Search results for bundled payment

Bundled Payments for Hip and Knee Replacement: Working as Planned?

When Medicare’s Comprehensive Care for Joint Replacement (CJR) program was implemented in 2016, the health care community—especially orthopaedic surgeons— had 2 major concerns. First, would the program actually demonstrate the ability to decrease the costs of total joint replacements while maintaining the same, or improved, outcomes? Second, would CJR promote the unintended consequence of participating hospitals and surgeons ”cherry picking” lower-risk patients and steering clear of higher-risk (and presumably higher cost) patients?  Both of these questions were at the heart of the study by Barnett et al. in a recent issue of the New England Journal of Medicine.

The authors evaluated hip and knee replacements at 75 metropolitan centers that were mandated to participate in the CJR program and compared the costs, complication rates, and patient demographics to similar procedures at 121 control centers that did not participate in CJR. The authors found significantly greater decreases in institutional spending per joint-replacement episode in institutions participating in the CJR compared to those that did not. Most of these savings appeared to come from CJR-participating institutions sending fewer patients to post-acute care facilities after surgery. Furthermore, the authors did not find differences between centers participating in the CJR and control centers in terms of composite complication rate or the percentage of procedures that were performed on high-risk patients.

While this 2-year evaluation does not provide the level of detail necessary to make far-reaching conclusions, it does address two of the biggest concerns related to CJR implementation from a health-systems perspective. There may be individual CJR-participating centers that are not saving Medicare money or that are cherry picking lower-risk patients, but overall the program appears to be doing what it set out to do—successfully motivating participating hospitals and healthcare facilities to look critically at what they can do to decrease the costs of a joint-replacement episode while simultaneously maintaining a high level of patient care. The Trump administration shifted CJR to a partly voluntary model in March 2018, and I hope policymakers consider these findings if further changes to the CJR model are planned.

Chad A. Krueger, MD
JBJS Deputy Editor for Social Media

Bundled Payments: Patient-Specific Care Calls for Patient-Specific Reimbursements

Hip Fracture for OBuzzThe bundled-payment model has found some early success within the field of orthopaedic surgery, most notably in joint replacement (see related OrthoBuzz post), However, more robust risk-adjustment methods are needed, especially in terms of patient factors. That is the message delivered by Cairns et al. in their retrospective analysis of Medicare data from 2008 to 2012 published in the February 21, 2018 edition of JBJS. The authors make a compelling case for improved risk stratification of hip- and femur-fracture patients to ensure that all patient populations have and retain access to appropriate care.

The authors analyzed reimbursements for the surgical hospitalization and 90 days of post-discharge care among nearly 28,000 patients who met inclusion criteria for the Surgical Hip and Femur Fracture Treatment (SHFFT) model proposed by the Centers for Medicare and Medicaid Services (CMS). Their findings highlighted various inconsistencies that could have unintended consequences if not accounted for in the bundled-payment model. For example, reimbursements were $1000 to $2000 lower for patients in their 80s, who tend to have more comorbidities that require more care, than for younger patients.  CMS proposed using Diagnosis Related Groups (DRGs) and geographic location to adjust for risk in its SHFFT bundled-payment model, but Cairns et al. identify several other factors (such as patient age and gender, ASA and Charlson Comorbidity Index scores, and procedure type) that could provide a more realistic stratification of risk.

The article clearly articulates how risk adjustments that don’t include more specific patient factors could lead to a multitude of unintended consequences for patients, providers, and the entire healthcare system. These findings could remain relevant now that CMS has announced an “advanced” voluntary bundled-payment model after the Trump administration cancelled SHFFT in late 2017.

Whatever bundled-payment model takes hold, the totality of the orthopaedic literature strongly suggests that the best outcomes are derived from making specific treatment plans for each patient based on the individual characteristics of his or her case. It seems reasonable that the best bundled-payment plans would do the same.

Chad A. Krueger, MD
JBJS Deputy Editor for Social Media

Guest Post: Cautious Early Optimism about Medicare’s Bundled Payment Programs

jointOrthoBuzz occasionally receives posts from guest bloggers. This guest post comes from Richard Yoon, MD.

In a recent issue of JAMA, Dummit et al. analyzed cost and quality results from the Centers for Medicare & Medicaid Services (CMS) Bundled Payment for Care Improvement (BPCI) initiative. The authors compared joint-replacement results between hospitals that voluntarily participate in the BPCI program versus matched comparison hospitals that do not participate. Nearly 60,000 lower extremity joint replacement procedures from each hospital type were included in the analysis.

