Dissertations and Theses

Date of Degree


Document Type


Degree Name

Doctor of Philosophy (Ph.D.)


Health Policy and Management


Alexis Pozen

Committee Members

Elizabeth Eastwood

William Gallo

Subject Categories

Health Economics | Health Policy | Health Services Administration | Health Services Research | Public Health


Episode Based Payment Models, Healthcare Reimbursement, Value Based Payment


Episode Based Payment Models and the Hospital Safety-net: An Evaluation of the Center for Medicare and Medicaid Services’ Comprehensive Joint Replacement Bundled Payment Program

By John Anthony Gravina

Advisor: Alexis Pozen, Ph.D.

Introduction: Payments for Healthcare services are increasingly being tied to clinical quality, patient experience, health outcomes, and efficiency through value-based payment arrangements (VBP). VBP presents a potential opportunity to reduce healthcare expenditures by requiring providers to take on financial risk associated with the cost and quality of care, therefore aligning payment incentives with the goals of providing higher quality and efficient care. As of 2020, 80 percent of Medicare payments had some link to value. As the shift from paying for volume of services to paying for value has progressed, focus has shifted to payment models, including episode-based payment models, that not only tie payment to clinical quality and patient outcomes but do so while encouraging efficiency and provider integration across multiple providers along the continuum of care. Episode-based payment models have demonstrated the ability to reduce Medicare payments to providers without harming measures of healthcare quality, but there is concern that these models may disadvantage safety-net providers and the vulnerable patients that they serve. The following study examines the impact of a mandatory Medicare episode-based payment program, the Comprehensive Care for Joint Replacement (CJR) program, on average price-standardized episode payments, and whether that impact is different for safety-net providers.

Methods: Medicare claims data from the Limited Data Set (LDS) standard analytical files (SAFs) from 2011-2018 were used to construct longitudinal episodes of care for lower extremity joint replacement patients beginning with discharge for LEJR and extending 90 days post-discharge. A difference in differences (DID) approach was used to estimate whether the change in price-standardized payments for applicable services post implementation of the CJR program in episodes originating at participating facilities was significantly different in comparison to those originating at non-participating facilities. Two-part logistic-linear DID models were used to estimate the change in payments separately for each category of services. Analyses were then stratified by the safety-net burden of the anchor hospital, measured using the percent of total inpatient days for Medicaid patients, the percent of Medicare inpatient days for patients receiving supplemental security income, and the disproportionate share hospital patient percentage. Analyses controlled for patient characteristics, characteristics of the hospital providing the LEJR, along with MSA and Hospital level fixed effects.

Results: Average price standardized episode spending decreased 3.5% (p

Conclusion: These finding provide further evidence in support of episode-based payment models as an effective method to generate reduced payments to providers of LEJR services. This evidence comes at a crucial time, as Medicare, along with its advisors, the Medicare Payment Advisory Commission, are currently engaged in planning the future of episode-based payment models within the Medicare program. Importantly, safety-net burden was not found to impact the ability to generate payment reductions in an episode-based payment model. The findings presented related to the ability of safety-net providers to generate payment reductions are also timely and provide needed evidence at a time in which Medicare, Medicare Payment Advisory Commission and The Innovation Center plan for the future of alternative payment models in the Medicare program.



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