Bundled payment model linked with reduced Medicare payments for joint replacement

Mike McCaslin, CPA

This article focuses on documented savings in the cost of major joint replacement of lower extremity (MJRLE) using bundled payment methodologies that focus on the Acute Care Episode (ACE), Comprehensive Care for Joint Replacement Program (CJR) and some information related to the Bundled Payment for Care Improvement (BPCI) program.

Somerset and I have exposure to more than 50 orthopedic groups that are clients or members of The OrthoForum participating in the BPCI program. They are participating through Signature Health Care which is an OrthoForum member that is also a BPCI convener for these groups. The results noted in the article are consistent with results achieved by many of the orthopedic groups with which we work. We believe the results achieved under all the bundled payment programs are substantially, if not completely, driven by the intense management by the orthopedic surgeon and the care management team dedicated to the bundle payment program. Although the article in one paragraph downplays the internal hospital cost reductions and high cost post-acute care (PAC) use “without intensive care coordination investments,” we would argue the opposite is true. Investments in care coordination processes are what drive total program savings. For orthopedic groups and its physicians who have had good hospital relationships, implant costs have likely already been driven down through combined efforts, such as long-standing service line co-management agreements. Where those long-term relationships have not existed, the article accurately notes that savings have been achieved through gain-sharing arrangements executed due to the CJR or BPCI. Again, the important point is that without active physician participation and management of the entire care delivery process, which includes selection of implants incorporating all clinical issues, the savings cannot be achieved.

An often-overlooked element of the care management process is the communication with the patient and the patient’s family about the entire care process. There are challenges for family members in managing a relative’s post-surgical care. Historically, the easy answer for family members was to move the affected family member into a post-acute facility for the longest allowed period under reimbursement policy. This gave the family members a break in terms of the PAC burden the family might otherwise face. The care planning process requires the family meeting upfront and that the care plan communicated is adhered to as part of accepting the patient for surgery. This is not only acceptance by the patient, but the family members as well. While hospitals are an important element of the care delivery, only physicians can manage the care delivery process; and physicians and their care management teams are best at producing the result of the right care by the right provider at the right cost with the right outcome.