The Impact of Medicare Bundled Payments

February 16, 2022 updated by: Amy Finkelstein

The Impact of Medicare Bundled Payments: Evidence From a Nationwide Randomized Evaluation for Lower Extremity Joint Replacement

Bundled payments (BP) are a key part of Medicare's shift away from the traditional fee-for-service (FFS) payment model. The investigators propose to study a nationwide randomized-controlled trial (RCT) of bundled payments for knee and hip replacements that was designed and implemented by CMS and launched in April 2016. Randomization was conducted at the Metropolitan Statistical Area (MSA) level with 67 MSAs and about 800 hospitals assigned to the treatment group. The investigators will examine the impact of bundled payments on Medicare spending, utilization, and quality. Study findings should be directly relevant for the design of payments for knee and hip replacements, two common and expensive medical procedures. Average impacts, as well as variation in impact across types of providers and markets may also shed light on economic mechanisms, which should be relevant for bundled payment initiatives under consideration for other medical services.

Study Overview

Status

Status

Indicates the current recruitment status or the expanded access status.
Completed

Conditions

Conditions

The disease, disorder, syndrome, illness, or injury that is being studied. On ClinicalTrials.gov, conditions may also include other health-related issues, such as lifespan, quality of life, and health risks.

Intervention / Treatment

Intervention / Treatment

A process or action that is the focus of a clinical study. Interventions include drugs, medical devices, procedures, vaccines, and other products that are either investigational or already available. Interventions can also include noninvasive approaches, such as education or modifying diet and exercise.

Study Type

Study Type

Describes the nature of a clinical study. Study types include interventional studies (also called clinical trials), observational studies (including patient registries), and expanded access.
Interventional

Enrollment (Actual)

Enrollment

The number of participants in a clinical study. The "anticipated" enrollment is the target number of participants that the researchers need for the study.
196

Phase

Phase

The stage of a clinical trial studying a drug or biological product, based on definitions developed by the U.S. Food and Drug Administration (FDA). The phase is based on the study's objective, the number of participants, and other characteristics. There are five phases: Early Phase 1 (formerly listed as Phase 0), Phase 1, Phase 2, Phase 3, and Phase 4. Not Applicable is used to describe trials without FDA-defined phases, including trials of devices or behavioral interventions.
  • Not Applicable

Participation Criteria

Researchers look for people who fit a certain description, called eligibility criteria. Some examples of these criteria are a person's general health condition or prior treatments.

Eligibility Criteria

Eligibility Criteria

The key requirements that people who want to participate in a clinical study must meet or the characteristics they must have. Eligibility criteria consist of both inclusion criteria (which are required for a person to participate in the study) and exclusion criteria (which prevent a person from participating). Types of eligibility criteria include whether a study accepts healthy volunteers, has age or age group requirements, or is limited by sex.

Ages Eligible for Study

  • ADULT
  • OLDER_ADULT
  • CHILD

Accepts Healthy Volunteers

No

Genders Eligible for Study

All

Description

Inclusion Criteria:

  • Acute care hospital paid under the inpatient prospective payment system (IPPS)
  • Hospital admission for major joint replacement or reattachment of lower extremity with and without major complications or comorbidities (MS-DRG 469 and 470)

Exclusion Criteria:

  • MSA exclusion criteria:
  • MSAs with low volume of LEJR
  • MSAs with high take-up of BPCI
  • MSAs with large share of LEJR in Maryland hospitals
  • Hospital exclusion criteria:
  • Hospitals participating in certain models of BPCI.
  • Patient exclusion criteria (the episode is cancelled if any of the following occurs during the episode):
  • Patient not covered by both Medicare Parts A and B
  • Patient eligibility for Medicare is due to end stage renal disease (ESRD)
  • Patient is in a managed care plan
  • Patient is in a United Mine Workers of America Plan
  • Medicare is not the primary payer for the patient
  • Patient dies during the episode
  • Patient is re-admitted to an ACH for one of the two CJR DRGs during the episode
  • Patient initiates an LEJR episode under BPCI during the episode
  • Payments and services that occur in the episode that are excluded are:
  • hemophilia clotting factors
  • new technology add-on payments
  • transitional pass-through payment for medical devices
  • payments from certain incentive programs
  • otherwise included payments that exceed two standard deviations of the regional mean
  • services unrelated to the index admission as defined by CMS (including certain inpatient hospital stays, Part B services, and per beneficiary per month (PBPM) payments).

