Shifting to short stay for total joint arthroplasty — Dr. Ken Cherry, Smith & Nephew discuss bundled payments

Megan Wood -  

The evolving healthcare landscape allows surgeons to perform more total joint procedures in the outpatient setting. With this shift, medical providers must be prepared to handle the transition while maintaining organizational efficiency, quality, supply chain delivery and implant acquisition.

In a webinar titled, "Total Joints in an ASC: Protocols for Success," Ken Cherry, MD, co-founder of University Orthopedics Center in State College, Pa., and co-owner of Advanced Center for Surgery in Altoona, Pa., and Scott Reid, senior vice president of the Global Knee Franchise Smith & Nephew, discussed the changing payment trends for total joint replacements.


Healthcare is shifting away from fee-for-service and toward value-based payments, with programs targeted at incentivizing improved care and reducing readmissions.


The Affordable Care Act added another 15 million covered Americans, and its payment reforms bolstered the transition from volume to value. "Aside from just expansion of more people getting coverage, you have a great many programs geared toward patient safety and improving quality," said Mr. Reid.  


The Bundled Payments for Care Improvement program is a voluntary CMS program intended to decrease costs and improve quality. This model involves a patient paying for a coordinated care treatment versus paying separate bills to various medical providers.


"You know in advance what's going to be paid," explained Mr. Reid. Under the BPCI program, medical providers select participation among 48 different episodes. Therefore, medical providers can choose to participate in the system with conditions and timeframes that present feasible improvement. Under the bundled model, the costs are accrued and then compared against the bundle's target price. Thus, if the costs prove more than the target, the CMS receives payment. But if the costs come in less than the target, the savings are shared.


Under the mandatory Comprehensive Care for Joint Replacement program, CMS hopes to decrease costs and improve quality of care. This model involves mostly inpatient total knee arthroplasty and total hip arthroplasty, with an episode lasting 90 days post-discharge. The costs are reconciled annually. CJR will take effect on April 1, 2016 and involve 800 hospitals.


Participating hospitals are at-risk for total cost of care, including expensive postsurgical rehabilitation. Medicare won't cover total TJA in the hospital outpatient department or ASC setting, but some private payers cover the costs in ASCs.


Physicians and hospitals should expect the increasing intertwinement of payments and quality outcomes. The industry will also see more risk-sharing and episode of care assurance programs. Mr. Reid also predicts a higher volume of orthopedic procedures in the outpatient setting, as well as the use of protocols and implants that result in less rehabilitation.


Moving to the outpatient setting
Dr. Cherry began performing outpatient surgeries in 2013, and reported outstanding outcomes. In 2013, about 2 percent of TJA were performed in the outpatient setting, but the number is poised to increase substantially in the coming years.


"There's a great deal of change and with change comes anxiety," said Dr. Cherry. "But for me, change brings opportunity."


The key factors driving outpatient procedures include:


1. Retail consumer: The average patient is younger and more informed. "They are looking for a specialized, boutique program and want quicker rehabilitation," said Dr. Cherry. In the coming years, consumer-directed health plans will increase, incenting consumers with favorable deductibles for selecting high quality and low-cost tiers of providers.


2. Payers: Within the pay-for-value model, surgeons will be incented by additional reimbursements and insurers will incent patients to the high value providers with $0 deductibles and $0 copays.


3. Technology: Dr. Cherry stated technological advancements like the JOURNEY II BCS, VISIONAIRE and VERILAST TECHNOLOGY allow for the success of these outpatient procedures. "Technology is also driving this trend toward more rapid-recovery surgery," he said.


4. System of CARE improvements: There are penalties for slacking health systems. The Hospital Acquired Conditions Reduction Program, Hospital Value-Based Purchasing Program and Hospital Readmission Reduction Program carry out these penalizations.


5. Physician ownership in ASCs: Accountability, convenience and additional income results in improved care for patients. "There is financial incentive and lifestyle incentive," said Dr. Cherry. He noted the BPCI model aligns with these three pillars.


Some barriers to success exist, however. "Insurance companies tend to follow the government and we know the government doesn't do anything quickly," said Dr. Cherry. "The biggest barrier is the home health agency…The readmissions will kill you in the bundled system."


The shift of total joint procedures to the outpatient setting requires the consideration of patient selection, patient education, surgical technique, multimodal pain management, rehabilitation, home nursing agency and implants. The patients need to have a support network at home that can help during recovery, but also a strong network of physicians who understand the protocols.


"You want to have universal protocols. You can't have physicians involved in this if they want to do their own thing," said Dr. Cherry. "Get physicians to buy into this and leave their egos at the door."


Listen to the webinar recording here and view the webinar slides here.


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