Different Populations

    To look more closely at the feasibility of including Medicaid patients in joint replacement bundled payment models, the researchers from Rush compared hospital costs in a 90-day episode of care for Medicaid versus Medicare and private payer patients in their practice.

    Ninety-two consecutive Medicaid patients who underwent total hip or total knee arthroplasty at Rush were matched with 184 privately insured and 184 Medicare patients, using a propensity score 2:1 algorithm for demographic variables and medical co-morbidities. For each patient, the researchers recorded:

    • Hospital-specific charges
    • Costs
    • Reimbursement
    • Discharge disposition
    • Complications
    • 90-day readmissions

    They found higher mean inpatient hospital costs for Medicaid patients than for Medicare or private payer patients ($15,396 vs $12,165 vs $13,864, respectively; P<0.001), with longer lengths of stay for the Medicaid population (3.34 days vs 2.49 days vs 1.46 days, respectively, P<0.001).

    Medicaid and Medicare patients were discharged to rehabilitation facilities after surgery more often than private payer patients (17% vs 21% vs 1%, respectively; P<0.001). No differences were seen among the groups for 90-day readmission rates or in-hospital complication rates.

    Using multivariate logistic regression analysis to control for demographics and co-morbidities, the researchers found that Medicaid insurance was the most significant independent risk factor for higher inpatient hospital costs (OR 3.64, 95% CI 1.80-7.38; P<0.001).

    Driving Up Hospital Costs

    “These patients had higher lengths of stay in our study, and that was really the largest driver of costs,” said P. Maxwell Courtney, MD, who was a fellow in adult reconstruction at Rush at the time of the study. He’s now with The Rothman Institute in Philadelphia, Pennsylvania.

    Dr. Courtney noted that previous research with Medicaid patients in general has shown higher resource utilization – particularly emergency department resources – fueled in part by lack of social support at home and issues with timely access to healthcare. So, the results were not really surprising. “Orthopaedic surgeons who take care of Medicaid patients understand that they utilize more resources,” he said.

    That doesn’t mean a bundled payment model would not work for Medicaid patients undergoing joint replacement surgery. “Our data show that [bundled payment models] could present an opportunity for cost savings in the Medicaid patient population,” Dr. Courtney said. “However, I would caution CMS against extrapolating their BPCI data, which has been quite a successful program for Medicare patients, to the Medicaid population, as these patients should have a higher target price in a bundle.”

    In fact, that was one of the goals of the study. “We needed to get our data out there to help policymakers understand why we shouldn’t expand the current bundled payment models to include these patients within the same target price,” Dr. Courtney said.

    More research will be needed, he said, to determine the particulars of a bundled payment model for Medicaid patient.


    Courtney PM, Edmiston T, Batko B, Levine BR. Can Bundled Payments Be Successful in the Medicaid Population for Primary Joint Arthroplasty? (Paper 275-GC). Presented at the 2018 Annual Meeting of the American Academy of Orthopaedic Surgeons, March 6-10, 2018, New Orleans, Louisiana.


    The study authors have no disclosures relevant to this article.