Study Plan

This section provides details of the study plan, including how the study is designed and what the study is measuring.

How is the study designed?

Design Details

  • Primary Purpose: HEALTH_SERVICES_RESEARCH
  • Allocation: RANDOMIZED
  • Interventional Model: PARALLEL
  • Masking: NONE

Arms and Interventions

Participant Group / Arm

Participant Group / Arm

A group or subgroup of participants in a clinical trial that receives a specific intervention/treatment, or no intervention, according to the trial's protocol.
Intervention / Treatment

Intervention / Treatment

A process or action that is the focus of a clinical study. Interventions include drugs, medical devices, procedures, vaccines, and other products that are either investigational or already available. Interventions can also include noninvasive approaches, such as education or modifying diet and exercise.
NO_INTERVENTION: Control
No intervention
EXPERIMENTAL: Experimental
Bundled payments for knee and hip replacement
Other: Bundled payments for knee and hip replacement
The bundled payment model holds acute care hospitals (ACHs) financially responsible for the spending and quality of an entire episode of care for two types of hospital admissions: MS-DRG 469 and 470. An episode begins with an ACH stay that results in a discharge in one of the two DRGs, and ends 90 days after discharge. Before each performance year begins, hospitals receive target prices from CMS, determined by historical hospital and regional episode expenditures. Hospitals are eligible for reconciliation payment from CMS if they spend less than the target prices for an episode, provided that they met an "acceptable" quality standard. Conversely, they are responsible for paying the difference if they spend more than the target prices.

What is the study measuring?

Primary Outcome Measures

Primary Outcome Measures

In a clinical study's protocol, the planned outcome measure that is the most important for evaluating the effect of an intervention/treatment. Most clinical studies have one primary outcome measure, but some have more than one.
Outcome Measure
Measure Description
Time Frame
Share of LEJR admissions discharged to institutional Post-Acute Care (PAC)
Time Frame: At hospital discharge up to 3 days
Share of lower extremity joint replacement (LEJR) index admissions discharged to institutional post-acute care facilities (i.e. skilled nursing facilities (SNF), long term care hospitals (LTCH) or inpatient rehabilitation facilities (IRF)). LEJR index admissions are eligible admissions at acute care hospitals (ACH) that result in a discharge in either DRG 469 or 470.
At hospital discharge up to 3 days

Secondary Outcome Measures

Secondary Outcome Measures

In a clinical study's protocol, a planned outcome measure that is not as important as the primary outcome measure for evaluating the effect of an intervention but is still of interest. Most clinical studies have more than one secondary outcome measure.
Outcome Measure
Measure Description
Time Frame
Share of LEJR admissions discharged to any Post Acute Care (PAC)
Time Frame: At hospital discharge up to 3 days
Share of LEJR index admissions discharged to any PAC, which includes Institutional Post Acute Care (SNF, LTCH, IRF) plus home health agency. LEJR index admissions are eligible admissions at acute care hospitals (ACH) that result in a discharge in either DRG 469 or 470.
At hospital discharge up to 3 days
Number of days in Institutional PAC during episode
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
number of days in institutional PAC facilities (sum of length of stays in SNF, LTCH and IRF)
Begins with index admission and ends 90 days post-discharge from index admission
Total covered Medicare payments during episode
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
Total covered Medicare payments are defined as the total amount of Medicare Part A and part B Fee-for-Service (FFS) payments that are included in the bundle. Note that, as defined, total covered Medicare payments are the payments that would be made in the absence of Bundled Payments (i.e. payments that would occur under FFS Medicare). These are counterfactual for the treatment MSAs. If the data become available, the investigators plan to also look at actual payments made during the episode (which would include any reconciliation payments or repayments to or from hospitals in the treatment MSAs).
Begins with index admission and ends 90 days post-discharge from index admission
Total covered Medicare payments for Institutional PAC during episode
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
Begins with index admission and ends 90 days post-discharge from index admission
Total covered Medicare payments for any PAC during episode
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
Begins with index admission and ends 90 days post-discharge from index admission
Total beneficiary payments owed out of pocket during episode
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
Begins with index admission and ends 90 days post-discharge from index admission

