Starting Friday, sweeping changes in Medicare payments could affect nearly 800 U.S. hospitals’ bottom lines, but not everyone is ready for the switch.
The new rules will hold hospitals accountable for all the costs of hip and knee replacements for 90 days. If patients recover and go home quickly, hospitals could reap savings. If patients have complications or need lengthy stays in a rehab facility, hospitals could owe Medicare instead.
The so-called bundled-payment initiative is the first mandatory program under the Obama administration’s plan to shift at least 50% of Medicare spending to alternative-payment models by 2018.