Association Between Hospital Voluntary Participation, Mandatory Participation, or Nonparticipation in Bundled Payments and Medicare Episodic Spending for Hip and Knee Replacements

Medicare has used both voluntary and mandatory participation to engage health care organizations in value-based payment models. Compared with mandatory participants, voluntary participants are assumed to achieve greater savings because they self-select into programs due to greater opportunity to reduce spending. However, no empirical data exist comparing savings under mandatory vs voluntary programs.

In 2013, Medicare started the voluntary Bundled Payments for Care Improvement (BPCI) program, which included hip and knee joint replacements. In 2016, under the Comprehensive Care for Joint Replacement (CJR) program, Medicare randomized hospitals in 75 metropolitan statistical areas to receive mandatory hip and knee joint replacement bundled payments, whereas hospitals in 121 metropolitan statistical areas continued receiving fee-for-service payments. This created an opportunity to examine the association between voluntary vs mandatory hospital participation in a bundled payment program for joint replacements and episodic spending changes.^1–3