Other Outcome Measures

Other Outcome Measures

For clinical trials, a planned measurement described in the protocol that is used to determine the effect of an intervention/treatment on participants. For observational studies, a measurement or observation that is used to describe patterns of diseases or traits, or associations with exposures, risk factors, or treatment. Types of outcome measures include primary outcome measure and secondary outcome measure.
Outcome Measure
Measure Description
Time Frame
Any THA/TKA complication
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
The total hip arthroplasty/total knee arthroplasty (THA/TKA) complication measure is a facility-level risk-standardized 90-day complication rate for total hip and total knee arthroplasty and is part of the targeted quality measure. However this component of the targeted quality measure is a three-year moving average. While it may not be feasible to replicate the measure, the investigators will code the underlying the eight "complications", which are heart attack, pneumonia, or sepsis/septicemia/shock within seven days of admission, surgical site bleeding, pulmonary embolism, or death within 30 days of admission, and mechanical complications or periprosthetic joint/wound infection within 90 days of admission. The proposed measure is an indicator for whether any of the eight THA/TKA complications occur.
Begins with index admission and ends 90 days post-discharge from index admission
Number of THA/TKA complications
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
The total hip arthroplasty/total knee arthroplasty (THA/TKA) complication measure is a facility-level risk-standardized 90-day complication rate for total hip and total knee arthroplasty and is part of the targeted quality measure. However this component of the targeted quality measure is a three-year moving average. While it may not be feasible to replicate the measure, the investigators will code the underlying the eight "complications", which are heart attack, pneumonia, or sepsis/septicemia/shock within seven days of admission, surgical site bleeding, pulmonary embolism, or death within 30 days of admission, and mechanical complications or periprosthetic joint/wound infection within 90 days of admission. The proposed measure is the number of THA/TKA complications that occur.
Begins with index admission and ends 90 days post-discharge from index admission
Share of LEJR admissions with an ER visit within 90-days of discharge from index admission
Time Frame: Begins with index admission and ends 90 days post-discharge from index admission
Begins with index admission and ends 90 days post-discharge from index admission
90-day all-cause readmission
Time Frame: 90 days post-discharge from index admission
90 days post-discharge from index admission
Number of covered procedures
Time Frame: Duration of hospital stay - average 3 days
Duration of hospital stay - average 3 days
Complexity of patient mix for LEJR procedures, measured by patient demographics
Time Frame: Duration of hospital stay - average 3 days
The complexity of patient mix for LEJR procedures is measured by the projected episode payment using patient demographics. The investigators will generate projected episode payment based on coefficients from a regression of episode payment on patient demographics in the pre-period, controlling for MSA fixed effect. The set of patient demographics include fully interacted five-year-age-bin, race, and sex dummies, dummy for Medicaid status, and dummy for disability.
Duration of hospital stay - average 3 days
Complexity of patient mix for LEJR procedures, measured by patient demographics and comorbidities
Time Frame: Duration of hospital stay - average 3 days
The complexity of patient mix for LEJR procedures is measured by the projected episode payment using patient characteristic, including both demographic and comorbidity measures. The investigators will generate projected episode payment based on coefficients from a regression of episode payment on patient characteristics in the pre-period, controlling for MSA fixed effect. The set of patient characteristics include fully interacted five-year-age-bin, race, and sex dummies, dummy for Medicaid status, dummy for disability, dummies for Charlson comorbidities, and dummy for major complication or comorbidity (MCC).
Duration of hospital stay - average 3 days
1 year total covered Medicare payments
Time Frame: one year since index admission
one year since index admission
1 year mortality
Time Frame: one year since index admission
one year since index admission
1 year all-cause readmission
Time Frame: one year since index admission
one year since index admission
1 year outpatient opioid use
Time Frame: one year since index admission
one year since index admission

Collaborators and Investigators

This is where you will find people and organizations involved with this study.

Sponsor

Sponsor

The organization or person who initiates the study and who has authority and control over the study.
Amy Finkelstein

Collaborators

Collaborators

An organization other than the sponsor that provides support for a clinical study. This support may include activities related to funding, design, implementation, data analysis, or reporting.
University of Chicago
Dartmouth College
Harvard University

Investigators

Investigators

A researcher involved in a clinical study. Related terms include site principal investigator, site sub-investigator, study chair, study director, and study principal investigator.
  • Principal Investigator: Amy N Finkelstein, PhD, Massachusetts Institute of Technology
  • Principal Investigator: Yunan Ji, Harvard University
  • Principal Investigator: Neale Mahoney, PhD, University of Chicago
  • Principal Investigator: Jon Skinner, PhD, Dartmouth College

Publications and helpful links

The person responsible for entering information about the study voluntarily provides these publications. These may be about anything related to the study.

