A Cautionary Tale: Malaligned Incentives in Total Hip and Knee Arthroplasty Payment Model Reforms Threaten Promising Innovation and Access to Care

Abstract

Over the past several years, there have been notable changes and controversies involving Medicare reimbursement for total hip (THA) and total knee arthroplasty (TKA). We have seen the development and implementation of experimental bundled payment model pilot programs goals of improving quality and decreasing overall costs of care during the last decade. Many orthopaedic surgeons have embraced these programs and have demonstrated the ability to succeed in these new models by implementing strategies, such as preservice optimization, to shift care away from inpatient or postdischarge settings and reduce postoperative complications. However, these achievements have been met with continual reductions in surgeon reimbursement rates, lower bundle payment target pricings, modest increases in hospital reimbursement rates, and inappropriate valuations of THA and TKA Common Procedural Terminology (CPT) codes. These challenges have led to an organized advocacy movement and spurred research involving the methods by which improvements have been made throughout the entire episode of arthroplasty care. Collectively, these efforts have recently led to a novel application of CPT codes recognized by payers to potentially capture presurgical optimization work. In this paper, we present an overview of contemporary payment models, summarize notable events involved in the review of THA and TKA CPT codes, review recent changes to THA and TKA reimbursement, and discuss future challenges faced by arthroplasty surgeons that threaten access to high-quality THA and TKA care.

Keywords: Relative Value Scale Update Committee (RUC) review; bundled payment models; preoperative optimization; reimbursement; value-based care.