Pioneering CMS Bundled Payments for Joint Replacement: Q&A With David Wold of Illinois Bone & Joint Institute

Practice Management

Illinois Bone & Joint Institute, with locations in the Chicagoland area, announced it will participate in the Centers for Medicare & Medicaid Bundled Payments for Care Improvement program. IBJI is the only independent physician group practice in the state, and one of only a few in the country, participating in the program. The practice will participate in Model 3 and plans to take steps improving care management for orthopedic patients. "We are excited to be selected to participate in Medicare's bundled payment program for joint replacement because we see an opportunity to improve care and improve service, which will ultimately lower the cost of care," says David J. Wold, COO of IBJI. "It's a win-win situation. We believe that when we are successful with the Medicare patients that this model will be very attractive to traditional payors as well."

Mr. Wold discusses the potential risks and rewards of bundled payments and where alternative payment models are headed in the future.

Q: What are your goals with the bundled payment program?

David Wold:
Leading up to our decision to participate, we looked at what Medicare pays relative to joint replacement care. We found it really interesting that the cost is relatively similar for hospitals and physician fees, but where we saw a tremendous opportunity to lower costs was in managing the continuum of care. There are excessive dollars spent after the surgery is performed and we think we'll be able to improve those services and lower overall costs.

Q: How do you plan to impact the post-surgical care costs? Where is the biggest opportunity for improvement there?

Historically, after physicians operate they see the patient for a follow up visit. At that point, the patient is really on their own and we've found that a lot of patients, as a matter of convenience, will go from three nights in a hospital to the skilled nursing home for 20 days which just happens to be the length of time Medicare pays for 100 percent of the costs without patient copays. We believe that providing better education and care coordination after surgery, we will be able to reduce the number of days patients stay there.

We also believe we'll reduce readmissions to the hospital. That is where there is a huge opportunity for savings. I think because of the need to follow patients through the process, it will become more personalized and enhance the patient experience.

Q: How will daily practice change for the surgeons? What is their level of involvement with the continuum of care?

We have appointed one of our joint replacement surgeons to serve as medical director and we are also looking to find an internist to help us manage this at the skilled nursing home and care coordinator to sit down with the patient before surgery. They will go through the whole experience with the patient and discuss our recovery expectations. We'll also work with the patients on their rehabilitation with our specialists. From our experience, having patients go to the IBJI facility for rehabilitation after they leave the nursing home and receive therapy from joint specialists who are in direct contact with the surgeons will enhance service. The bundled payment program won't burden surgeons with more administrative work.

Q: Bundled payments pass risk from payors to providers. How are you handling this extra risk?

We are looking to mitigate some of this risk by partnering with all the key stakeholders who provide post-acute care to patients including SNFs, home health and outpatient rehab. We are working together at enhancing the quality and lowering the cost. As a partner, we can share risk as well as the reward. By getting our strategic partners involved, we can minimize risk and enhance our collective abilities to be successful. Our incentives are aligned with each of these stakeholders which improves quality and lowers cost.

If we are able to help Medicare lower their costs there is an upside to participating in the bundled payments with additional potential savings.

Q: Where do you see bundled payments heading in the future?

In my discussions with third party payors, they are all intrigued with the concept of bundled payments and our plans are to go beyond just joint replacements. We would like to look at all surgical procedures we do and see whether we can replicate the bundled services to make them more attractive for insurance companies. We are fortunate, given our size and geographic penetration, that we have the resources to invest in people and technology to manage data. We can compare IBJI physicians to other physicians employed at the hospital and we estimate our care will cost about a third of the other providers.

We see developing additional programs, including in spine surgery, by looking at overall costs. If there is a big upside there, we can work with interested payors on additional bundled services in the future.

More Articles on Orthopedic Surgeons:

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5 Ways for Spine Practices to Stay on the Cutting Edge

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