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CODING
&
BILLING
Vermont Moving to Full Value-
Based Care Model in 2017: 5
Things to Know
By Eric Oliver
T
he federal government gave approval to Vermont
Governor Peter Shumlin to implement a fully
value-based care healthcare system, VPR reports.
Here's what you need to know.
1. Physicians in the state will be required to register with
an ACO. OneCare Vermont and the Vermont Care Orga-
nization are two such organizations.
The payments will go through the ACO.
2. The Green Mountain Care Board, which approves hos-
pital budgets and insurance prices, is going to be the
primary regulator for the ACOs.
3. A version of value-based care was "all the rage" in the
1970s, but was phased out as healthcare adapted a free-
market approach.
4. Maryland kept its all-payer system, and has had the
model in place since 1976. According to a 2010 Nation-
al Conference of State Legislators brief: "between 1976
and 2007, Maryland had the second lowest rate of in-
crease in costs per admission in the county."
5. Vermont will be the first state to implement a full val-
ue-based care model.
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joint replacement — one for high-risk patients and another for low-
risk patients. But, when estimating risk, the Bundled Payments for
Care Improvement Act and the Comprehensive Care for Joint Re-
placement rule lumps both groups together, according to Dr. Kivlahan.
Treatment for low-risk patient could cost an average of $25,000. How-
ever, for high-risk patients, the costs could average $40,000 to $50,000
per episode of care.
11. Providers who are early adopters of bundled payments can increase
patient volumes from payers, according to a study published in Spine. Fee-
for-service reimbursement accounts for a majority of revenue, but several
organizations expect 30 percent to 45 percent of their spine volume to be
covered under bundled payments within three years, the study found.
4
12. A bundled payments program for total joint replacements resulted
in improvements in quality of care and patient outcomes while reducing
overall costs, according to a study from NYU Langone Medical Center in
New York. In the first year of the study, researchers identified 721 Medi-
care-eligible patients undergoing total joint replacement. For comparative
purposes, they identified 785 in the third year. e study found that aver-
age hospital length of stay decreased from 3.58 days to 2.96 days from
the first year to the third year. e average cost to CMS of the episode of
care decreased from $34,249 to $27,541 from year one to year three of the
program.
13. A recent article in Health Affairs found that CMS' CJR model for
bundled payments could penalize some hospitals because it doesn't make
risk adjustments for case complexity. According to the article, For each
standard deviation increase in the patient's complexity, the reconciliation
payments were reduced by $827 per episode. If CMS implemented risk ad-
justment, they would increase the reconciliation payments to some hospi-
tals by around $114,184 per year.
Bundled payment
implementation
14. Increasingly, orthopedic centers are offering bundled payments.
In May, Chicago-based Midwest Orthopaedics at Rush became the
first academic practice and among the first orthopedic groups in the
nation to offer patients these kinds of bundled payments. e practice
offers the program for the following five procedures:
• ACL repair: $10,800
• Hip arthroscopy: $13,250
• Knee arthroscopy: $5,000
• Rotator cuff repair: $11,300
• Shoulder arthroscopy: $10,000
15. Charlotte, N.C.-based OrthoCarolina published an article in the New
England Journal of Medicine Catalyst detailing its process for creating a
physician-owned bundled payment. e group was able to lower costs
by 10 percent to 30 percent as well as improve outcomes for hip and knee
replacement surgery.
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16. Two hospital surveys released last month found the majority of
hospitals polled are not ready for CMS' Comprehensive Care for Joint
Replacement reimbursement model. A FORCE-TJR survey found 56
percent of hospital orthopedics programs report being unprepared for
CJR. Avalere Health's survey results indicated 60 percent of the hos-
pitals required to participate in CJR could lose money in the bundled
payment model when downside risk begins in January 2017.
17. Half of all physicians, 78 percent of hospitals and 80 percent of payers
find bundled payments appealing, according to a booz&co infographic on
Stragety+Business. Additionally, more than 80 percent of hospitals with
bundle experience have improved patient engagement, increased align-
ment with physicians and further reduced administrative costs.
Miscellaneous
18. Zimmer Biomet recently launched a suite of clinical services and
technologies that especially targets orthopedic providers who are part
of the CJR program. e suite, Signature Solutions, integrates into the
established Zimmer Biomet consulting platform. e core compo-
nents include interactive patient engagement tools for patient educa-
tion, communication and adherence to protocols as well as a data min-
ing and analysis platform to collect patient-reported outcomes, among
other services.
19. Stryker Performance Solutions, the business unit of Stryker's Re-
constructive Division, partners with hospitals and physician practices
to help improve healthcare quality, patient satisfaction and profitability.
It offers a new digital tool called Episode Performance Manager, which
translates raw claims data from CMS into reports. e reports compare
the performance of hospitals participating in CMS' CJR model.
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References:
1
AAOS Academy News
2
AAOS letter
3
International Journal of Spine Surgery study
4
Spine study
5
New England Journal of Medicine Catalyst article
