Spillover Effects of Comprehensive Care for Joint Replacement (CJR) model

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Project Summary In an effort to improve quality of care while controlling costs, Medicare is moving away from traditional fee-for- service reimbursement to value-based payments. This shift may have significant ramifications beyond the Medicare population if it leads to practice-wide changes that affect all patients. Understanding the implications of these spillover effects on the larger health care system is critical for assessing the impacts of federal policy. We propose to investigate the spillover effects by studying one of Medicare's key value-based payments, the Comprehensive Care for Joint Replacement (CJR) program. In April 2016, Medicare introduced the CJR program – its first mandatory bundled payment program – for its patients undergoing hip and knee replacements (also called lower extremity joint replacements or LEJR). The program holds hospitals accountable for the cost and quality of the LEJR episode, defined as the inpatient stay and 90 days following hospital discharge. The CJR program was implemented in 67 randomly selected metropolitan statistical areas (MSAs), allowing for a causal estimate of spillover effects. Our long-term objective is to understand how innovative payment models for the Medicare population affect the broader health care system. Our central hypothesis is that CJR catalyzes practice-wide changes, therefore reducing overall health service use while maintaining the quality of care among Medicare Advantage and commercially-insured LEJR patients. We also hypothesize that the magnitude of spillover effects decreased when CJR participation became voluntary. Starting in January 2018, hospitals in 33 of the original 67 MSAs had the option to continue with or withdraw from the CJR program. This proposal has three specific aims. First, we aim to assess the spillover effects of CJR on health service use related to LEJR. Second, we aim to assess the spillover effects of CJR on quality of care and expenditures related to LEJR. Third, we aim to assess changes in the spillover effects of CJR when participation became voluntary in 33 of the original 67 MSAs. To accomplish these aims, we will use a claims database from the Health Care Cost Institute that includes 25% of all Medicare Advantage and commercial insurance enrollees in the nation, and conduct difference-in- differences analyses. The CJR program has the potential to affect care delivery and health care spending for patients beyond its target group. Our proposal will provide critical information in assessing the impact of federal policies on the health care system at large.