Bundled payments present alternative reimbursement scheme for hip and knee arthroplasty: Part 1

Issue: February 2016

In January 2013, the CMS Innovation Center began the Bundled Payment for Care Improvement program enabled through the Patient Protection and Affordable Care Act. The program seeks to improve health care delivery, inclusive of the patient experience, while reducing costs and maintaining outcomes. One of four models proposed has found popularity among institutions offering lower extremity joint arthroplasty where an awardee enters into pre-negotiated payment arrangements that include financial and performance accountability for each clinical episode where a risk and reward calculus must be determined. Heretofore, fee-for-service payments have been issued to each provider independently.

Under the Bundled Payment for Care Improvement (BPCI) payment model, the awardee is responsible for each episode of patient care that covers all service providers. It then becomes essential that not only the medical institution, but also the orthopedic surgeon, other allied health personnel, medical device manufacturers and post-acute care representatives be involved in determination of the resources consumed during the covered episode of care. The upside of this initiative is if the payments from CMS are less than the set target price, there will be a payment to the successful provider. Such funds can then be shared among the involved parties. The early enthusiasm for the BPCI program has spawned the next iteration, the Comprehensive Care for Joint Replacement (CJR) program, with some refinements and some differences. Both programs are key components of the stated CMS policy objective of having more than 50% of payments derived from payment mechanisms other than traditional fee-for-service by 2018.

This first part of a two-part Orthopedics Today Round Table involves four orthopedic surgeons who, along with their institutions, are participating in the BPCI program, with some expecting to engage in the CJR program as well. The questions seek to provide educational insight into the positive, negative and room for improvement aspects of this initiative.

A. Seth Greenwald, DPhil (Oxon)
Moderator

Roundtable Participants

Moderator
A. Seth Greenwald, DPhil (Oxon)
Cleveland

C. Lowry Barnes, MD
Little Rock, Ark.

Mark I. Froimson, MD, MBA
Livonia, Mich.

Richard Iorio, MD
New York City

Stephen B. Murphy, MD
Boston

A. Seth Greenwald, DPhil (Oxon): Under the preferred BPCI model for primary hip and knee reconstruction procedures, the proposed bundle payment is 2% to 3% less than the institution’s historical data for DRG 469 and 470. The awardee also has to choose between 30 days, 60 days or 90 days of post-acute care for these patients. Which did your institution subscribe to and why?

Stephen B. Murphy, MD: We chose 30 days so the project was a little more manageable to start with. We also found more than 85% of the costs, on average, for joint replacement patients are incurred in the first 30 days, so most of the savings opportunity can be captured in that time frame. The duration can be changed quarterly so these decisions are dynamic.

Richard Iorio, MD: NYU Langone Medical Center chose to participate in BCPI model 2 for 90 days. The best opportunity for savings within the bundle was decreasing the cost of post-acute care. Choosing the 90-day option presented the greatest opportunity for cost savings.

Mark I. Froimson, MD, MBA: I have been involved in the BPCI program in two separate organizations. Our team at the Cleveland Clinic launched the program as one of the first of 13 centers to go at risk in 2013. We decided to enter the program in a limited way with primary total hip and knee replacement at one of nine hospitals, with a projected yearly volume of 350 Medicare joint replacements.

As this was our initial foray in to this area, we elected to construct a 30-day post-acute episode. We were willing to increase the discount to 3% in exchange for a reduced period of management and risk. In addition, we anticipated considerable complexity in Medicare’s ability to manage the claims for the full 90 days and our need to validate services that would be included well after a patient was recovered. In addition, from a philosophical perspective, we thought that in the era of rapid recovery, helping our patients view the episode as 30 days rather than 90 days would be important messaging.

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I have now moved to Trinity Health and have launched a larger program that includes not only many orthopedic episodes, but also chronic medical and other surgical episodes. Our total program size is estimated to include more than 25,000 episodes per year. For these episodes, and consistent with other population health strategies, we have elected to manage patients for the 90-days post-acute. This decision was based on the move in the industry toward a standard definition.

C. Lowry Barnes, MD: We chose the 72 hours before until 90 days after because we wanted as much of the period of care as we could obtain. As early participants, this gave us a real opportunity to learn more about the entire continuum of care. It was also consistent with a mandatory retrospective bundle in our state that includes all Arkansas Blue Cross, Qual Choice and Medicaid total joints.

Greenwald: At your institution, who serves on the BPCI awardee team and provides input as to procedural changes resulting in cost savings?

Murphy: Our project is a surgeon-led project that involves only private practices. Leadership is provided by practicing orthopedic surgeons supported by Ortho New England Group and Archway Health, professional teams who are experienced with physician-led bundled payment programs. We provide data analytics and patient-tracking tools to the individual practice groups and work together with the groups on best-practice evolution. Nearly all of the savings opportunities are related to preoperative preparation, disposition and post-acute care management as opposed to in-hospital factors, so that is where we focus. The surgeons who are at risk are naturally driven to improve the care of their patients comprehensively.

Iorio: NYU Langone Medical Center made a commitment to provide the resources from an administrative, information technology and care management perspective to make the BPCI effort successful. Without the support of the institution, accurate data and adequate care management, it would be difficult to successfully implement a BPCI program. Departmental leadership is essential to align the surgeons with the institution to deliver cost-effective high quality care.

