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Preparing for Value Based Payment in Total Joint Replacement Surgery

Posted by Barbara McClenathan on Sep 14, 2018 9:39:50 AM
Barbara McClenathan
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Over the past couple of years, we have heard much about Medicare’s pronouncement surrounding mandatory or voluntary participation in the Comprehensive Care for Joint Replacement Program (CJR).  The result is that many hospitals and orthopedic surgeons have dropped out of the voluntary program. Medicare’s payment model, as well as many private insurers have continued to develop value-based care models. 

The Hospital Value-Based Purchasing (VBP) Program has established payment based on the quality of care, rather than the quantity of services provided. For fiscal year (FY) 2018, the law requires that the applicable percent reduction, which is the portion of Medicare payments available to fund the program’s value-based incentive payments, remain at 2 percent of the base operating Medicare Severity Diagnosis-Related Group (MS-DRG) payment amounts for all participating hospitals.[1]  Hospitals will receive positive payment adjustments based on improved quality of care.

A hospital’s performance in Hospital Value-Based Purchasing (VBP) is based on measures/dimensions composed of the following:

FY 2019 & FY 2020 Scoring



Clinical Care


Person and Community Engagement




Efficiency and Cost Reduction



 “Orthopedics is the most important service line for most hospitals, and joints are where they make the most money,” says Jeffry Peters, chief executive officer (CEO) of Surgical Directions, a consulting company based in Chicago.[2] THA and TKA are the most common inpatient surgical procedures for Medicare patients, and Peters says every hospital his company is working with is focusing on improving value related to joint replacement surgery. It is important for hospitals, physicians and post-acute care facilities to develop programs aimed at providing cost effective, value-based care.

Changing hospital processes through adoption of evidence-based care standards and protocols can improve the quality and safety of care for tor total joint replacement patients. The implementation of specialized clinical pathways, using physician specific protocols, allows faster recovery and decreases the postoperative complication rate. 

Areas in which hospitals can act to improve the quality, safety and enhance the patients’ experiences of care during hospital stays are:

Phase I - Pre-Operative Enhancement

  1. Use of a pre-operative risk assessment tool to predict post-acute placement
  2. Patient joint replacement education to clearly outline activities before, during and after surgery. Including advice on medications, diet, exercise, dental care, smoking cessation, diabetic management, bathing and post-discharge planning
  3. Pre-habilitation for physical optimization and skills training for early ambulation
  4. Case management participation before admission

Phase II -  Acute care optimization

  1. Coordination by a navigation nurse to support a standardized plan of care
  2. Use of multimodal pain management protocols, regional blocks and limited use of opioids
  3. Physical therapy on the day of surgery to promote early ambulation
  4. Elimination of routine Foley catheter use
  5. Homogenous communication pathways to rapidly alert all care givers of preventable events
  6. Active case management participation for early discharge
  7. Initiation of discharge teaching on day of surgery


Phase III - Post- acute engagement

  1. Post discharge patient telephone communication and engagement tracking by the navigation nurse
  2. Admission to a preferred post-acute care facility or home care organization that provides regular feedback
As outcomes are increasingly tied to value-based hospital payment, preparing clinical pathways that embrace evidenced-based methods, better empowers patients and their healthcare providers. Initiating programs to enhance costs, quality, outcomes and patient experience, will allow hospitals to earn back a value-based incentive payment as well providing the best possible delivery of care.


[1] CMS Hospital Value-Based Purchasing Program Results for Fiscal Year 2018. (2017, Nov. 3) Retrieved from: https://www.cms.gov/newsroom/fact-sheets/cms-hospital-value-based-purchasing-program-results-fiscal-year-2018

[2] Saver, Cynthia (September 2018). Orthopedic bundled payment models on the fast track – Part 1. OR Manager, Vol. 34, No. 9. (pp. 1, 13-15, 17).

Tags: Value Based Payments, Value-based incentive payment, Comprehensive Care for Joint Replacement (CJR), CMS, Medicare Severity Diagnosis-Related Group (MS-DRG)

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