What Factors are Associated With 90-day Episode-of-care Payments for Younger Patients With Total Joint Arthroplasty?

BACKGROUND: Total joint arthroplasty (TJA) has been identified as a procedure with substantial variations in inpatient and postacute care payments. Most studies in this area have focused primarily on the Medicare population and rarely have characterized the younger commercially insured populations. Understanding the inpatient and postdischarge care service-component differences across 90-day episodes of care and factors associated with payments for younger patients is crucial for successful implementation of bundled payments in TJA in non-Medicare populations.

PURPOSE: (1) To assess the mean total payment for a 90-day primary TJA episode, including the proportion attributable to postdischarge care, and (2) to evaluate the role of procedure, patient, and hospital-level factors associated with 90-day episode-of-care payments in a non-Medicare patient population younger than 65 years.

METHOD: Claims data for 2008 to 2013 from Blue Cross Blue Shield of Texas were obtained for primary TJAs. A total of 11,131 procedures were examined by aggregating payments for the index hospital stay and any postacute care including rehabilitation services and unplanned readmissions during the 90-day postdischarge followup period. A three-level hierarchical model was developed to determine procedure-, patient-, and hospital-level factors associated with 90-day episode-of-care payments.

RESULTS: The mean total payment for a 90-day episode for TJA was USD 47,700 adjusted to 2013 USD. Only 14% of 90-day episode payments in our population was attributable to postdischarge-care services, which is substantially lower than the percentage estimated in the Medicare population. A prolonged length of stay (rate ratio [RR], 1.19; 95% CI, 1.15-1.23; p ≤ 0.001), any 90-day unplanned readmission (RR, 1.64; 95% CI, 1.57-1.71; p ≤ 0.001), computer-assisted surgery (RR, 1.031; 95% CI, 1.004-1.059; p ≤ 0.05), initial home discharge with home health component (RR, 1.029; 95% CI, 1.013-1.046; p ≤ 0.001), and very high patient morbidity burden (RR, 1.105; 95% CI, 1.062-1.150; p ≤ 0.001) were associated with increased TJA payments. Hospital-level factors associated with higher payments included urban location (RR, 1.29; 95% CI, 1.17-1.42; p ≤ 0.001), lower hospital case mix based on average relative diagnosis related group weight (RR, 0.94; 95% CI, 0.89-0.95; p ≤ 0.001), and large hospital size as defined by total discharge volume (RR, 1.082; 95% CI, 1.009-1.161; p ≤ 0.05). All procedure, patient, and hospital characterizing factors together explained 11% of variation among hospitals and 49% of variation among patients.

CONCLUSION: Inpatient care contributed to a much larger proportion of total payments for 90-day care episodes for primary TJA in our younger than 65-year-old commercially insured population. Thus, inpatient care will continue to be an essential target for cost-containment and delivery strategies. A high percentage of hospital-level variation in episode payments remained unexplained by hospital characteristics in our study, suggesting system inefficiencies that could be suitable for bundling. However, replication of this study among other commercial payers in other parts of the country will allow for conclusions that are more robust and generalizable.

LEVEL OF EVIDENCE: Level II, economic analysis.