General Publications

Study record dates

These dates track the progress of study record and summary results submissions to ClinicalTrials.gov. Study records and reported results are reviewed by the National Library of Medicine (NLM) to make sure they meet specific quality control standards before being posted on the public website.

Study Major Dates

Study Start (ACTUAL)

Study Start

The actual date on which the first participant was enrolled in a clinical study. The "anticipated" study start date is the date that the researchers think will be the study start date.
April 1, 2016

Primary Completion (ACTUAL)

Primary Completion

The date on which the last participant in a clinical study was examined or received an intervention to collect final data for the primary outcome measure. Whether the clinical study ended according to the protocol or was terminated does not affect this date. For clinical studies with more than one primary outcome measure with different completion dates, this term refers to the date on which data collection is completed for all the primary outcome measures. The "anticipated" primary completion date is the date that the researchers think will be the primary completion date for the study.
December 1, 2017

Study Completion (ACTUAL)

Study Completion

The date on which the last participant in a clinical study was examined or received an intervention/treatment to collect final data for the primary outcome measures, secondary outcome measures, and adverse events (that is, the last participant's last visit). The "anticipated" study completion date is the date that the researchers think will be the study completion date.
February 1, 2022

Study Registration Dates

First Submitted

First Submitted

The date on which the study sponsor or investigator first submitted a study record to ClinicalTrials.gov. There is typically a delay of a few days between the first submitted date and the record's availability on ClinicalTrials.gov (the first posted date).
October 13, 2017

First Submitted That Met QC Criteria

First Submitted That Met QC Criteria

The date on which the study sponsor or investigator first submits a study record that is consistent with National Library of Medicine (NLM) quality control (QC) review criteria. The sponsor or investigator may need to revise and submit a study record one or more times before NLM's QC review criteria are met. It is the responsibility of the sponsor or investigator to ensure that the study record is consistent with the NLM QC review criteria.
January 16, 2018

First Posted (ACTUAL)

First Posted

The date on which the study record was first available on ClinicalTrials.gov after National Library of Medicine (NLM) quality control (QC) review has concluded. There is typically a delay of a few days between the date the study sponsor or investigator submitted the study record and the first posted date.
January 23, 2018

Study Record Updates

Last Update Posted (ACTUAL)

Last Update Posted

The most recent date on which changes to a study record were made available on ClinicalTrials.gov. There may be a delay between when the changes were submitted to ClinicalTrials.gov by the study's sponsor or investigator (the last update submitted date) and the last update posted date.
March 3, 2022

Last Update Submitted That Met QC Criteria

Last Update Submitted That Met QC Criteria

The most recent date on which the study sponsor or investigator submitted changes to a study record that are consistent with National Library of Medicine (NLM) quality control (QC) review criteria. It is the responsibility of the sponsor or investigator to ensure that the study record is consistent with the NLM QC review criteria.
February 16, 2022

Last Verified

Last Verified

The most recent date on which the study sponsor or investigator confirmed the information about a clinical study on ClinicalTrials.gov as accurate and current. If a study with a recruitment status of recruiting; not yet recruiting; or active, not recruiting has not been confirmed within the past 2 years, the study's recruitment status is shown as unknown.
February 1, 2022

More Information

Terms related to this study

Other Study ID Numbers

Other Study ID Numbers

Identifiers or ID numbers other than the NCT number that are assigned to a clinical study by the study's sponsor, funders, or others. These numbers may include unique identifiers from other trial registries and National Institutes of Health grant numbers.
  • JPAL-0740

Plan for Individual participant data (IPD)

Plan to Share Individual Participant Data (IPD)?

NO

Drug and device information, study documents

Studies a U.S. FDA-regulated drug product

No

Studies a U.S. FDA-regulated device product

No

This information was retrieved directly from the website clinicaltrials.gov without any changes. If you have any requests to change, remove or update your study details, please contact register@clinicaltrials.gov. As soon as a change is implemented on clinicaltrials.gov, this will be updated automatically on our website as well.

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