Medicare’s Comprehensive Care for Joint Replacement bundled payment program will penalize hospitals that care for sicker patients unless it is risk-adjusted, according to a new study.

The study, published in the journal Health Affairs, is based on an analysis of joint replacement procedures in Michigan between 2011 and 2013 and found that for every one standard deviation from the mean in patients’ medical complexity, the procedure cost the hospital an additional $827.

Without risk adjustment, the study concluded, the program could be financially harmful to hospitals that care for more medically complex patients – or it could end up reducing access to hip and knee replacements for such patients. Conversely, hospitals caring for healthier patients could reap a windfall in Medicare incentive payments.

Medicare’s Comprehensive Care for Joint Replacement bundled payment program was launched this spring in 67 geographic areas with 800 hospitals whose participation in the program was mandatory.

The question of whether Medicare should employ risk adjustment in its various programs continues to be one of the more controversial issues confronting Medicare.  NAUH has long argued for such risk adjustment, citing the greater challenges posed by the more medically complex patients private safety-net hospitals serve.

For a closer look at the study – how it was performed and what it found – go here for the Health Affairs article “Medicare’s New Bundled Payment For Joint Replacement May Penalize Hospitals That Treat Medically Complex Patients.”