The Centers for Medicare & Medicaid Services’ “monumental” plan to test bundled payments for hip and knee replacements could spell trouble for skilled nursing facilities, experts warn.

The proposed bundle would begin with hospital admission and last 90 days after discharge.

All financial risk for the surgery, inpatient stay and care following discharge would be placed on hospitals, an update that experts say could weed out 1- and 2-star skilled nursing facilities from “favored” referral lists. Experts also predict the new emphasis on hospital accountability could cause 25% of low-star SNFs to close over the next five years.

The proposed five-year test is the first mandatory bundled payment model for hospitals, and will span over 75 geographic areas including larger markets like Los Angeles and New York. 

“Once you get to bundled payment, it really does prompt skill set and competencies that are different from what providers have been accustomed to,” Avalere Vice President Brian Fuller told McKnight’s.