Reimbursement trends for hip and knee replacement
At the Centers for Advanced Orthopaedics, Gardner says it is contracted with Medicare and uses a bundled payment method that has a direct relationship with reimbursement.
“Given that readmissions increase the total cost of care for a 90-day period, this could ultimately impact the organization’s bottom line, depending on what happened and why,” he says. “Also, if the cost of care is too high throughout a set period of time, money may be owed to the government since it then exceeds the target price in the bundled agreement.”
However, when it comes to commercial insurance, readmission is not yet having an impact on reimbursement. Gardner believes in the future, payment may be dependent on performance and quality of care, where reimbursement is withheld for poor outcomes.
At Blue Cross Blue Shield of Michigan, Tom Leyden, Director II, value partnerships program, said it has developed variable value-based reimbursement (VBR) opportunities for primary care physicians and all specialty types participating in its quality improvement programs.
“For the inaugural program year, we saw 147 orthopaedic surgeons participating in MARCQI receive VBR payments tied to improvements in patients receiving functional assessments and reductions in the percentage of total knee/hip arthroplasty patients sent to ECF/SNFs post-surgery,” he says. “In fact, many of our hospitals are now sending 0% of their patients to SNFs after surgery.”
The second VBR opportunity for orthopaedic surgeons is tied to improvements in overall per member per month medical/surgical cost of care + pharmacy cost; change in cost of care per member per month (PMPM) from the prior year; a single composite score comprised of quality metrics from across many PGIP initiatives; proportion of visits with primary diagnosis of low back pain receiving an imaging study; and adult MRI and CT imaging per 1,000 member years.
“Finally, we have piloted a bundled payment arrangement for non-complicated hip and knee replacement procedures,” Leyden says. “The goal of the pilot program is to address the significant variation in cost and care across hospitals and geographies. We are working with surgeons and healthcare systems to manage the cost and outcome variation of these procedures (including readmissions), and to consider appropriate sites for care.”