Can Bundled Payments Be Successful in the Medicaid Population for Primary Joint Arthroplasty?

Although some bundled payment models have had success in total joint arthroplasty, concerns exist about access to care for higher cost patients who use more resources. The purpose of this study is to determine whether Medicaid patients have increased hospital costs and more resource utilization in a 90-day episode of care than Medicare or privately insured patients.

We retrospectively reviewed a consecutive series of 7268 primary hip and knee arthroplasty patients at a single institution. Using a propensity score-matching algorithm for demographic variables, we matched the 92 consecutive Medicaid patients with 184 privately insured and 184 Medicare patients. Hospital-specific costs, discharge disposition, complications, and 90-day readmissions were analyzed.

Medicaid patients had higher mean inpatient hospital costs than both of the matched Medicare and privately insured groups ($15,396 vs $12,165 vs $13,864, P < .001) with longer length of stay (3.34 vs 2.49 vs 1.46 days, P < .001). Medicaid and Medicare patients were more likely to be discharged to a rehabilitation facility than privately insured patients (17% vs 21% vs 1%, P < .001). When controlling for demographic factors and comorbidities, Medicaid insurance was a significant independent risk factor for increased hospital costs (odds ratio 3.64, 95% confidence interval 1.80-7.38, P < .001).

Because of increased hospital costs, current bundled payment models should not include Medicaid patients because of concerns about patient selection and access to care. Further study is needed to determine whether bundling Medicaid arthroplasty costs in a stand-alone program with a separate target price will result in improved outcomes and decreased costs.