In April 2016, Medicare introduced the Comprehensive Care for Joint Replacement (CJR) program, its first mandatory bundled payment program, for patientsundergoinghip orknee replacements. Approximately 800 hospitals in 67 metropolitan statistical areas were mandated to participate. The CJR holds hospitals accountable for the cost and quality of care of the entire episode of care that starts with the hospital admission and continuesuntil90days afterhospitaldischarge.If total episode spending is below the target rate and quality thresholds are met, hospitals receive reconciliation payments proportional to the difference between total episode spending and target rate. Starting in 2017, hospitals were required to repay Medicare if spending exceeded the target. The target rate in the first 3 years of the CJR program is a weightedmeanofeachhospitalshistoricalper-episodepayment rates and regional per-episode payment rates. Therefore, hospitalsthathadhistorical ratesabove regional rateshadtodecrease per-episode spendingmore to receive reconciliation payments thandidhospitalsthathad ratesbelow regionalmeans.Thispayment structuremightpenalizehospitalscaringforpatientsoflow socioeconomic status(ie, safety-net hospitals [SNHs]). Episode spending for these patients tends to be high because they have higher complication ratesandaremorelikely touseinstitutional postacute care for recovery.1-3 Therefore, we assessed the level of reconciliation payments by SNH status in the first year of the program. We also examined reconciliation payment levels by hospital size and teaching hospital status to understand different hospitals performance under the CJR program.
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