Risk Adjustment Is Necessary in Medicare Bundled Payment Models for Total Hip and Knee Arthroplasty

Concerns exist that high-risk patients in alternative payment models may face difficulties with access to care without proper risk adjustment. The purpose of this study is to identify the effect of medical and orthopedic specific risk factors on the cost of a 90-day episode of care following total hip (THA) and knee arthroplasty (TKA).

We queried the Medicare 5% Limited Data Set for all patients undergoing primary THA and TKA from 2010 to 2014. To evaluate the cost of an episode of care, we calculated all claims for 90 days following surgery. Multivariate analysis was performed to quantify the added episode-of-care costs for demographic variables, geography, medical comorbidities, and orthopedic specific risk factors.

Of the 58,809 TKA patients, the median 90-day Medicare costs was $23,800 (interquartile range, $18,900-$32,300), while the median of the 27,293 THA patients was $24,000 (interquartile range, $18,500-$33,900). Independent risk factors (all P < .05) resulting in at least a 10% increase in episode-of-care costs following TKA included malnutrition, age over 85, male gender, pulmonary disorder, failed internal fixation, Northeast region, lower socioeconomic status, neurologic disorder, and rheumatoid arthritis. Independent risk factors (all P < .05) resulting in at least a 10% increase in episode-of-care costs following THA included malnutrition, male gender, age over 85, failed internal fixation, hip dysplasia, Northeast region, neurologic disorder, lower socioeconomic status, conversion THA, avascular necrosis, and depression.

Certain comorbidities and orthopedic risk factors increase 90-day episode-of-care costs in the Medicare population. The current lack of proper risk stratification could be a powerful driver of decreased access to care for our most medically challenged members of society.