Froimson: We have a complex system with a centralized steering team and individual operations teams at each of our hospitals. The actuarial and claims-based analyses are done centrally as are the constructs of what constitutes best practice. The execution and implementation occur locally and are led by a physician/administrator dyad who can understand collectively the medical interventions that need to be made as well as the resources that should be invested.

Barnes: The three total joint surgeons who have been involved and we have had an interdisciplinary team that included advanced practice nurses, care managers, TAV Health representatives, the orthopedic service line director, the chief financial officer and others, depending upon any particular challenges. The meetings are data-driven and physician-led.

Greenwald: Based on team input, what procedural factors have been determined to be non-essential? What process improvements have been implemented to improve care in primary hip and knee reconstruction, and what cost savings have resulted?

Murphy: We have learned from our data analysis that a better surgical technique has a tremendous positive influence on improved outcome and reduced cost. Looking at disposition variation, it is apparent that more than half of patients treated by skilled nursing facility (SNF) disposition could or should have been treated by home disposition. After surgical technique, disposition to home when appropriate, and fewer SNF days when patients are transferred to a SNF are critical drivers of improved outcome and lower cost.

Iorio: Numerous evidence-based protocols were implemented resulting in many changes. Examples were the elimination of autologous blood donation, cell saver and reinfusion drains. We eliminated the use of PCA, urinary catheters, Aquamantys System (Medtronic), postoperative knee radiographs, routine pathology evaluation, transfusion triggers, continious passive motion and wound drains. Positive protocols included the perioperative orthopedic surgical home for patient optimization, short-acting spinal anesthesia, multimodal pain management, hospitalist-based medical care in the hospital, accelerated rehab protocols and extensive care management services.

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Froimson: The most important factor is patient engagement in the care protocol and education of the patient and family regarding key milestones in care. It has been illuminating how much care has been the result of habit and established practice and how many opportunities there are to reduce resource consumption.

There are two separate classes of savings: the cost of care delivery from the provider’s perspective and the reduction in additional billable services that impact the revenue side. Reducing post-acute utilization of skilled nursing days is an example of the latter, with savings to Medicare and accrued savings to the awardee. Saving money on implants or unnecessary lab tests are examples of cost-savings that occur within the inpatient diagnosis related groups and are not measured in the CMS claims, but still reduce cost of care and generate value when implemented.

Barnes: Attendance at preoperative education classes is mandatory. Our data has proven preoperative education decreases complications, readmissions and costs. We have made major changes in anesthesia and postoperative pain control. Our patients now receive general anesthetic rather than regional/epidural. This has decreased postoperative hypotension limiting therapy, as well as decreased urinary retention. Patients receive peri-articular liposomal encapsulated bupivacaine injections for knees, but more traditional injections for hips. We are also big believers in staying connected to our patients after surgery. They sign contracts with us that they will call us first for any problems, and we agree to be available to them 24/7. TAV Health, our partner, manages this process during the day, and we rely on Google Call after hours.

A note from the editors

Look for part 2 of this Round Table discussion in the March issue of Orthopedics Today.

For more information:
C. Lowry Barnes, MD, can be reached at the Department of Orthopaedics, University of Arkansas for Medical Sciences, 4301 W. Marham, Little Rock, AR 72207; email: clbarnes@uams.edu.
Mark I. Froimson, MD, MBA, can be reached at Trinity Health, 20555 Victor Pkwy., Livonia, MI 48152; email: pidgeone@trinity-health.org.
A. Seth Greenwald, DPhil (Oxon), can be reached at reached at Orthopaedic Research Laboratories, 2310 Superior Ave. East, Suite 100, Cleveland, OH 44114; email: seth@orl-inc.com.
Richard Iorio, MD, can be reached at NYU Center For Musculoskeletal Care, 333 East 38th St., 6th Floor, New York, NY 10016; email: richard.iorio@nyumc.org.
Stephen B. Murphy, MD, can be reached at Center for Computer Assisted & Reconstructive Surgery, 125 Parker Hill Ave. Suite 545 Boston, MA 02120; email: stephenbmurphymd@gmail.com.

Disclosures: Barnes reports he is a board or committee member for American Association of Hip and Knee Surgeons, AR Orthopaedic Society, HipKnee Arkansas Foundation and Southern Orthopaedic Association; receives research surpport from ConforMI, Liventa and Pacira; receives other financial or material support from Corin U.S.A.; receives IP royalties from DJO and Zimmer Biomet; is a paid consultant from DJO and Zimmer Biomet and has stock or stock options from Liventa and Responsive Orthopaedics. Froimson is executive vice president and chief clinical officer of Trinity Health. Greenwald reports no relevant financial disclosures. Iorio reports he receives research support from POS Medical & Sports Technologies Ltd., Bioventis; is a paid consultant for DJ Orthopaedics, MCS ActiveCare, Pacira; receives research support from Ferring Pharmaceuticals, Orthofix Inc., Orthosensor, Pacira and Vericel; is a board or committee member for the Hip Society and the Knee Society; and has stock or stock options in Wellbe. Murphy reports he is a board or committee member for International Society for Technology in Arthroplasty, International Society of Computer Assisted Orthopedic Surgery, is a paid consultant for and receives IP royalities from MicroPort Orthopedics Inc., and has stock or stock options in Surgical Planning Associates Inc.