How do insurance companies reimburse hospitals for hip and knee replacement surgery?

Insurance companies typically reimburse hospitals for hip and knee replacement surgeries through a bundled payment model or a fee-for-service structure. In a bundled payment model, a single payment covers all services related to the procedure, including pre-operative assessments, the surgery itself, and post-operative care. Alternatively, in a fee-for-service model, hospitals receive separate payments for each service provided, based on negotiated rates. Reimbursement amounts are influenced by factors such as the complexity of the surgery, the hospital's location, and the specific insurance policy terms.