An Analysis of Medicare Payment Policy for Total Joint Arthroplasty

Medicare facility payment policy for lower extremity total joint arthroplasty (TJA) has undergone extensive changes since 2005. The purpose of this study was to compare patient and procedure characteristics and resource use among TJA procedures and to identify predictors of resource use in TJA. Clinical, demographic, and economic data were analyzed from 6483 primary or revision TJA patients from 4 high-volume centers between October 2005 and June 2006. Descriptive analyses were conducted to evaluate differences between procedure types, and multivariable linear regression analyses were undertaken to identify predictors of resource use. Both patient severity of illness and surgical complexity influenced resource use associated with TJA procedures. As the primary goal of Medicare payment policy is to set payment rates proportional to relative resource use, both severity of illness and surgical complexity should be incorporated for payment equity and to minimize incentives for selection bias among hospitals that perform TJA procedures.