Medicare payments declined over time in both groups of hospitals, but the authors noted a greater decline in costs among the BPCI hospitals, primarily due to reduced utilization of post-institutional acute care. There were no statistical differences in quality between the BPCI hospitals and comparison hospitals, as measured by unplanned admissions, emergency department visits, and mortality at both 30 and 90 days. These results echo those reported by other pilots in the United States and suggest that similar programs could reduce cost per episode of care without compromising quality.

However, even proponents of the new programs are cautious. For example, in his JAMA editorial, Elliot Fisher, MD warns readers that because BPCI is a voluntary program, the results may not reflect the true impact of a more widespread bundled-payment model.  The incentives, he argues, could end up contributing to volume increases or shifts toward healthier—and “more profitable”—patients. As Fisher concludes, “Bundled payments leave the overarching incentive to increase volume solidly in place.”

In a separate JAMA Viewpoint article, Ibrahim et al. warn that another CMS program, the Comprehensive Care for Joint Replacement (CJR) model, could unintentionally amplify already existing racial disparities in elective joint replacement. CJR is a mandatory initiative in 67 randomly selected US metropolitan areas. The authors say that CJR might improve postoperative quality of care for minority patients after joint replacement, but that the program could also end up favoring healthier, well-insured patients.

Overall, at this early stage, these two CMS models offer promising, comprehensive approaches to joint replacement that may prove cost-saving without comprising quality of care. Results like the ones published by Dummit et al. are hopeful, but longer-term, outcomes-based, and cost-focused studies that include epidemiologic and racial impact must be performed as we move forward carefully.

Click here to read a previous OrthoBuzz post about BPCI.

Click here to read a previous OrthoBuzz post about CJR.

Richard Yoon, MD is a fellow in orthopaedic traumatology and complex adult reconstruction at Orlando Regional Medical Center.

Could Bundled Payments Work with Cervical Fusion?

ACDF_Reimbursement_VariationThe answer to that question depends largely on how much the 90-day episode of care actually costs. Virk et al., in the August 17, 2016 edition of JBJS, provide benchmark data that could help policymakers design bundled payments for cervical fusions that are economically viable for providers.

The authors analyzed the Medicare 5% National Sample Administrative Database and found that 4,506 patients in that cohort underwent a one to two-level anterior cervical discectomy and fusion (ACDF) for cervical radiculopathy from 2005 to 2012. The mean cost per patient of the procedure plus the 90-day postoperative period was $15,417. The physician reimbursement represented 20.4% of that total, with the surgeon receiving 18% of the total. Reimbursements for hospitals for inpatient care represented nearly 73% of the total reimbursement. The study did not account for reimbursements from “Medigap” plans or private payers.

The authors also analyzed data from the same database for 90-day episodes of care related to total knee arthroplasty (TKA). The mean per-patient reimbursement for TKA patients was $17,451. The authors noted significant regional variation in reimbursement for ACDF, with the lowest rates in the Northeast and Midwest and the highest rates in the West.

Among the conclusions made by Virk et al. is the following: “Although payments to physicians have been implicated in the rise of health-care costs, the data suggest that the greater opportunity for reducing expenses involves hospital-related reimbursement.”

Click here for more OrthoBuzz coverage of bundled payments in orthopaedics.

Insight into Bundled Payments for Orthopaedics

“Alternative payment models are here to stay,” according to an AOA Critical Issues article by Greenwald et al. in the June 1, 2016 issue of The Journal of Bone & Joint Surgery. The article identifies successful implementation strategies related to the Bundled Payments for Care Improvement (BPCI) initiative launched by the Centers for Medicare and Medicaid Services (CMS) in 2013.

Alternative payment models represent an opportunity to reduce costs by eliminating waste and unwarranted variation in care by finding efficiencies within the system. One way to achieve this is through gainsharing incentives that align hospitals, physicians, and post-acute care providers in the redesign of care. But participants also assume financial risk.

Orthopaedics plays a big role in the BPCI risk-reward initiative. Sixteen of the 48 clinical “episodes of care” included in BPCI are orthopaedic-related. Moreover, three episodes (major lower-extremity joint replacement, femur/hip/pelvis fractures, and “medical non-infectious orthopaedic”) account for 40% of the 16 orthopaedic episodes being evaluated.

