Medical device manufacturers will feel the heat with the Comprehensive Care for Joint Replacement program implementation, based on a S&P Global Ratings report, according to Fierce Medical Devices.
Here are seven things to know:
1. CJR will apply to 789 metropolitan hospitals, which will start facing financial penalties in 2017.
2. CMS anticipates it will save approximately $343 million over the five-year CJR program.
3. Medical device companies may absorb these costs, however.
4. To save costs, hospitals may opt for lower-priced devices. In turn, this will increase price-based competition among manufacturers.
5. The report notes Zimmer Biomet and Tecomet may see great hospital revenue pushback due to CJR implementation. Both companies receive more than 60 percent of revenues from hip and knee devices.
6. CJR implementation may also impact Stryker, Johnson & Johnson and DJO Global sales.
7. Hospitals may also stray away from high-risk patient procedures, and only perform procedures for those patients who will likely benefit. This will result in fewer procedures, and thus fewer implant sales.