FEBRUARY 12, 2019

Welcome to the Bundled Payment Update eNewsletter
Editor: Philip L. Ronning
This issue sponsored by the
National Pay for Performance (PfP) Summit, the National Population Health Colloquium,
and the Collocated National ACO, Bundled Payment, and MACRA Summit.

Mandatory Bundled Payments Cut Spending $800 Per Joint
In the first two years of Medicare's mandatory bundled payments for hip and knee replacements, spending per episode decreased slightly without increased complications, recent research shows. (See Abstract below). Bundled payments are one of the most widespread forms of value-based reimbursement in the country, with both government and commercial programs. The researchers focused on Medicare's Comprehensive Care for Joint Replacement (CJR) program. The mandatory hip and knee episodes of care were launched in 2016. Last year, there were about 465 hospitals in the program. The CJR program helps address the question of whether savings seen in previous evaluations of bundled-payment programs were attributable to the select nature of the hospitals that volunteered. Our findings suggest that the changes observed in voluntary programs may be echoed in mandatory programs," the researchers wrote. (HealthLeaders, January 31, 2019)

Two-Year Evaluation of Mandatory Bundled Payments for Joint Replacement


In 2016, Medicare implemented Comprehensive Care for Joint Replacement (CJR), a national mandatory bundled-payment model for hip or knee replacement in randomly selected metropolitan statistical areas. Hospitals in such areas receive bonuses or pay penalties based on Medicare spending per hip- or knee-replacement episode (defined as the hospitalization plus 90 days after discharge).

We conducted difference-in-differences analyses using Medicare claims from 2015 through 2017, encompassing the first 2 years of bundled payments in the CJR program. We evaluated hip- or knee-replacement episodes in 75 metropolitan statistical areas randomly assigned to mandatory participation in the CJR program (bundled-payment metropolitan statistical areas, hereafter referred to as "treatment" areas) as compared with those in 121 control areas, before and after implementation of the CJR model. The primary outcomes were institutional spending per hip- or knee-replacement episode (i.e., Medicare payments to institutions, primarily to hospitals and post–acute care facilities), rates of postsurgical complications, and the percentage of "high-risk" patients (i.e., patients for whom there was an elevated risk of spending -- a measure of patient selection). Analyses were adjusted for the hospital and characteristics of the patients and procedures.

From 2015 through 2017, there were 280,161 hip- or knee-replacement procedures in 803 hospitals in treatment areas and 377,278 procedures in 962 hospitals in control areas. After the initiation of the CJR model, there were greater decreases in institutional spending per joint-replacement episode in treatment areas than in control areas (differential change [i.e., the between-group difference in the change from the period before the CJR model], -$812, or a -3.1% differential decrease relative to the treatment-group baseline; P<0.001). The differential reduction was driven largely by a 5.9% relative decrease in the percentage of episodes in which patients were discharged to post–acute care facilities. The CJR program did not have a significant differential effect on the composite rate of complications (P=0.67) or on the percentage of joint-replacement procedures performed in high-risk patients (P=0.81).

In the first 2 years of the CJR program, there was a modest reduction in spending per hip- or knee-replacement episode, without an increase in rates of complications. (Funded by the Commonwealth Fund and the National Institute on Aging of the National Institutes of Health.)

(New England Journal of Medicine, January 17, 2019)

Benefits of Bundled Payments Turn on Whether They Are Voluntary or Mandatory: GAO
CMS suspects Medicare could save money by adopting episode-based payment models. But according to a new report by the Government Accountability Office, the outcome is highly dependent on the specific structure of those models. In particular, the results can change massively depending on whether the models were voluntary. GAO found (PDF) that mandatory bundles would give the Centers for Medicare & Medicaid Services more consistent results, because practices tend to only participate in the voluntary models when they know they can come out ahead. As a result, voluntary models tend to advantage physicians more than Medicare. "In general, stakeholders reported that voluntary models largely benefit providers. For example, these models tend to have more generous terms and providers can choose to participate in only those models where they are likely to be successful," GAO said. "On the other hand, mandatory models are more likely to give CMS generalizable evaluation results." (FierceHealthcare, January 24, 2019)