The nuts and bolts—and risks and rewards— of the initiative are well-described in the article, but here are several pearls extracted therefrom:

“Care improvement activities and care redesign…are the necessary prerequisites before entering into bundled payment arrangements.”

“The financial risk is real [because] outliers, those patients whose cost is substantially higher than the mean patient cost, cannot be controlled.”

“It is important that the physician or surgeon responsible for the patient is involved in all stages of the episode of care and interacts with all of the parties involved.”

“Specific to orthopaedics, there are substantial opportunities for cost savings by integrating preoperative and intraoperative processes, reviewing implant purchasing options, and negotiating post-acute care costs.”

“Changes in care delivery often require … managing patient expectations.”

CMS Delays Start of Joint-Replacement Bundled Payments til April 1, 2016

The final rule from the Centers for Medicare & Medicaid Services (CMS) regulating “episode-of-care” Medicare payments to hospitals for hip and knee replacements includes a postponed start date of April 1, 2016. The originally proposed implementation date was January 1, 2016.

Approximately 800 hospitals nationwide are subject to the new payment model, which makes hospitals eligible for bonuses or penalties, depending on their quality and cost performance from the day of patient admission to 90 days post-discharge. Based on comments about the initial rule by 400 key stakeholders, CMS also agreed to eliminate penalty payments during the first year of implementation.

Because the CMS model—dubbed Comprehensive Care for Joint Replacement, or CJR—permits gainsharing, individual orthopaedic surgeons could benefit financially if hospitals they are affiliated with receive bonuses. The AAOS commended CMS for revising the methodology for calculating the composite quality score and said that the delayed implementation “adds some flexibility,” but the group is still calling for CMS to “postpose the mandatory implementation feature of the program until at least 85 percent of providers have attained meaningful use [of EHRs] or another metric of infrastructure readiness.”

Will New Payment Models Adversely Affect Medicaid Patient Access to THA?

Concerns have arisen that the implementation of value-based, alternative payment models pegged to “bundled” episodes of care and/or patient outcomes may make it harder for a subset of patients to access the care they need. Specifically, some surgeons may be apprehensive to treat patients who have substantial medical comorbidities or socioeconomic situations that increase their risk of postsurgical complications and poor outcomes, because these alternative payment models often financially penalize physicians and hospitals for the cost of suboptimal results. The study by Shau et al. in the December 5, 2018 issue of The Journal provides data that sharpens the horns of this dilemma.

The authors used the National Readmissions Database to perform a propensity-score-matched comparison between >5,300 patients with Medicaid payer status who underwent a primary total hip arthroplasty (THA) and an equal number of patients with other types of insurance who also underwent primary THA.  Shau et al. found that Medicaid-covered THA patients had significantly increased overall readmission rates (28.8% vs 21%, p <0.001, relative risk=1.37), mean length of stay (4.5 vs 3.3 days, p <0.0001), and mean total cost of care ($71,110 vs $65,309, p <0.0001), relative to the other group.  These results strongly suggest that Medicaid payer status is an independent factor associated with increased resource utilization after total hip arthroplasty.

These findings can be viewed from a couple of different perspectives. First, from a preventive standpoint, surgeons and healthcare systems providing THA for Medicaid patients may need to spend more time preoperatively optimizing these patients (both physically and psychosocially) to decrease their postoperative resource burden and increase the likelihood of a good clinical outcome. Second, these results are further proof that any fair and effective alternative payment model needs to take into consideration factors such as Medicaid payer status and patient comorbidities. If they do not, such models will actually throw access barriers in front of patients in this demographic because providers may feel that caring for them increases the likelihood of being penalized financially.

Both perspectives are valid, so Medicaid payer status is a crucial factor to consider as alternative payment programs move forward. Nowadays, controlling costs is an important goal of any healthcare delivery system, but it must not lead to unintended discrimination in patient access to care. As we create further alternative payment models and refine existing ones, we must be careful not to prioritize cost cutting ahead of equitable patient access.

Chad A. Krueger, MD
JBJS Deputy Editor for Social Media

Medicare to “Unbundle” Postoperative Care by 2018

During a well-attended symposium on bundled payment initiatives for joint replacement at the 2015 AAOS Annual Meeting, speakers shared enlightening pearls and pitfalls related to Medicare’s Bundled Payments for Care Improvement initiative. But no one mentioned the fact that by 2018, Medicare will shift the 90-day global period for joint replacement—and all other covered surgeries—to a 0-day global period.

