Safety-net hospitals faced higher penalties, lower rewards under CJR model, study finds

Safety-net hospitals were less likely to receive awards and more likely to be penalized under Medicare's Comprehensive Care for Joint Replacement model than non-safety-net hospitals, according to a study published in JAMA Network.

The five-year CJR bundled payment model, mandated for roughly 700 hospitals, aims to improve quality and lower care costs for Medicare beneficiaries undergoing hip and knee replacements in 67 metropolitan areas.

The CJR model, which rewarded hospitals in its first and second year and introduced penalties during year two, doesn't consider worse outcomes and higher costs associated with vulnerable patients, according to researchers with the University of Rochester (Minn.), who conducted the study. To that effect, authors wanted to see how hospitals' safety-net status affected their penalties and awards under the program.

After examining CJR payment data for 2016-17, the researchers found 37 percent of safety-net hospitals in the program received a penalty in the second year of the program. That's compared to 14 percent of non-safety-net hospitals. For rewards, 31 percent of safety-net hospitals reaped them during the first and second years of the program, compared to 59 percent of non-safety-net hospitals.

Researchers also found for safety-net hospitals, the median penalty and reward per episode were $1,590 and $1,202, respectively. For non-safety-net hospitals, the median penalty and reward were $911 and $1,167, respectively.

"Possible explanations for the findings are that safety-net hospitals may provide lower-quality and higher-cost care or that CJR does not account for the increased social vulnerability of patients in safety-net hospitals," the study authors concluded. "Although CJR penalties may motivate hospitals to improve, the CJR may also exacerbate disparities by taking away financial resources that safety-net hospitals need for improving quality."

For the full study, click here.

More articles on healthcare finance:
CMS terminates Kentucky hospital's Medicare contract
Trump is drafting order to force healthcare cost disclosures, Wall Street Journal reports
10 latest hospital, health system credit downgrades

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars