Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.
A new Medicare rule that took effect April 1, 2016 retools Medicare payments for hip and knee replacements. Patients with serious medical conditions such as heart disease, obesity, diabetes, and lung ailments may not be able to find an orthopaedic surgeon willing to perform the joint replacement because hospitals face financial incentives to avoid patients with a high risk of complications.
Hospitals will be given a “target price” for total joint replacements for the patient’s entire care from the hospital stay to outpatient rehabilitation through 90 days after discharge, according to a new rule from the Center for Medicare Services. If the reimbursement is less than the target price, the hospital may receive an additional payment from Medicare as an incentive for good outcomes. On the other hand, the hospital may be required to pay back part of their reimbursement that goes above the target. The rule is intended to control costs on the $7 Billion Medicare spends for hospital care and for almost one-half million beneficiaries who receive a hip or knee replacement each year. However, since Medicare will pay only one “bundled payment” for the patient’s entire care after total joint replacement surgery, the hospital will be accountable for the quality of care through the incentives and penalties. The surgeon shares responsibility when a patient is re-admitted to the hospital and receives a “black mark” even when the re-admission has nothing to do with the joint replacement. An unintended consequence of this payment model may be “cherry picking” of low risk patients. Patients claiming a work-related connection to joint replacement surgery who have been denied by Medicare may face additional hurdles in obtaining their surgery.