TEAM EFFORT Bundled payments force facilities to create a clinically driven episode of care that minimizes risk and maximizes efficiencies.

What's not to like about bundled payments? They save the healthcare system money (our orthopedic practice has reduced the cost of some joint replacement cases by 30%), improve patient care and put you in the driver's seat during negotiations with commercial payers. Capitalizing on bundled payments now will put you ahead of the game when it comes to preparing for what's shaping up to be the future of orthopedic reimbursements.

Understanding the options
Joint replacement cases are blazing the trail for the evolving reimbursement model, mostly because surgeons are able to generate reproducible, high-quality outcomes that allow for the development of a predictable clinical pathway that improves outcomes and reduces overall healthcare costs. Bundled payments provide a fixed-price payment for an entire episode of care, which begins when cases are scheduled and ends 90 days after surgery. Every aspect of patient care is covered in the lump sum, from pre-op testing to post-op rehab. Two main types of bundled payments models have let us enhance patient care and limit our spending:

Prospective bundles involve coming to an agreement with payers — a private corporation or commercial insurer — on a set rate for a joint replacement. That means you receive the same lump sum for every procedure performed. Negotiating a fair bundle with payers demands knowing exactly how much is spent on every detail of patient care. That demands a deep dive into the true costs of caring for patients and you must get all ancillary services that touch the patient along the clinical pathway — anesthesia, radiology and physical therapy, for example — to agree to a flat per-patient fee they'll receive in the bundle.

Everyone involved in the ancillary services that care for patients has to determine their true cost of care, but must also figure out ways to become more efficient and must work harder for patients than they have in the past. It's a significant challenge that demands a change in mindset and time to implement.

Retrospective bundles are based on the normal fee-for-service billing model with insurers. When the episode of care is completed, a process is in place to measure quality care metrics — no complications, readmissions or infections occur, for example — and determine the true cost of care, which is compared to a targeted amount based on past performance. Everyone who touches the patient along the continuum of care must have a shared vision of providing excellent care and reducing costs. If they do, quality metrics will be met and costs will be reduced. When that happens, you're eligible for a portion of the shared savings from the payer.

You're guaranteed to get paid under the retrospective model, but might miss out on the extra bump in reimbursement if you fail to provide quality care or control your case costs. The prospective bundle, however, puts you at risk because if the cost of the 90-day episode exceeds the contracted bundled amount for whatever reason, you'll make nothing — or even lose money — on the case. The additional cost of a hospital stay to treat a patient's post-op infection? That's on you.

You'll find that having that skin in the game will make you focus even more on providing excellent patient care. Sure, there are high financial stakes tied to working with prospective bundles, but you're also in complete control of the episode of care. If you manage costs and improve clinical efficiencies, you'll maximize profits.

REIMBURSEMENT UPDATE
Will CMS Pay for Same-Day Joints in 2018?

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Last month, CMS released its 2018 proposed payment rule for ASCs and HOPDs. CMS currently doesn't reimburse for total joint replacement in ASCs, but is proposing to remove total knee arthroplasty from the inpatient-only (IPO) list and include it on the ASC-payable list. CMS is also requesting comments on whether partial and total hip arthroplasties should also be removed from the IPO list. Is 2018 the year you'll be able to perform total joint procedures on Medicare patients in the ASC setting?

David Uba, MBA, the CEO of Excelsior Orthopaedics in Amherst, N.Y., believes it will happen. "I'm hopeful that public comments will demonstrate to CMS that outpatient total joints can be done in the Medicare patient population safely and effectively, just as surgeons have done in the commercial patient population for years," he says.

Mr. Uba thinks adding total joints to CMS's ASC payment list would increase demand for outpatient joint replacement and provide additional revenue for his practice and its ASC. "We turn Medicare patients away almost every day," he adds. "Many of these patients would otherwise meet our patient selection criteria."

Commercial payers have previously been reluctant to allow for outpatient joint replacement, because they've followed CMS guidelines, according to Mr. Uba. He believes that once CMS gives outpatient total joints the green light, other insurers and payers will happily add Medicare Advantage product lines to existing bundled payment arrangements.

Says Mr. Uba, "If you haven't done so already, now's the time to get your outpatient total joint program off the ground."

— Daniel Cook

Future payoffs
More commercial payers are becoming interested in bundled payments, because they often pay less than they would under the fee-for-service model and offload the financial risk to the patient care team. We'll soon have a bundled payment with every commercial payer we do business with. In fact, they're now reaching out to us to set up bundles.

Success with bundled payments demands a standardized care plan. That way everyone is on the same page and patients are cared for the same way in pre-op, intraoperatively, in recovery and after discharge. The standardized approach reduces the variability that increases surgical risk, which jeopardizes the maximum benefits of the bundle.

At the end of the day, the same surgeons are performing the same procedures with the same implants at the same facilities. So why do patients achieve better outcomes under the bundled payment system? Because we're invested in doing a better job of caring for them, all while saving a significant amount of money. OSM