Becker's Spine Review

10 SPINE SURGEONS Bundled payments in spine: 12 key thoughts for 2020 By Alan Condon A s rising healthcare costs continue to burden patients and providers, pay- ment models like bundled payments are gaining traction at healthcare facilities across the country. Value-based care is anticipated to grow in popularity over the next decade as the indus- try looks for alternatives to the fee-for-service reimbursement model. Ultimately, healthcare organizations are developing bundled pay- ment initiatives to financially incentivize pro- viders to improve outcomes, reduce length of stay and advocate for a multidisciplinary approach to care. A transformation is underway, but the jury is still out on the future impact of bundled pay- ments in spine due to the wide variation in surgeries, approaches and levels that may be operated on in any given diagnosis. Here are 12 key thoughts and trends on bundled payments in spine and what to expect in 2020: 1. David Janiec, director of payment strategy at Philadelphia-based Rothman Institute, said the spine industry is in the middle of a learn- ing curve. Mr. Janiec believes a well-rounded value-based model can be established within the next eight to 10 years that supports proper patient care, but physicians should be consult- ed on how to achieve this, not administrators. Early bundle developments have highlighted the expansion of evidenced-based medicine, a better understanding of costs, improve- ments in care coordination and higher quality patient care. For these reasons, it's imperative "not only to participate in these value-based models for educational and financial benefit … but also to look with a critical eye to ensure a sustainable final model evolves." 2. UnitedHealthcare expanded BPCI Bundled Payments to include Medicare Advantage beneficiaries this year. e UnitedHealthcare Care Bundles program came into effect Jan. 1, 2020, offering bundled payments for non- cervical spinal fusions. e payer has about 3 million people enrolled in Medicare Advan- tage plans that have providers participating in value-based models and aims to have $75 billion in reimbursement tied to value-based care annually by the end of 2020. 3. Following the success of its 2016 total joint replacement bundle — which includes 78 prac- tices in 21 states — Humana began offering Humana Medicare Advantage members access to bundled payments for spinal fusion surgery last year. e payer initiated the Spinal Fusion Episode-Based Model at four practices, which has grown to nine practices across seven states, a Humana executive told Becker's. e bundle increases reimbursement for physicians with improved outcomes and cost for spine sur- gery episodes of care, which is determined by readmission rates, complications and average risk-adjusted episodic cost-of-care. 4. Domagoj Coric, MD, chief of the depart- ment of neurosurgery at Carolinas Medical Center and spine division chief of Atrium Musculoskeletal Institute, both of Charlotte, N.C., told Becker's bundled payments are here to stay, but spine procedures will be more difficult to bundle than orthopedic proce- dures such as total joint replacement. "More straightforward spine procedures … such as lumbar discectomy, anterior cervical discec- tomy and fusion or cervical artificial disc replacement lend themselves to bundling. Conversely, more complex procedures such as deformity correction surgery will be diffi- cult — if not impossible — to bundle." 5. Current value-based programs in spine such as the Bundled Payments for Care Im- provement initiative depend on diagnosis re- lated groups to determine payments, accord- ing to orthopedic researcher Azeem Malik of the Ohio State University Wexner Medical Center in Columbus. One primary concern for spine surgeons is that DRGs may not be enough to deal with the wide variation in spine procedures, as outlined above. In an article published in e Spine Journal, Mr. Malik's study calculated 90-day costs for all lumbar fusions to be $31,716 ± $18,124, with individual 90-day payments being $54,607 ± $30,643 in DRG-459 — spinal fu- sion except cervical with major comorbidity or complication — and $30,338 ± $16,074 in DRG-460 — spinal fusion except cervical without major comorbidity or complication. He and his co-authors called on policymak- ers to account for individual patient, state and procedure variation seen within DRGs to stop the formation of financial disincentives in caring for sicker patients and performing more complex fusions. 6. In a 2019 study on bundled payments for lumbar spinal fusions, Wesley Bronson, MD, of New York City-based NYU Langone Med- ical Center-Hospital for Joint Diseases, found that increased case complexity was responsi- ble for rising costs relative to the negotiated baseline target price. Researchers analyzed two-year data of one institution participating in the BPCI program and determined that the value-based model "may discourage advancement in spine sur- gery due to the financial penalty associated with novel techniques and technologies." Four study details: • e BPCI program enrolled 350 patients with the baseline group having 518. • Compared with the baseline group, length of stay decreased, readmission rate was unchanged and discharges with domestic aid increased. • Use of interbody fusions increased from 2 percent to 16 percent and complex spine cases rose from 23 percent to 45 percent. • Researchers, however, were ultimately unable to achieve an episode-based cost savings. 7. e proposed transition from fee-for-ser- vice to bundled payments may drive further private equity interest in spine surgery, ac- cording Matthew Galetta, an orthopedic spine research fellow at Rothman Institute in Phil- adelphia. Advances in technology and mini- mally invasive surgery have made it possible for several spine procedures to be performed outpatient at a reduced cost. Mr. Galetta de- scribes an ideal private equity target as stable with recurring cash flow to enable liquidity to pay off debt and interest payments. "Arguably the most attractive aspect of ortho- pedic practices for private equity firms is the opportunity of less invasive ancillary services, such as medical imaging, physical therapy, and sports medicine," Mr. Galetta said. "Not only [do they] provide practices with an in-house complement to surgery for bundled payment reimbursements purposes, but also offer an entirely new business opportunity that cir- cumvents bundled payments altogether. 8. In a 2017 study published in e Spine Jour- nal, Susan Odum, PhD, senior research scientist at OrthoCarolina Research Institute in Char- lotte, N.C., set out to determine if there was value in retrospective 90-day bundled payment

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