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.”
Guest Post: Get Ready for Medicare’s CJR Model
OrthoBuzz occasionally receives posts from guest bloggers. This “guest post” comes from Richard S. Yoon, MD and Alexander McLawhorn, MD, MBA.
Starting on April 1, 2016, Medicare will implement its Comprehensive Care for Joint Replacement (CJR) model in about 800 hospitals in 67 metropolitan areas around the United States. Finalized in November 2015, the CJR initiative is intended to enhance value for patients undergoing lower extremity joint replacement (LEJR) by motivating institutions to achieve quality improvement via cost control. (For a complete discussion of “value” in orthopaedics, see “Measuring Value in Orthopaedic Surgery” in JBJS Reviews.)
Medicare hopes CJR will promote standardized, coordinated care that takes each LEJR patient seamlessly through an “episode of care” that maximizes outcomes at a reduced cost. Episodes are triggered by hospital admission and are limited to admissions resulting in a discharge paid under MS-DRG 469 or 470. For CJR purposes, episodes last for 90 days following discharge.
Initially, episode target prices will be based on historical hospital-specific reimbursements, but over time, the target prices will increasingly reflect regional averages. If a hospital’s average LEJR episode cost is below the target price, it can receive a “bonus” from CMS. If its average cost is above the target price, it will owe CMS the difference. CMS has designed a gradual rollout plan to mitigate downside risk in the first year and provide current and future participants adequate time to implement evidence-based, cost-effective care and other quality programs in their institutions.
Richard Iorio, MD, chief of adult reconstruction at NYU-Langone Medical Center’s Department of Orthopaedic Surgery, says, “There will be definite winners and losers in CJR. Once geographic pricing becomes the dominant metric for target prices, there will be intense price competition in geographic areas and potential access problems for high risk patients.” At the moment, CJR stratifies risk based only on MS-DRG code and whether a patient has a hip fracture. Unless a more robust risk stratification method is implemented, “cherry-picking” patients may become a significant issue. (See related OrthoBuzz post “Tool for Pre-TJA Risk Stratification.”)
If you are an orthopaedic surgeon who performs LEJR, ask your department head or health system about CJR, because strategies that minimize cost and maximize quality may vary from hospital to hospital. Alignment of hospitals and surgeons is probably the most critical success factor with CJR. To that end, gainsharing— a key component of well-functioning hospital-surgeon partnerships within any bundled-payment environment —for individual orthopaedic surgeons is specifically allowed within the CJR final rule.
Click here for more information, including FAQs and a list of participating areas.
Richard S Yoon, MD is executive chief resident at the NYU Hospital for Joint Diseases.
Alexander McLawhorn, MD, MBA is an arthroplasty fellow at the Hospital for Special Surgery.
CMS Offers ICD-10 “Cheat Sheets”
In less than a week from this posting, on October 1, 2015, ICD-10 diagnosis codes will debut. OrthoBuzz already reported on the 12-month leniency policy announced by the Centers for Medicare and Medicaid Services (CMS). In addition, during the home-stretch to the ICD-10 launch, CMS has published an online series of “cheat sheets” to help providers select at least the first few correct digits for the new codes. The guidance is primarily for family practitioners, but there are sections for back and neck pain and joint and limb pain that orthopaedists might find useful.
Keep in mind that private insurers are not obliged to follow CMS’s leniency lead in this area, although according to a Medscape.com article, Aetna, Humana, and Anthem have announced that they will. UnitedHealthcare is reportedly still mulling the issue, and Medicaid policies regarding how precise ICD-10 codes need to be will vary from state to state.
After October 1, please share your early ICD-10 experiences with OrthoBuzz by clicking on the “leave a comment” button in the box next to the title of this post. And good luck!
CMS to Ease ICD-10 Rules for First 12 Months
The Centers for Medicare and Medicaid Services (CMS) announced this week that it will not deny claims from providers during the first 12 months of ICD-10 implementation based on a lack of code specificity, “as long as the physician/practitioner use[s] a valid code from the right family.” Similarly, CMS will not penalize physicians whose coding lacks ICD-10 specificity when reporting to the Physician Quality Reporting System, Meaningful Use, or Value Based Modifier programs, as long as the submitted code comes from the “correct family.”
In making this joint announcement with the AMA, CMS also said it will establish a “communication and collaboration center,” which will house an ombudsman “to help receive and triage physician and provider issues.” As “ICD-Day” (October 1, 2015) looms, CMS is encouraging small-practice providers to avail themselves of the readiness tools at the “Road to 10” website, which includes a separate section for orthopaedists.