New Blockchain Solution Automates Bundled Payments: 3 Details
HSBlox has launched its CuraBlox solution, which leverages blockchain technology to improve bundled-payments. Here are three details:

  1. CuraBlox is designed to enable healthcare organizations to receive bundled payments from contracted insurers or employers while also orchestrating episode workflows, including fund movements and data to and from post-acute care team providers.
  2. HSBlox created the solution to offer integrated workflow, smart contract automation and real-time data delivery to bring transparency, coordination and scaling.
  3. Using the blockchain technology, episodes are initiated and authorized in real time and care team notifications are broadcast on a permissioned basis.

(Becker's Healthcare IT & CIO Report, February 6, 2019)

Rob Mechanic: ACO Savings Look Good Compared with Other Payment Models
Compared with other payment models, like bundled payments or the Comprehensive Primary Care Program, accountable care organizations (ACOs) have done a better job of saving money, said Rob Mechanic, MBA, senior fellow at the Heller School of Social Policy and Management at Brandeis University and executive director of the Institute for Accountable Care.

(American Journal of Managed Care, February 6, 2019)

Outpatient Total Joint 90-Day Bundled Payment Program Hits 300+ Cases: 4 Qs with Dr. Steven Lucey
Last year, surgeons at the center performed 250 total joint procedures, and since launching its outpatient commercial 90-day prospective bundled payments in 2017, the group has completed more than 300 procedures. The group first contracted with Blue Cross Blue Shield of North Carolina and later inked deals with Aetna and Cigna, as well as a regional payer. The physicians launched a consulting business, Valere Bundled Solutions, to focus on building the relationships with executives in charge of value-based initiatives. The group will host a summit in Greensboro in March that hopes to launch bundled agreements in the future. Below Steve Lucey, MD, discusses how his group developed bundled payments, lessons learned and where he sees these relationships headed in the future. (Becker's ASC Review, February 1. 2019)

Kroger To Add New Heart Surgery Benefit with Cleveland Clinic through Anthem Blue Cross and Blue Shield
Cleveland Clinic cardiac surgery expertise is now accessible at little or no cost to eligible Kroger Co. associates and dependents on the company-sponsored health care plan through the Cleveland Clinic Cardiac Concierge Program in partnership with Anthem Blue Cross and Blue Shield in Ohio (Anthem) and its affiliated health plans. The program provides access to complex cardiac surgery at the Cleveland Clinic Heart & Vascular Institute. For 24 consecutive years, U.S. News & World Report has ranked Cleveland Clinic's heart program No. 1 in the nation for cardiovascular care. "Access to high-quality healthcare has an enormous impact on one's health and wellbeing," said Dr. Lars Svensson, M.D., Ph.D., chairman of Cleveland Clinic's Sydell and Arnold Miller Heart & Vascular Institute. "We are proud to collaborate with Anthem and deliver our top-ranked heart surgery expertise to the employees and beneficiaries of Kroger, no matter where they live." "We truly care about our associates' overall well-being, and we're excited to partner with Cleveland Clinic to offer a personalized, first-class experience at the nation's leading cardiac center," said Theresa Monti, Kroger's vice president of total rewards. "We know health care can be complicated and our goal is to make the process easier. By establishing this partnership, we can provide the best care for our associates at affordable prices when they're making meaningful decisions about their health." (NewsRoom, February 5, 2019)

Health Catalyst: Bundled Payments

Bundled Payment Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as ACOs, patient safety, pay for performance, comparative effectiveness, readmissions, and Medicaid. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

Panel I: Private Sector Value-based Payment Initiatives

Julian Harris
President, CareAllies, a CIGNA Company

Brigitte Nettesheim
President, Joint Venture Market Operations, Aetna

Hoangmai H. Pham
Vice President, Provider Alignment Solutions, Anthem

Amy Smith
Manager, Episodes of Care, Horizon Blue Cross Blue Shield of New Jersey

Jeff Micklos
Executive Director, Health Care Transformation Task Force