The Obama administration hopes it found a drastically different way to pay for all those hip and knee surgeries covered by Medicare.
The White House announced Thursday a proposed payment model for hospitals based on the quality of care for patients, even calling on hospitals to pay back Medicare if there are post-surgery complications.
Hip and knee replacements are among the most common surgeries for Medicare beneficiaries, costing the program $7 billion in 2013, according to the Centers for Medicare and Medicaid Services.
The proposal wouldn't affect doctors in 75 geographic areas, as they will be paid under the existing system, but it would result in changes for hospitals that perform hip or knee replacements. CMS did not elaborate on the specific areas affected.
Instead of a straight fee-for-service under the current model, a hospital will be paid based on the patient outcome. For instance, a hospital would be held accountable for the quality and costs of care from the time of surgery to 90 days after discharge, the agency said.
The goal is to create a more consistent level of care, CMS said.
"For instance, the rate of complications like infections or implant failures after surgery can be more than three times higher at some facilities than others, increasing the chances that the patient may be re-admitted to the hospital," the agency said.
Under the payment model, hospitals would have an incentive to work with physicians, home health agencies and nursing facilities to help reduce re-hospitalizations, CMS said.
Obamacare called on Medicare and Medicaid payments to be more tailored to the quality of care delivered rather than just a flat fee for service.