This fact is discussed in an eye-opening Perspective by Mulcahey et al. in the April 9 New England Journal of Medicine. Noting that bundled payments in general are designed to improve care and reduce cost, the authors call this decision, which would essentially unbundle postoperative visits, “striking.” The shift to a 0-day global period for surgery is based on an HHS Inspector General audit that found that the number of postoperative encounters between surgeons and patients are actually well below the number paid for in the 90-day bundle. Total knee arthroplasty, for example, includes three inpatient, one hospital-discharge, and three outpatient surgeon visits in its 90-day package.

Mulcahey et al. contend that “removing some or all postoperative visits from global packages will reduce procedure payment rates” for surgeons, but it remains to be seen how surgeons, orthopaedic and otherwise, will respond to the policy change. OrthoBuzz will keep you posted.

A Conversation with Dr. Brian Parsley, President of AAHKS

Dr. Brian S. Parsley is President of the American Association of Hip and Knee Surgeons (AAHKS). He was kind enough to answer a few questions for OrthoBuzz.

JBJS: What have been your key goals for AAHKS during your presidency?

Dr. Parsley: AAHKS is a growing organization that has established itself as the premier organization for hip and knee arthroplasty education, advocacy, and support in the United States. Our membership has experienced continued record growth, as has our Annual Meeting. This year will focus on continuing our growth nationally, but we will also focus more on developing international membership and partnerships through educational opportunities. We are blessed with outstanding experts in arthroplasty techniques and innovation, in patient advocacy and legislative and regulatory affairs, and with expertise on how to navigate through this ever-changing healthcare arena to ensure that the patients we serve are well cared for. This requires a constant review and upgrade of our internal organizational systems to manage these priorities effectively and efficiently.

JBJS: How do you think JBJS can best address the needs of the members of AAHKS and other subspecialty organizations?

Dr. Parsley: JBJS continues to be one of the premier resources for quality educational content and serves as a foundation for identifying “Best Practices” recommendations. The expansion of JBJS into alternative methods to communicate with the orthopaedic community through forums such as this and educational webinars indicates an interest in remaining a respected resource.

JBJS: As a specialist in diagnosing and treating arthritis, are there new or emerging approaches to treatment that you see as particularly promising?

Dr. Parsley: The success of total joint arthroplasty today is outstanding, and the quality-of-life improvement this procedure provides is life changing for the vast majority of patients. We continue to focus on new techniques for joint preservation through cartilage research and exploring when early intervention to treat hip or knee abnormalities is indicated to improve function and extend joint preservation. I also see the continued emergence of bicruciate-retaining TKA to potentially provide knee replacements that have a more anatomic stabilization and function and hopefully improved outcomes. Continued refinement of the mechanical functions of the joint implants for both the hip and knee are ongoing; this includes further improvements of the polyethylene articulation, improvements in trunion design for modular hip designs, and improvements in implant geometry that will hopefully extend the life of implants even further.

JBJS: What trends in orthopaedics generally are you most intrigued by?

Dr. Parsley: The delivery of orthopaedic care is undergoing major changes as the fee-for-service model is being challenged and value propositions introduced. This is the most disruptive change in orthopaedics today. The associated changes in the physician practice from the private-sector model to a significant rise in physician employment will potentially have an impact on the patient-physician relationship and our role as patient advocate, and this is a cause for concern. Physicians need to get engaged and lead the way during this time of change.

JBJS: Looking ahead to the next 20 years or so, what do you think might be three significant advances or changes in orthopaedics?

Dr. Parsley: As I mentioned above, the changes in healthcare delivery will be the most significant, but at the same time they will provide opportunities for improvement in the value of the services we provide. Extensive work is being done in the field of orthobiologics and the potential benefits of stem cell research. This field may help us prevent or delay the devastating effects of arthritis. Lastly, the emphasis today on evidence-based medicine will help us refine the care that we provide and decrease the variability of outcomes going forward. This is in the best interest of our patients.

JBJS: What changes do you expect to come as a result of the Affordable Care Act (ACA)?

