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Medicare proposes payment changes to hospitals for hip, knee replacement

Federal health officials are proposing a major change in the way Medicare pays for hip and knee replacements, requiring hospitals to partly repay the government if patients get avoidable infections and other complications but rewarding them with extra payments if patients do well (Source: “Medicare proposes payment changes to hospitals for hip, knee replacement,” Washington Post, July 9, 2015).

The proposal announced Thursday by the Centers for Medicare and Medicaid Services is part of the Obama administration’s efforts to overhaul the health care system, in part by using the payment system to reward quality of care rather than volume of services. Under the current system, doctors and hospitals typically get paid set fees for every procedure they perform, regardless of how patients fare.

The new payment method would be used in 75 areas across the country, including several in Ohio, affecting 800 hospitals and an estimated 100,000 patients a year. Officials hope to save $150 million over the five-year demonstration period (Source: “CMS proposes major initiative for hip and knee replacements,” U.S. Department of Health and Human Services, July 9, 2015).