Two New Legislative Approaches to ICD-10
With the clock ticking toward an October 1, 2015 compliance deadline for ICD-10, Tennessee Rep. Diane Black recently introduced a bill, HR 2247, that would require a transition period for the changeover from ICD-9 codes. Rep. Black’s bill would not stall the October 1 compliance date, but it would require the U.S. Department of Health and Human Services (HHS) to provide transparent end-to-end testing of the new system to certify that it’s fully functional. According to the legislation, during the testing period and for 18 months following HHS certification, the Centers for Medicare and Medicaid Services (CMS) would be prohibited from denying claims “due solely to the use of an unspecified or inaccurate code.” Essentially, that means CMS would have to accept, process, and pay claims that are submitted with either ICD-9 or ICD-10 codes.
Two weeks prior to the filing of Rep. Black’s legislation, Texas Rep. Ted Poe introduced HR 2126, which would simply prohibit HHS from replacing ICD-9 until the Comptroller General completes a study “to identify steps that can be taken to mitigate the disruption on health care providers resulting from a replacement of ICD-9.” Both pieces of legislation have been referred to the House Committee on Energy and Commerce and the House Committee on Ways and Means.
SGR, RIP
On April 14, 2015 the Senate voted 92-to-8 to approve legislation previously passed by the House that puts an end to the SGR-based physician payment formula for Medicare services. At posting time, President Obama said he would sign the bill. The Senate-passed measure is identical to the bill approved by the House; all amendments introduced in the Senate were defeated.
After the vote, many medical societies, including the AMA and AAOS, heaped praise on Congress. In a rare moment of brevity from Capitol Hill, Michigan Rep. Fred Upton told Kaiser Health News (KHN), “Stick a fork in it. It’s finally done.”
But according to KHN, “while the law lays out a structure on how to move to new [Medicare] payment models, much of their development will be left to future administrations and federal regulators.” And an even colder rain on the parade came in a report from Paul Spitalnic, the head actuary at the Centers for Medicare and Medicaid Services (CMS). Spitalnic’s report soberly observes that the legislation about to be signed into law “raises important long-range concerns that would almost certainly need to be addressed by future legislation.” While the bill specifies physician payment-update amounts for all future years, the CMS report says that “the specified rate updates would be inadequate in years when levels of inflation are higher or when the cumulative effect of price updates not keeping up with physician costs becomes too large.”
So while orthopaedists in the twilight of their active-practice careers may be able to “stick a fork in it,” younger surgeons may be distracted by debates about physician Medicare payments that are apt to crop up again.
ICD 10 Implementation – Are you the 80%
Oct. 1, 2014 is the deadline for ICD-10 conversion. However, according to a survey from the Workgroup for electronic data interchange, 8 out of 10 practices have not begun testing and only half have begun the initial steps of impact assessment. Some attribute these delays to their IT vendors not being ready; 40% of vendors said their products won’t be ready before 2014. There has been discussion about The Centers for Medicare and Medicaid Services (CMS) possibly delaying the deadline again or an “enforcement-free” period of 6 months, but CMS has resisted that idea.
On a more positive ICD-10 note, Sutter Health of California is planning on going live this May, a result of its 3-year planning efforts. The May launch will give Sutter doctors a five-month test period before the deadline. Danielle Reno, Sutter’s ICD-10 program director said, “We won’t be submitting claims to payers in ICD-10, but we will turn it on, and physicians will be able to use it.” Another company testing its ICD-10 plans is North Carolina Healthcare Information & Communications Alliance (NCHICA). Holt Anderson, executive director at NCHICA, ran a test pilot with some of the best coders, and there were still significant concerns about accuracy. Using “dual coders” who coded in both ICD-9 and ICD-10, only 55% of the transition scenarios were accurate in the first wave of testing.
5 Tips to Transition from Stage 1 Meaningful Use to Stage 2
The Centers for Medicare and Medicaid Services has proposed extending the attestation period for Stage 2 of Meaningful Use of electronic health records (EHR) through 2016. The extension would give providers more time to meet the requirements, still be eligible for 2014 incentives, and start thinking about Stage 3 requirements. For providers embarking on the transition from Stage 1 to Stage 2, Michael Nunimow, CEO and cofounder of drchrono, offers five tips.
Sunshine Act – The Continued Debate
On Oct. 28, the American Association of Orthopaedic Surgeons joined other national and state physician organizations in signing a letter to Health and Human Services Secretary Kathleen Sebelius expressing “serious concerns” about a key part of the Physician Payments Sunshine Act. The more than 70 physician-organization signatories argued that medical textbooks, reprints of peer-reviewed scientific journal articles, and abstracts should be excluded from the restrictions because these items directly benefit patients, although they may not be intended for direct use by patients. The Oct. 28 letter, which was spearheaded by the AMA and the Massachusetts Medical Society, says that the decision by the Centers for Medicare & Medicaid Services to not include these educational materials as exclusions in the regulation is “contrary to both the statute and congressional intent and will potentially harm patient care by impeding ongoing efforts to improve the quality of care through timely medical education.” The letter goes on to say that these items are “essential tools” that doctors use to stay informed of the latest developments. The letter further states that including these items in the Sunshine Act reduces the focus on quality patient care.
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