Episode-based payments, also known as bundled payments, are intended to incentivize hospitals and other providers to deliver more efficient care. However, some question whether hospitals in these models can take advantage of incentive structures in a way that undercuts the aim to deliver lower-cost care. One example is a hospital selecting low-risk patients for inpatient surgery when lower-cost outpatient surgery is just as appropriate.
Medicare’s Comprehensive Care for Joint Replacement (CJR) model offers bundled payments for hip and knee joint replacements. A Commonwealth Fund–supported study in JAMA Internal Medicine looked at six years of Medicare claims data for hospitals in CJR. Researchers estimated changes in episode savings as CJR transitioned from mandatory to voluntary in parts of the country and analyzed how responses by hospitals might explain changes in savings.