Is Your Orthopedic Service Line Positioned to Assume Risk for Joint Replacement Surgery?

Is your hospital prepared to bear financial risk among your Medicare patient population for total joint replacement (TJR) surgery?  Last week CMS proposed a Comprehensive Care for Joint Replacement (CCJR) model, scheduled to begin as early as next year. It is part of CMS’s ongoing effort to transition away from fee-for-service (FFS) payments and toward reimbursing physicians based on the quality of care they provide.

Based on the Bundled Payments for Care Improvement initiative, the CCJR encourages providers to focus on episodes of care for hip and knee replacements, which are common surgeries among Medicare beneficiaries. The CCJR is a retrospective bundled payment model, meaning all providers would be paid under an FFS model throughout a given year.  At the end of that year, actual costs would be compared to a target episode price.  Organizations that perform below the target episode price will receive an additional payment, whereas organizations that exceed the target will incur a penalty.

Under the 5-year model, hospitals and health systems in 75 metropolitan statistical areas selected by CMS will be required to participate beginning January 1, 2016. Organizations that have been positioning for value-based care delivery are poised to thrive in this new payment model. Those that are not ready to bear risk will need to evaluate their program and determine what changes will need to be made to optimize performance going forward.

Over the next several weeks, we’ll take a closer look at the CCJR and the impact the initiative will have on orthopedics providers. We begin today by examining characteristics that are common to organizations that are positioned to take on risk. These hospitals and health systems have coordinated, comprehensive joint programs that focus on pre-acute, acute, and post-acute care.


Effective joint replacement programs employ universal standards when selecting TJR candidates and clearly establish expectations for patients and their families.

● Selection criteria based on the patient’s weight, smoking status, and other comorbidities
● Presurgical education to set expectations regarding the surgical procedure and post-operative recovery with patients and their families
● Presurgical testing and treatment to be sure comorbidities are identified and that patients’ health status is optimized prior to TJR.


Consistency, adherence to best practices, and communication among the care team help ensure successful TJR outcomes.

● Mutidisciplinary teams consisting of orthopedic surgeons, anesthesiologists, rehabilitation and physical therapists, hospitalists, and care management personnel, working in concert to ensure that patient care is delivered in the most effective manner.
● Standardized care protocols that guide the postoperative hospital stay and discharge process


A well-conceived post-acute plan can promote a successful recovery for patients, reduce complications, and lower readmission rates.

● Standardized care pathways that guide skilled nursing facility, home health, and physical therapy care during the 90-day, post-discharge period to ensure optimal outcomes for each patient
● Preferred relationships with post-acute providers that accept and implement the standard care pathways established by the TJR program

If your TJR program does not possess these characteristics, it’s time to determine which practices and competencies you need to adopt.  You cannot wait until October, when Medicare’s final rule will be issued, to ensure that your organization is positioned to bear risk for a TJR episode of care.

Look for future blog posts in the coming weeks to understand more about the structural elements of a bundled payment, including operational, funds flow, and physician alignment requirements.

This entry was posted in Healthcare Reform, Orthopedics/Musculoskeletal, Service Line Planning, Service Line Strategy and tagged , , , , , by Todd Godfrey. Bookmark the permalink.

About Todd Godfrey

With nearly 15 years of healthcare experience, Todd has assisted numerous clients with issues pertaining to the physician enterprise, including serving as the interim executive director of a large, multispecialty medical group. Todd's ability to build working, trusted relationships with both senior hospital leadership and physicians contributes to his successful facilitation of hospital/physician alignment transactions. In addition, he is able to gain an in-depth understanding of operational and performance issues and develop detailed financial turnaround implementation plans for clients. He has successfully designed physician compensation methodologies, as well as developed and implemented orthopedic service lines. Prior to joining ECG, Todd gained extensive experience in physician practice operations, performance improvement, and project management through his prior roles at both Boston Medical Center and Brigham and Women’s Hospital. Todd graduated from Boston University School of Management with a master of business administration degree in health sector management. He also holds a bachelor of science degree in biology from Eckerd College in St. Petersburg, Florida.

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