Dr. Parsley: Continuing on the current path is unsustainable. The passage of the Affordable Care Act has changed the face of medicine and will pose many challenges in the years ahead. The fact is that this is the new law of the land, and the sooner we accept that fact and move forward the better. Still, there is no question the ACA can be modified and improved upon. There are tremendous opportunities for orthopaedics to refocus and take the lead on the management of musculoskeletal care for our patients, and not just as a surgical event within an episode of care. We have not only the surgical skill sets, but we also have the ability to manage the entire episode of care–and we should. There is no one who knows and understands the needs of the patient with an orthopaedic problem better than we do and what care the patient needs. I am very concerned that patients will suffer if the orthopaedic surgeon does not step up and take the lead in this changing healthcare delivery system. We need to maintain the patient–physician relationship and continue to be the patient’s advocate. The most successful early programs since passage of the ACA have all been physician-driven.

In the field of arthroplasty, the evolution of bundled payments is coming and in my opinion, bundled payments will soon be the rule rather than the exception. There is great potential to provide excellent care to patients more effectively and efficiently at a lower cost, resulting in higher value to the patient and the healthcare system. But that requires the physician to be actively engaged in the process.

JBJS: You have participated in several service-oriented activities, including the Houston Haitian Recovery Initiative. How has participating in these activities enriched your medical practice?

Dr. Parsley: I have always felt that the Good Lord gives us all gifts; it is what you do with those gifts that makes a difference. I am blessed to be an orthopaedic surgeon, and I feel that I am doing what was meant to be. Sharing these gifts with others by serving those in need through medical mission work in Guatemala, Haiti, Ecuador, or even in Houston–whether it be with surgical skills, with leadership and volunteer recruitment, or with philanthropy–is life-changing for all involved. I have made more than 45 medical mission trips in the past 18 years, the majority to Guatemala with Faith In Practice. The first of 4 trips I made to Haiti was 6 days following the devastating earthquake several years ago. I am humbled by the patients we treat and the faith that they show in a total stranger such as me. These missions reinvigorate my soul and reinforce the reasons that I went into medicine in the first place. The sanctity of the patient-physician relationship is communicated through the touch of the hand, the smile on their faces, the hugs of gratitude, and the incredible faith they share with you. Everyone should give back in some way as part of this wonderful profession.

JBJS: What is your favorite thing about your profession?

Dr. Parsley: I am truly blessed to be an orthopaedic surgeon and am surrounded by highly motivated and talented people with a can-do attitude and a focus on quality care. The camaraderie, respect, and friendships that develop in the orthopaedic family as we continue to strive to be the best we can be on behalf of the patients we serve is always a motivation and a pleasure.

Good Outcomes and Savings with Preferred-Vendor Program

It has been said that outcomes of total joint arthroplasty are 90% related to surgeon factors (such as prosthetic alignment and fit and soft-tissue management), and only 10% to the implant itself. Historically, surgeon choices of implants for primary total hip and total knee arthroplasty have been based on influences such as the prostheses used during training, prior vendor relationships, specific patient characteristics, and findings in published literature. Absent evidence that the selection of prosthesis vendor affects patient outcomes to any significant degree, and with the universal focus on lowering health care costs, surgeon implant/vendor preferences have come under close scrutiny.

In the August 7, 2019 issue of The Journal, Boylan et al. study the impact of a voluntary preferred single-vendor program at a large, high-volume, urban orthopaedic hospital with >40 (mostly hospital-employed) arthroplasty surgeons. The hospital’s use of hip and knee arthroplasty implants from the preferred vendor rose from 50% to 69% during the program’s first year. In addition, the mean cost per case of cases in which implants from the preferred vendor were used were 23% lower than the mean cost-per-case numbers from the previous year (p<0.001). Boylan et al. noted that low-volume surgeons adopted the initiative at a higher rate than high-volume surgeons, and that surgeons were more compliant with using the preferred vendor for total knee implants than for total hip implants.

Why is it that some higher-volume surgeons seem resistant to change? It is not clear from the data presented in this study whether the answer is familiarity with an instrument system, loyalty to local representatives, or relationships with manufacturers based on financial or personal connections. The authors observed that “collaboration between surgeons and administrators” was a critical success factor in their program, and interestingly, the 3 highest-volume surgeons in this study (who performed an average of ≥20 qualifying cases per month) all used total knee implants from the preferred vendor prior to the initiation of this program.

The provocative findings from this and similar studies lead to many questions ripe for further research. Because hospitals are highly motivated to reduce implant costs in the bundled-payment environment, preferred-vendor programs are gathering steam. We need to better understand how they work (or don’t) for specific surgeons, within surgical departments, and within hospital/insurance systems in order to evaluate their effects on patient outcomes and maximize any cost benefits.

Marc Swiontkowski, MD
JBJS Editor-in-Chief