New Federal Payment Structure for hip and knee surgery in hospitals


    A five years proposal – in collaboration with Obama administration – had been set up by Federal Government in creating a certain reformation in payment structure for many hospitals with particular reference to hip and knee surgeries.

    The proposal put forward strategies for extra payment offerings and imposed certain penalties (in case of operation outcomes).

    It is a good move towards a healthcare system to benefit paying providers with a quality medical care instead of minor procedures like blood tests and x-rays.

    Studies show that in year 2013, Medicare spent US$ 7 billion on hospitalizations solely for knee and hip surgeries – managed specifically on behalf of federacy for senior citizens. In this proposal, approximately one quarter of those procedures had been incorporated.

    “We are asking health-care providers that offer hip and knee replacements to treat these surgeries as one complete service instead of a collection of individual services. We are committed to changing our health-care system to pay for quality over quantity, so that we spend our dollars more wisely and improve care for patients. By focusing on episodes of care, rather than a piecemeal system, hospitals and physicians have an incentive to work together to deliver more effective and efficient care.” – Health and Human Services Secretary, Sylvia Burwell

    If the proposal related to hip and knee replacements is approved, it could take effect as soon as by the next year at more than 800 hospitals (even in cities including New York and Los Angeles, Lubbock, Tex., and Flint, Mich). Moreover, an estimated 25 percent of the 400,000 such surgeries performed every year would be covered by this new payment structure, which for in affected region would be mandatory in hospitals.

    “The rate of complications like infections or implant failures after surgery can be more than three times higher at some facilities than others, which lead to hospital readmissions and prolonged recoveries. And the average Medicare expenditure for surgery, hospitalization and recovery ranges from US$ 16,500 to US$ 33,000 across geographic areas. This variation is partly due to the way Medicare beneficiaries receive care. Incentives to coordinate the whole episode of care – from surgery to recovery – are not strong enough, and a patient’s health may suffer as a result.” – Centers for Medicare and Medicaid Services

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