Camille Van Vurst, RN, MBA, vice president of accountable care strategic advisory services at TriZetto Group, and Thomas Lundquist, MD, vice president of performance measures at BlueCross BlueShield of Tennessee, discuss the bundled payment program that was recently announced for joint replacements and arthroscopy. Ms. Van Vurst and Dr. Lundquist have been working with physician representatives from Tennessee Orthopaedic Alliance, Vanderbilt Medical Group, Knoxville Orthopaedic Clinic and Campbell Clinic to launch the program. Q: How was the bundled payment structure formed?
Camille Van Vurst: We have a very collaborative relationship with BCBS of Tennessee and wanted a strategic partner to work with them to introduce the payment bundling program and they would assist us with further development of the Payment Bundling Application to standardize it for the industry.
Healthcare practice is different regionally, so it was important for BCBST to gain the experience of the payment bundles in different locations. BCBST selected groups were selected from Nashville, Memphis and Knoxville. We met with the providers and discussed the program and the role of the surgeon, hospital and payor. From the very beginning, the surgeons were involved in decision making about the program. We have partnered with BCBST, and also functioned as the facilitator at weekly meetings with providers. We had representation from each surgical group present at the meetings. The surgeons made time for weekly meetings, which showed the importance of the project to them. It has been exciting to see physicians so engaged. They had a seat at the table, equal voice and opportunity to make a decision that would make a difference in this healthcare model.
Dr. Thomas Lundquist: Physician involvement and leadership is absolutely critical to the success of bundled payments. They have to engage in and review the data to define the bundle and identify best practices that, in many cases, will lead to efficiency. Our approach with Blue Cross has been very collaborative. From day one, we've had Blue Cross and TriZetto representation at the table reviewing data with the physicians, and we allow them and their partners to have a significant role in defining the shape of this initiative.
We're still in the implementation stage, defining the bundles and care plans with the physicians and other ancillary providers working together.
Q: I have heard of bundled payment programs in joint replacement, but it seems like bundled payments for arthroscopy is rarer. How will the program for arthroscopy differ from joint replacements?
CV: Arthroscopy is performed on a more frequent basis than joint replacement, so the volume of member experiences will be significantly increased. We want to refine the payment bundling application and continue with process improvements so the experience is seamless to the members and providers.
Q: What benefits are there for the surgeons to participate in the bundled payments?
TL: The bundled payments get the physicians thinking more broadly about their own fees to the overall management of their care prior to, or up to, 90 days for total hip and total knee replacement. They realize a couple of things: their fees are relatively small compared to the total cost of care for the patient and they can impact the cost of care significantly. There is tremendous variation in the care plans for patients and all of it can't be best practice.
They start having conversations about what is really the best care for patients and thinking about the overall cost of care. We've defined the bundle and what should be included in the overall cost, from that we've increased incentives for them to maintain and improve quality.
Q: How does the bundled payment program and incentives work?
CV: The payment bundle reimbursement is tied to performance as well as quality and efficiency measures related to clinical outcomes of the specific condition. The member is also being given a voice to share their experience. Today we hear about different reimbursement models primarily consisting of a global payment for the procedure and an incentive payment tied directly to quality and clinical outcomes.
Q How do you decide the level of payment given to each party based on the global fee for an episode of care?
CV: The level of payment to each provider for an episode is decided upon by the providers. The payors aren't involved in the decision or distribution of the funds.
Q: Were there any surprises you encountered throughout this process?
TL: We anticipated that this would be a lengthy implementation process, but the duration of time continues to stretch. This is a monumental shift in how physicians do their month-to-month, day-to-day practice; it takes a lot of collaboration and management. The second thing that was surprising was how big of an undertaking it has been to update our systems. Those who are inside of insurance understand how complex claims processing and management of risk is; the shift was a complex undertaking and it has exceeded expectations in difficulty.
That said, we are making great strides in putting everything we need in place. Our partnership has reflected well with providers and earned their trust going forward.
