An Analysis of Medicare Payment Policy for Total Joint Arthroplasty

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Abstract

Medicare facility payment policy for lower extremity total joint arthroplasty (TJA) has undergone extensive changes since 2005. The purpose of this study was to compare patient and procedure characteristics and resource use among TJA procedures and to identify predictors of resource use in TJA. Clinical, demographic, and economic data were analyzed from 6483 primary or revision TJA patients from 4 high-volume centers between October 2005 and June 2006. Descriptive analyses were conducted to evaluate differences between procedure types, and multivariable linear regression analyses were undertaken to identify predictors of resource use. Both patient severity of illness and surgical complexity influenced resource use associated with TJA procedures. As the primary goal of Medicare payment policy is to set payment rates proportional to relative resource use, both severity of illness and surgical complexity should be incorporated for payment equity and to minimize incentives for selection bias among hospitals that perform TJA procedures.

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Materials and Methods

A retrospective analysis of clinical, demographic, treatment, and economic data from 6483 primary and revision hip and knee arthroplasty procedures from 4 high-volume TJA centers was conducted (Table 1a, Table 1b). Patients were included in the study if they received either a primary or revision TJA from October 2005 through June 2006. Clinical factors included in the analysis were principal diagnosis on admission, APR-DRG SOI classification, presence of extensive bone loss, and surgical

Patient Demographic and Clinical Characteristics

The majority of primary and revision THA patients were women, and there were no differences in sex among procedure types, other than a significantly higher percentage of women (63%) who underwent isolated acetabular liner and femoral head exchange procedures (Table 2a, Table 2b. Similarly, the majority of primary and revision TKA patients were women, with the exception of femoral component only revisions (55% men) and tibial liner exchanges (52% men) (P < .01 for both comparisons). The average

Discussion

Medicare payment policy for lower extremity TJA procedures has evolved considerably over the past 3 years. Before 2005, all lower extremity arthroplasty procedures, regardless of patient characteristics (eg, comorbidities) or type of procedure (eg, primary vs revision), were lumped together under a single DRG (DRG 209). Previous investigators had reported significant differences in resource use between primary and revision TJA procedures 3, 4, 5, 6, 7, 8, 9, 10, 11. In October 2005, in response

Conclusions

By working with CMS to continue to evaluate policy-relevant differences in clinical characteristics and resource use among hip and knee arthroplasty patients and procedures, we recommended further refinements to the orthopedic DRGs based on differences in SOI and surgical complexity. These changes were adopted by CMS in the FY2008 Final Rule for the Inpatient Prospective Payment System. We believe these changes more closely accomplish CMS's goal of matching hospital reimbursement to resource

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Benefits or funds were received from Orthopaedic Research and Education Foundation.

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