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.
Today Medtronic said its new Orthopedic Solutions business, launching with a total knee arthroplasty solution, aims to help surgeons through the CJR process from pre-surgical planning through the 90-day post-discharge period. The knee offering debuted this week at the annual meeting of the American Assn. of Knee & Hip Surgeons; the Fridley, Minn.-based company said it expects the knee offering to be “widely available” in the 1st half of next year.
“Medtronic is here to help speed the adoption of value-based healthcare in orthopedics by helping hospitals drive down costs while keeping outcomes top of mind,” restorative therapies president Geoff Martha said in prepared remarks. “Our technological and operational efficiency know-how – along with our insight into the various points along the care continuum – helps us develop effective solutions, tailored to client needs. And we back this up by sharing potential savings with our customer, which means we get paid if our program is successful in reducing episode costs for customers. This is about more than just offering implants or individual technologies and services; it’s about partnering with all stakeholders throughout the entire episode of care to enable patient-centered care at the best value.”
“Quality, lower-cost implants are a very attractive option as we seek to improve patient’s lives while also providing value-driven healthcare,” added Dr. Richard Scott, emeritus professor of orthopedic surgery at Harvard Medical School, a co-designer of Medtronic’s knee system. “We designed Medtronic’s total knee arthroplasty system to be simple, versatile and intuitive without unnecessary complexity and inventory. The goal is to benefit everyone – 1st and foremost the patients, but also the surgeons, hospitals and payers who are providing their care.”
