Medtronic (NYSE:MDT) said today that it’s getting into the large joint replacement business, aiming to capitalize on a new bundled payment program at the Centers for Medicare & Medicaid Services.
The government insurer announced its 5-year “Comprehensive Care for Joint Replacement” program in July 2015, saying it would involve more than 800 hospitals in 75 geographic areas. The CJR program, which went into effect in January, bundles payments for hip and knee replacements from hospital admission to 90 days after discharge. The payment covers “all related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries,” CMS said at the time.
Reimbursement is also pegged to outcomes and cost, giving Medicare the ability to claw back payments or reward good performance with addition payments; the CJR program aims to save about $150 million over 5 years.