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What Are the Economic Consequences of Unplanned Readmissions After TKA?

  • Clinical Research
  • Published:
Clinical Orthopaedics and Related Research®

Abstract

Background

In 2009, the Center for Medicare & Medicaid Services (CMS) began penalizing hospitals with high rates of 30-day readmissions after hospitalizations for certain conditions. This policy will expand to include TKA in 2015.

Questions/purposes

What are the median profits and contribution margins of: (1) Medicare-reimbursed TKA, (2) 30-day TKA readmission, and (3) entire episode of care for readmitted TKA patients within 30 days compared to nonreadmitted patients? (4) Under new CMS guidelines, what financial penalty will the authors’ institution face if its arthroplasty readmission rate exceeds the national average?

Methods

A retrospective review of 3218 primary TKAs performed during 2 years at a large urban academic hospital network was conducted using administrative and financial data.

Results

The median profit and contribution margins, respectively, were as follows: TKA episode, USD 5209 and USD 11,726; 30-day readmission, USD 608 and USD 3814; TKA visit with readmission, USD 2855 and USD 13,901; TKA visit without readmission, USD 5300 and USD 11,652. Readmission penalties could reach USD 6.21 million per year for the authors’ institution.

Discussion

If our results are generalizable, unplanned TKA readmissions lead to diminished total profit. Although associated with a positive contribution margin, this is likely to be a short-term phenomenon as the new CMS policy will result in readmissions coming at a steep cost to referral centers.

Level of Evidence

Level IV, economic and decision analyses. See Instructions for Authors for a complete description of levels of evidence.

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Acknowledgments

The authors thank Theresa Larivee, the Office of Financial Operations and Budget at the University of Pennsylvania Health System, and the staff at the Penn Data Store.

Author information

Authors and Affiliations

  1. University of North Carolina School of Medicine, Chapel Hill, NC, USA

    R. Carter Clement MD, MBA

  2. Perelman School of Medicine at the University of Pennsylvania, Stemmler Hall, Suite 100, 3450 Hamilton Walk, Philadelphia, PA, 19104, USA

    Michael M. Kheir BS

  3. Hospital for Special Surgery, New York, NY, USA

    Peter B. Derman MD, MBA

  4. Department of Anesthesiology & Critical Care, University of Pennsylvania Health System, Philadelphia, PA, USA

    David N. Flynn MD, MBA, Rebecca M. Speck PhD & Lee A. Fleisher MD

  5. Hospital of the University of Pennsylvania, Philadelphia, PA, USA

    L. Scott Levin MD, FACS

Authors
  1. R. Carter Clement MD, MBA
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  2. Michael M. Kheir BS
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  3. Peter B. Derman MD, MBA
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  4. David N. Flynn MD, MBA
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  5. Rebecca M. Speck PhD
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  6. L. Scott Levin MD, FACS
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  7. Lee A. Fleisher MD
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Corresponding author

Correspondence to Michael M. Kheir BS.

Additional information

Each author certifies that he or she, or a member of his or her immediate family, has no funding or commercial associations (eg, consultancies, stock ownership, equity interest, patent/licensing arrangements, etc) that might pose a conflict of interest in connection with the submitted article.

All ICMJE Conflict of Interest Forms for authors and Clinical Orthopaedics and Related Research ® editors and board members are on file with the publication and can be viewed on request.

Each author certifies that his or her institution approved the human protocol for this investigation that all investigations were conducted in conformity with ethical principles of research, and that informed consent for participation in the study was obtained.

The work was performed at the Hospital of the University of Pennsylvania, Philadelphia, PA, USA.

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Clement, R.C., Kheir, M.M., Derman, P.B. et al. What Are the Economic Consequences of Unplanned Readmissions After TKA?. Clin Orthop Relat Res 472, 3134–3141 (2014). https://doi.org/10.1007/s11999-014-3795-3

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