CV: The legal aspect of the project took longer than expected. The non-disclosure agreements of data among all parties took time as well as the development of the surgeon and hospital partnerships.
Q: Are there any challenges you are anticipating going forward?
CV: I think one of the areas we could have challenges on an industry level is our benefit structure. The reimbursement models include incentives for providers for the desired clinical outcomes. Achieving the clinical outcomes may be dependent upon the available services for a member. Physical therapy is a simple example. If we're providing bundled services for a joint replacement, and the member doesn't have the number of physical therapy visits needed to reach the desired outcome, the provider may not receive an incentive payment and the member will not have reached the desired functional level post operatively.
TL: There are a lot of systems configurations Blue Cross Blue Shield has to do. The payment mechanisms that have been in place and that drive our systems are radically different than bundled payments. We have to put a lot in place while maintaining the pay for service engine. Together we are pushing each other toward building the systems for patients, not only for the pilot, but also creating a scalable system for orthopedics so we can add other specialties quickly and methodically in 2013 and beyond.
Q: What are the goals of the bundle payment program?
TL: We want to improve upon quality and clinical outcomes, the patient experience, improved care coordination and decrease the cost of care.
Q: Where do you see the bundled payment program heading in the future?
CV: I think the basic foundation is in place for payment bundles. The expansion to additional specialties and providers may facilitate a change in the focus of the payment bundles such as the setting of care, professional level of the provider needed or selection of medications and devices.
Payment bundles, patient centered medical homes and value based benefits are the beginning for us in different provider reimbursement models and the opportunity to improve the quality of care.
TL: I think one of the key building blocks will be for specialty care to be involved in our system going forward. We also have applications for primary care, diabetic care for a year or longstanding chronic care. When you have physicians engaged for multiple specialties, you have the foundation for accountable care organizations for specialty management. We are using the same traditional methodology that allows accountable care to be successful in population health management with a disease-specific focus.
More Articles on Orthopedic Surgeons:
8 Revenue Cycle Concerns for Orthopedic Practices & How to Fix Them
What Impact Does the Economic Downturn Have on Spine Practices? 6 Spine Surgeons Respond
5 Spine Surgeons on Negotiating Out-of-Network Payor Contracts
Camille Van Vurst: We have a very collaborative relationship with BCBS of Tennessee and wanted a strategic partner to work with them to introduce the payment bundling program and they would assist us with further development of the Payment Bundling Application to standardize it for the industry.
Healthcare practice is different regionally, so it was important for BCBST to gain the experience of the payment bundles in different locations. BCBST selected groups were selected from Nashville, Memphis and Knoxville. We met with the providers and discussed the program and the role of the surgeon, hospital and payor. From the very beginning, the surgeons were involved in decision making about the program. We have partnered with BCBST, and also functioned as the facilitator at weekly meetings with providers. We had representation from each surgical group present at the meetings. The surgeons made time for weekly meetings, which showed the importance of the project to them. It has been exciting to see physicians so engaged. They had a seat at the table, equal voice and opportunity to make a decision that would make a difference in this healthcare model.
Dr. Thomas Lundquist: Physician involvement and leadership is absolutely critical to the success of bundled payments. They have to engage in and review the data to define the bundle and identify best practices that, in many cases, will lead to efficiency. Our approach with Blue Cross has been very collaborative. From day one, we've had Blue Cross and TriZetto representation at the table reviewing data with the physicians, and we allow them and their partners to have a significant role in defining the shape of this initiative.
We're still in the implementation stage, defining the bundles and care plans with the physicians and other ancillary providers working together.
Q: I have heard of bundled payment programs in joint replacement, but it seems like bundled payments for arthroscopy is rarer. How will the program for arthroscopy differ from joint replacements?
CV: Arthroscopy is performed on a more frequent basis than joint replacement, so the volume of member experiences will be significantly increased. We want to refine the payment bundling application and continue with process improvements so the experience is seamless to the members and providers.
