The Centers for Medicare & Medicaid Services (CMS) last week put forth a proposed rule that calls for paying a bundled payment to hospitals that perform hip and knee replacement surgeries. The bundled payment would cover the entire episode, beginning with the surgical procedure, hospital stay, and all related subsequent care (including both Medicare Parts A and B) for 90-days post-discharge. The proposed rule represents a significant change from the current fee-for-service model:

“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,” said Health and Human Services Secretary Sylvia Burwell.

If implemented, the new rule would go into place July 1, 2016, and affect roughly 800,000 hospitals in 75 geographic areas in the country as part of a five-year test. Approximately 25% of the annual 400,000 hip and joint surgeries would be covered by the proposed payment change.

The healthcare community may submit comments to CMS until September 8.

Read the entire proposal from CMS.