46
CODING
&
BILLING
19 Things to Know About Orthopedic Bundled Payments
By Anuja Vaidya
H
ere are 19 more things to know about
bundled payments for the second half
of 2016.
Regulatory updates
1. Late last year, CMS finalized the Compre-
hensive Care for Joint Replacement model,
under which acute-care hospitals in certain
selected geographic locations will receive ret-
rospective bundled payments for episodes of
care for lower extremity joint replacement or
reattachment of a lower extremity. e CJR
model went into effect on April 1, 2016. e
model is required for the 794 hospitals located
in 67 metropolitan statistical areas throughout
the country.
1
2. An Avalere analysis detailed the average
cost per CJR episode by care setting:
• Inpatient hospital stay: $13,193
• Skilled nursing facility: $5,034
• Inpatient rehabilitation facility: $1,568
• Home health agency: $2,123
• Physician: $1,675
• Hospital readmissions: $1,155
• Outpatient: $604
• Durable medical equipment: $122
3. e total Medicare payment in CJR per
episode will be $25,565 with 39 percent tied
to post-discharge care, according to the same
Avalere analysis.
4. CMS recently released the first data feed of
the Comprehensive Care for Joint Replacement
Model, which reflected updates and correc-
tions to the previously released baseline files.
e data feed includes episodes beginning in
April, May and June. e new format includes
a wage adjustment and a wage standard. In a
Becker's Spine Review article, Kelly Price, vice
president and chief of healthcare data analytics
at Rensselaer, N.Y.-based DataGen, said hospi-
tals should not use this initial data feed to mea-
sure financial performance.
5. Some organizations are concerned about
potential downsides of the CJR model. On
Sept. 7, the American Academy of Orthopae-
dic Surgeons submitted a four-page letter to
the House Budget Committee hearing on the
Center for Medicare & Medicaid Innovation.
In the letter, AAOS raised concerns about how
the new Medicare bundled payment model
for joint replacement surgery would impact
orthopedic payments. e AAOS is also con-
cerned that the model imposes monetary pen-
alties on physicians performing joint replace-
ment surgeries on disadvantaged patients
since postoperative care is more intensive for
these patients.
2
6. In April, CMS extended Bundled Payments
for Care Improvement participation option
deadline. Participants can now extend partici-
pation in Models 2, 3 and 4 through Sept. 30,
2018. e initiative has 1,522 participants.
Hospital-employer bundled
payment partnerships
7. Companies are beginning to partner
with healthcare facilities to initiate bundled
payment programs for their employees.
In June, Cleveland-based University Hos-
pitals agreed to provide General Electric
employees with joint replacement care as
part of the company's National Hip and Knee
Replacement Centers of Excellence Program,
which offers a bundled payment model.
8. Similarly in April, Chicago-based Rush
Health signed a direct employer contract to
provide orthopedic and spine surgeries to
United Airlines' employees. Employees who
receive surgery at Rush Health facilities,
under the partnership, are not responsible for
co-payment and coinsurance costs.
Clinical/financial research on
bundled payments
9. A study published in the International
Journal of Spine Surgery examined bundled
payments and how they could affect resource
utilization during spine surgery. ere were 43
surgeons who completed the survey. In every
scenario, there were surgeons who reported
they would change at least one aspect of their
practice with bundled payments — with 24
percent to 49 percent of the surgeons reporting
change for each scenario. Also, neuromonitor-
ing would decrease in all scenarios by an aver-
age of 21 percent.
3
10. At the Bundled Payment Summit in June,
Coleen Kivlahan, MD, of the University of
California San Francisco, noted alternate
payment models do not recognize the
differences between various joint replacement
procedures. ere are two Diagnosis Related
Group, or DRG, codes for lower extremity
OrthoCarolina was able to lower costs by 10
percent to 30 percent by creating a physician-
owned bundled payment.
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