Dive Brief:
- Sixty percent of hospitals that will be impacted by Medicare’s mandatory new Comprehensive Care for Joint Replacement (CJR) model, slated to begin tomorrow, are likely to face penalties based on their current cost performance, according to a new Avalere analysis. Most hospitals in 67 regions will be required to participate.
- The approximately 800 hospitals involved will be noted for their quality and spending through each episode of care and will have their performance compared to their historical spending and to regional spending.
- Avalere's analysis concludes that episodes of care at 60% of the targeted hospitals currently cost more than those of other hospitals in their region, leaving the hospitals subject to penalties.
Dive Insight:
Given the mandatory model is new it is likely to prove a wake-up call to many providers who until now have not engaged in alternate payment models, Avalere Health senior vice president Josh Seidman says.
Aside from finding that many hospitals are likely to face penalties, Avalere also found 39% of total spending on hip and knee replacement episodes is due to post-discharge care, including through post-acute care facilities as well as hospital readmissions. Avalere highlights this will be the first time hospitals will be on the hook for controlling healthcare costs post-discharge and assuring patients get the care they need at the most cost effective setting. As a result of the high proportion of spending tied to post-discharge care, this is where hospitals should focus, the company says.
“The reality is that most hospitals don’t know where their patients go after they are discharged,” Avalere vice president Fred Bentley said in a prepared statement. “Their success under CJR will hinge on being able to track patients and partner with high-performing post-acute care providers."