Bundled Payments for Care Improvement Initiative: The Next Evolution of Payment Formulations: AAHKS Bundled Payment Task Force

doi:10.1016/j.arth.2013.07.012

The Journal of Arthroplasty

Volume 28, Issue 8, Supplement, September 2013, Pages 157-165

https://doi.org/10.1016/j.arth.2013.07.012 Get rights and content

Abstract

The Patient Protection and Affordable Care Act contains a number of provision for improving the delivery of healthcare in the United States, among the most impactful of which may be the call for modifications in the packaging of and payment for care that is bundled into episodes. The move away from fee for service payment models to payment for coordinated care delivered as comprehensive episodes is heralded as having great potential to enhance quality and reduce cost, thereby increasing the value of the care delivered. This effort builds on the prior experience around delivering care for arthroplasty under the Acute Care Episode Project and offers extensions and opportunities to modify the experience moving forward. Total hip and knee arthroplasties are viewed as ideal treatments to test the effectiveness of this payment model. Providers must learn the nuances of these modified care delivery concepts and evaluate whether their environment is conducive to success in this arena. This fundamental shift in payment for care offers both considerable risk and tremendous opportunity for physicians. Acquiring an understanding of the recent experience and the determinants of future success will best position orthopaedic surgeons to thrive in this new environment. Although this will remain a dynamic exercise for some time, early experience may enhance the chances for long term success, and physicians can rightfully lead the care delivery redesign process.

Section snippets

Introduction: History and Overview of Bundled Payments

The current rate of healthcare spending in the United States is unsustainable. Various stakeholders such as the Centers for Medicare and Medicaid Services (CMS), government policy makers, hospitals, industry thought leaders, payers, and physician groups have been examining options to shift away from the current fee-for-service (FFS) model. This model encourages excessive delivery of services and results in an increase of both utilization of services and costs to the healthcare system. One

The Acute Care Episode (ACE) CMS Demonstration Project Experiences in Albuquerque (One Year) and Tulsa (Two Years) and San Antonio

With the purpose of improving quality and care coordination and reducing and controlling costs, CMS organized the Acute Care Episode (ACE) Demonstration Project focused on high volume and high cost THA and TKA in Medicare Fee-For-Service (FFS) patients. Patients in Medicare Senior Advantage Plans were not included in the ACE project. The project involved only four states: Colorado, New Mexico, Oklahoma, and Texas. Only one hospital system could be chosen per metropolitan service area (MSA). Two

Bundling: A Systematic Approach

A few essential elements are necessary to start a successful bundled payment program.

Redefining a Product with Enhanced Value: Perhaps one of the easiest ways to consider the implications and potential benefits of switching from a fee for service model of payment to a bundled payment model is to think about it from the perspective of a consumer of health care, rather than as a provider. Payers (insurers, employers, and patients themselves with increasing personal financial responsibility)

Gain-Sharing Within a Bundled Payment Environment

Definition: Gain-sharing is one mechanism that can be used to assist in delivering collaboration among physicians and hospitals [10]. It is a process or program that aligns the incentives of hospitals and physicians to improve the fiscal performance of the hospital and reward physicians for their effort. The Department of Health and Services Office of Inspector General defines gain-sharing as “an arrangement in which a hospital gives physicians a percentage share of any reduction in the

Summary

Given the changing political and economic climate in the United States, health care reform will continue the push toward the value equation emphasizing quality improvement and cost control.

It is unclear what form this change in health care governance will assume, but change is inevitable due to the budgetary limits that will be encountered over the next few decades. Initiatives that enable physicians, health care systems and payers to control costs, improve quality and efficiency, and increase

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: The Conflict of Interest statement associated with this article can be found at http://dx.doi.org/10.1016/j.arth.2013.07.012.

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Bundled Payments for Care Improvement Initiative: The Next Evolution of Payment Formulations: AAHKS Bundled Payment Task Force

Abstract

Section snippets

Introduction: History and Overview of Bundled Payments

The Acute Care Episode (ACE) CMS Demonstration Project Experiences in Albuquerque (One Year) and Tulsa (Two Years) and San Antonio

Bundling: A Systematic Approach

Gain-Sharing Within a Bundled Payment Environment

Summary

Economic incentives to promote innovation in healthcare delivery

Corr

Building a bridge from fragmentation to accountability—the Prometheus payment model

N Engl J Med

Performance-based bundled payments: potential benefits and burdens

Minn Med

Medicare's bundled payment pilot for acute and postacute care: analysis and recommendations on where to begin

Health Aff (Millwood).