Early Effects of Medicare's Bundled Payment for Care Improvement Program for Lumbar Fusion

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Study Design.

Retrospective analysis of Medicare claims linked to hospital participation in the Center for Medicare and Medicaid Innovation's episode-based Bundled Payment for Care Improvement (BPCI) program for lumbar fusion.


To describe the early effects of BPCI participation for lumbar fusion on 90-day reimbursement, procedure volume, reoperation, and readmission.

Summary of Background Data.

Initiated on January 1, 2013, BPCI's voluntary bundle payment program provides a predetermined payment for services related to a Diagnosis-Related Group-defined “triggering event” over a defined time period. As an alternative to fee-for-service, these reforms shift the financial risk of care on to hospitals.


We identified fee-for-service beneficiaries over age 65 undergoing a lumbar fusion in 2012 or 2013, corresponding to the years before and after BPCI initiation. Hospitals were grouped based on program participation status as nonparticipants, preparatory, or risk-bearing. Generalized estimating equation models adjusting for patient age, sex, race, comorbidity, and hospital size were used to compare changes in episode costs, procedure volume, and safety indicators based on hospital BPCI participation.


We included 89,605 beneficiaries undergoing lumbar fusion, including 36% seen by a preparatory hospital and 7% from a risk-bearing hospital. The mean age of the cohort was 73.4 years, with 59% women, 92% White, and 22% with a Charlson Comorbidity Index of 2 or more. Participant hospitals had greater procedure volume, bed size, and total discharges. Relative to nonparticipants, risk-bearing hospitals had a slightly increased fusion procedure volume from 2012 to 2013 (3.4% increase vs. 1.6% decrease, P = 0.119), did not reduce 90-day episode of care costs (0.4% decrease vs. 2.9% decrease, P = 0.044), increased 90-day readmission rate (+2.7% vs. −10.7%, P = 0.043), and increased repeat surgery rates (+30.6% vs. +7.1% points, P = 0.043).


These early, unintended trends suggest an imperative for continued monitoring of BPCI in lumbar fusion.


Level of Evidence: 3

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