Changes in Discharge to Rehabilitation: Potential Unintended Consequences of Medicare Total Hip Arthroplasty/Total Knee Arthroplasty Bundled Payments, Should They Be Implemented on a Nationwide Scale?

Background: As a part of the 2010 Affordable Care Act, Medicare was committed to changing 50% of its reimbursement to alternative payment models by 2018. One strategy included introduction of “bundled payments” or a fixed price for an episode of care. Early studies of the first operative bundles for elective total hip and knee arthroplasty (THA/TKA) suggest changes in discharge to rehabilitation. It remains unclear the extent to which such changes affect patient well-being. In order to address these concerns, the objective of this study is to estimate projected changes in discharge to various type of rehabilitation, 90-day outcomes, extent of therapy received, and patient health-related quality-of-life before and after introduction of bundled payments should they be implemented on a nationwide scale. Methods: A nationwide policy simulation was conducted using decision-tree methodology in order to estimate changes in overt and patient-centered outcomes. Model parameters were informed by published research on bundled payment effects and anticipated outcomes of patients discharged to various types of rehabilitation. Results: Following bundled payment introduction, discharge to inpatient rehabilitation facilities decreased by 16.9 percentage-points (95% confidence interval [CI] 16.5-17.3) among primary TKA patients (THA 16.8 percentage-points), a relative decline from baseline of 58.9%. Skilled nursing facility use fell by 24.0 percentage-points (95% CI 23.6-24.4). It was accompanied by a 36.7 percentage-point (95% CI 36.3-37.2) increase in home health agency use. Although simulation models predicted minimal changes in overt outcome measures such as unplanned readmission (TKA +0.8 percentage-points), changes in discharge disposition were accompanied by significant increases in the need for further assistive care (TKA +8.0 percentage-points) and decreases in patients’ functional recovery and extent of therapy received. They collectively accounted for a 30% reduction in recovered motor gains. Conclusion: The results demonstrate substantial changes in discharge to rehabilitation with accompanying declines in average functional outcomes, extent of therapy received, and health-related quality-of-life. Such findings challenge notions of reduced cost at no harm previously attributed to the bundled payment program and lend credence to concerns about reductions in access to facility-based rehabilitation.