Q: What benefits are there for the surgeons to participate in the bundled payments?
TL: The bundled payments get the physicians thinking more broadly about their own fees to the overall management of their care prior to, or up to, 90 days for total hip and total knee replacement. They realize a couple of things: their fees are relatively small compared to the total cost of care for the patient and they can impact the cost of care significantly. There is tremendous variation in the care plans for patients and all of it can't be best practice.
They start having conversations about what is really the best care for patients and thinking about the overall cost of care. We've defined the bundle and what should be included in the overall cost, from that we've increased incentives for them to maintain and improve quality.
Q: How does the bundled payment program and incentives work?
CV: The payment bundle reimbursement is tied to performance as well as quality and efficiency measures related to clinical outcomes of the specific condition. The member is also being given a voice to share their experience. Today we hear about different reimbursement models primarily consisting of a global payment for the procedure and an incentive payment tied directly to quality and clinical outcomes.
Q How do you decide the level of payment given to each party based on the global fee for an episode of care?
CV: The level of payment to each provider for an episode is decided upon by the providers. The payors aren't involved in the decision or distribution of the funds.
Q: Were there any surprises you encountered throughout this process?
TL: We anticipated that this would be a lengthy implementation process, but the duration of time continues to stretch. This is a monumental shift in how physicians do their month-to-month, day-to-day practice; it takes a lot of collaboration and management. The second thing that was surprising was how big of an undertaking it has been to update our systems. Those who are inside of insurance understand how complex claims processing and management of risk is; the shift was a complex undertaking and it has exceeded expectations in difficulty.
That said, we are making great strides in putting everything we need in place. Our partnership has reflected well with providers and earned their trust going forward.
CV: The legal aspect of the project took longer than expected. The non-disclosure agreements of data among all parties took time as well as the development of the surgeon and hospital partnerships.
Q: Are there any challenges you are anticipating going forward?
CV: I think one of the areas we could have challenges on an industry level is our benefit structure. The reimbursement models include incentives for providers for the desired clinical outcomes. Achieving the clinical outcomes may be dependent upon the available services for a member. Physical therapy is a simple example. If we're providing bundled services for a joint replacement, and the member doesn't have the number of physical therapy visits needed to reach the desired outcome, the provider may not receive an incentive payment and the member will not have reached the desired functional level post operatively.
TL: There are a lot of systems configurations Blue Cross Blue Shield has to do. The payment mechanisms that have been in place and that drive our systems are radically different than bundled payments. We have to put a lot in place while maintaining the pay for service engine. Together we are pushing each other toward building the systems for patients, not only for the pilot, but also creating a scalable system for orthopedics so we can add other specialties quickly and methodically in 2013 and beyond.
Q: What are the goals of the bundle payment program?
TL: We want to improve upon quality and clinical outcomes, the patient experience, improved care coordination and decrease the cost of care.
Q: Where do you see the bundled payment program heading in the future?
CV: I think the basic foundation is in place for payment bundles. The expansion to additional specialties and providers may facilitate a change in the focus of the payment bundles such as the setting of care, professional level of the provider needed or selection of medications and devices.
Payment bundles, patient centered medical homes and value based benefits are the beginning for us in different provider reimbursement models and the opportunity to improve the quality of care.
TL: I think one of the key building blocks will be for specialty care to be involved in our system going forward. We also have applications for primary care, diabetic care for a year or longstanding chronic care. When you have physicians engaged for multiple specialties, you have the foundation for accountable care organizations for specialty management. We are using the same traditional methodology that allows accountable care to be successful in population health management with a disease-specific focus.
More Articles on Orthopedic Surgeons:
8 Revenue Cycle Concerns for Orthopedic Practices & How to Fix Them
What Impact Does the Economic Downturn Have on Spine Practices? 6 Spine Surgeons Respond
5 Spine Surgeons on Negotiating Out-of-Network Payor Contracts