Government agencies change payment for joint replacement

March 23, 2016

Both the state and federal government are adopting bundled payments for total hip and knee replacements as an attempt to move to value based purchasing.  On March 17th, the state Health Care Authority announced  that Virginia Mason Hospital & Medical Center will serve as its center of excellence for state employees and others covered under the Public Employees Benefits Board plan.

Virginia Mason was selected through a competitive RFP process, under which the Authority could select up to five hospitals for care. Beginning in January 2017, the Health Care Authority will provide incentives for state employees to select Virginia Mason for this procedure – for example, not imposing a deductible or coinsurance for employees receiving care at this facility. In 2014, the Authority covered 622 hip or knee replacement surgeries for this group, with about 300 in King, Pierce, and Thurston counties. The bundled payment to Virginia Mason includes the entire range of care, including diagnosis, surgery, and rehabilitation, up to 30 days prior and 90 days post-procedure. The bundle is based on recommendations from the state’s Bree Collaborative.

Starting April 1st, the federal Centers for Medicare & Medicaid Services will also be adopting  bundled payments for Medicare patients with hip and knee replacements. The bundled payment approach applies to surgeries performed in Snohomish, King, Pierce, and Clark counties and 65 other metropolitan service areas throughout the country. Unlike the state’s approach, the Medicare bundle includes only the services beginning with the admission and extending through rehabilitation (for 90 days post-acute).  As a tool for hospitals, WSHA, through its relationship with DataGen, is offering hospitals a Medicare analysis package that allows hospitals to:

  • identify episodes completed and in-process for financial reporting;
  • analyze variances and trends across time and compared to targets;
  • identify cost drivers (readmissions, post-acute services, and others) that create differences in episode costs;
  • drill down into all applicable data elements included in the data;
  • review data in multiple formats (dashboards, tables, and graphs); and
  • audit/validate Centers for Medicare and Medicaid Services (CMS) data feeds.

On April 5th from 10:00 – 11:00 a.m., WSHA will be hosting a webinar to discuss the quality metrics in the Comprehensive Joint Replacement Program. You should have received your hospital specific report this week. We will also review the report offerings from DataGen.
Go to

  • Call-in toll-free number (US/Canada): 1-877-668-4490
  • Session number: 808 262 942
  • Session password: wsha
  • Follow WebEx instructions

If you would like additional information on the DataGen service, contact Jonathan Bennett at  (Claudia Sanders,


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